Private Wealth Management Trusts in Barbados

Introduction

The law of trusts in Barbados has its foundation in the English Trustee Act 1925, common law, and rules of equity. The general principles relating to trusts are supplemented by the Barbados Trustee Act and the International Trusts Act (“ITA”).

The International Financial Services Act 2002-5 (“IFSA”) also regulates licensees acting as trustees of “offshore trusts” in Barbados and regulates the powers and duties of the licensee as trustee. Barbados has developed a legal infrastructure with accounting expertise to strengthen the proper establishment and administration of trusts.

A Barbados trust provides for distributions at any time during the lifetime and upon death of the settlor. It can provide most of the benefits of a will without requirements of probate and court approval for distribution of assets to beneficiaries. Law dictates that unquestioned legal title vests in the beneficiaries from the property of the trust.

A trust, which takes effect only upon the death of the settlor, must be declared as prescribed by the Succession Act 1981 since it is essentially a will and is therefore subject to probate. Further, the Property Act 1979 requires that for dispositions of real property, the instrument must be in writing.

Any person, resident or non-resident, may settle assets in a Barbados trust. A trust is arguably the most secure of all vehicles available to investors to protect their assets.

Historically, trusts have been utilized by wealthy individuals and families to protect assets from attack by creditors, minimize taxation, and provide for family members in the future without those beneficiaries being able to squander assets. For almost 20 years in Barbados, tax advisers and other professionals have used trusts in effective tax planning and wealth management for high net worth persons and in facilitating commercial transactions.