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NEVIS

 

ESTABLISHMENT OF TRUST


ANALYSIS OF TRUST LAWS
NEVIS INTERNATIONAL EXEMPT TRUST ORDINANCE, 1994

The use of international trusts has rapidly expanded as both corporations and individuals apply this mechanism to fuel and facilitate a wide range of activities. Their use has become increasingly imaginative and prolific and remains an integral element in estate planning and asset protection. In recognition of this trend, and of the contribution that international trusts would make to the international financial services sector, the Nevis International Exempt Trust Ordinance was passed by the Nevis Island Assembly in 1994.
The Ordinance governs the establishment and operation of international trusts and is an amalgamation of the progressive international trust legislation of various jurisdictions combined with innovative provisions to form a totally unique product. When combined with an NBCO, users can create powerful asset protection vehicles.
The Trust Ordinance provides for the creation of charitable, spend-thrift and protective trusts. It also includes special provisions tailored to make Nevis a preferred jurisdiction for the establishment of asset protection trusts (APTs).

CREATION, ESTABLISHMENT AND ADMINISTRATION OF TRUSTS
To qualify as an international trust under the Nevis International Exempt Trust Ordinance, the following criteria must be met:
1) at least one trustee must be either a trust company doing business in Nevis or a company incorporated under the NBCO;
2) the settler and beneficiaries must at all times be non-residents of Nevis; and:
3) the trust property must not include any land situated in Nevis or its sister island, St. Kitts.
Other features of the trust are that the trust assets and income deriving from the corpus of an international trust are exempt from all exchange controls and estate, corporate, gift, income, inheritance, withholding, succession and stamp taxes in Nevis.
Under the Nevis International Exempt Trust Ordinance, the international trust can be created with only one trustee and the Settlor or trustee of the trust may also be named as a beneficiary.

 

 

PROPER LAW
The proper law of the trust is the Law of the jurisdiction expressed by the terms of the trust as proper law, with which the trust at the time it was created had the closest connection; or failing either, the proper law of the international trust shall be the law of Nevis.

DURATION OF TRUSTS
The rule against perpetuities does not apply. A Nevis international trust may continue for one-hundred years from the date of commencement of its existence and forced heirship rules cannot invalidate the trust.

ASSET PROTECTION PROVISIONS
An Important feature of the Ordinance relates to fraudulent dispositions. A creditor seeking to set aside a transfer to an International Trust is required to establish beyond reasonable doubt that the transfer constituted a fraudulent disposition. The Nevis Ordinance expressly states that "a trust settled or established and a disposition to such trust shall not be fraudulent as against a creditor of a Settlor:
(a) If settled, established or the disposition takes place after the expiration of two yeas from the date that such creditor's cause of action accrued; or
(b) Where settled, established or the disposition takes place before the expiration of two years from the date that the creditor's cause of action accrued, and that creditor fails to commence such action before the expiration of one year from the date such settlement, establishment or disposition took place."
Furthermore, every creditor, before bringing any action or proceeding against any trust property shall first post and pay a bond with the court as a security deposit.

THE PROTECTOR
The Ordinance specifically provides for the appointment of a Protector. The role of the Protector is to monitor the major acts of the trustee. The Protector is not a Trustee but rather the "watchdog" of the Trust. This provision gives an added protection feature in that the Protector has a fiduciary duty to the beneficiaries of the trust or to the purpose for which the trust was created. This provides an additional safety mechanism within the framework and workings of the trust.

TAXES AND OTHER EXEMPTIONS
The assets and earnings of a Nevis International Exempt Trust are exempt from all exchange controls and all forms of taxation and stamp duty in Nevis.

REGISTERED OFFICE
Where an offshore company is a trustee of an international trust, its registered office in Nevis may be the trust's registered office.

CONFIDENTIALITY
The confidentiality and the privacy of international trusts are ensured by legislation. Though a trust register is maintained, it only records the name of the trust and the date of settlement and is not a public document available for inspection. The only exception is where a trustee of a specific trust gives written authorization to a person allowing the inspection of the entry of that trust on the register. The Ordinance provides that all non-criminal judicial proceedings relating to the trust shall be heard in private and that no details may be published without leave of the court.

THE NEVIS EXEMPT TRUST (AMENDMENT) ORDINANCE, 2000
The Nevis International Exempt Trust Ordinance is widely admired by persons wishing to structure offshore trusts, whether for asset protection purposes or for estate planning purposes. However, as always, Nevis has undertaken dynamic action and improved on its trust law by enacting amendments to its Ordinance. These amendments enacted on 15 September, 2000 further enhance the attractiveness of the Nevis trust law. The changes cover three areas, namely:
1) Clarifies the registration requirements, including the introduction of the new concept of the qualified foreign trust;
2) Strengthens and clarifies the fraudulent conveyance provisions; and
3) Affirmatively prohibits the use of international trusts to further criminal activity. The major aspect of these changes are delineated in the following paragraphs:

REGISTRATION OF NEVIS TRUSTS AND FOREIGN TRUSTS
The first change addresses the misinterpretation of some users that registration of a trust may be delayed for many years after formation until a cause of action arises, or that trusts formed under English common law may obtain the benefits of the Ordinance notwithstanding the failure to register. The amendment makes it clear that trusts formed under the Ordinance may claim the benefits of the Ordinance only if they are properly registered under the Ordinance within 45 days of the creation. Such a provision would preclude trusts formed under the statutes of another jurisdiction from ever migration or fleeing to Nevis. By definition, these trusts are not Nevis trusts and could not be expected to be registered in Nevis as a Nevis trust until it migrated in long after creation.
To address this issue, the Amendment provides that a foreign trust for which future migration might be a possibility should register with the Nevis registrar as a foreign trust, thereby becoming a “qualified foreign trust' (QFT). In so doing, it preserves the trust's ability to make such a move in the future if and when the need arises.
A trust formed to be Nevis trust is a trust that is registered with the registrar and for which the law of Nevis is the proper law of all or any aspects of the trust under section 4 of the Ordinance. This trust must be registered with the registrar within 45 days of the date in which the trust is created, settled or established. The application must be in the form specified by the registrar and shall be accompanied by the prescribed fee, a notice of the name and registered office of the trust, and a certificate from a trustee company licensed in Nevis or a barrister or solicitor licensed to practice in Nevis. This certificate must certify that:

1) the trust will be an international trust as defined in the Ordinance; and
2) the date the trust was created, settled or established, as applicable.
As long as these requirements are met and the annual renewal fees are paid no later than 90 days after the current registration, the trust will be governed by the provisions of the Ordinance.
A foreign trust is a trust that provides for the law of a jurisdiction other than Nevis to be the governing law of all aspects of that trust. In order to be a QFT and be provided with the opportunity in some future date to migrate to Nevis and thereby obtain the full benefits of the Ordinance, the foreign trust must be registered with the Nevis registrar within 45 days of the date the trust is created, settled or established in the foreign jurisdiction.
As with the Nevis trust, the QFT application must be in the form specified by the registrar and shall be accompanied by the appropriate fee, a notice of the name of the registered office of the trust and a certificate from the trustee company licensed in Nevis or a barrister or solicitor licensed to practice in Nevis. However, in this case, the certificate must certify:

1) that the trust will be a qualified foreign trust s defined in the Ordinance;
2) the date the trust was created, settled or established in the foreign jurisdiction; and
3) the law under which the trust was settled.
In some cases, where good reasons are established by a trustee company, barrister or solicitor for delays beyond the 45 day registration period, the registrar has the discretion to extend such periods as needed. In effect, the amendments to the Nevis International Exempt Trust require timely registration of:
1) a Nevis trust in order to qualify as a Nevis International Exempt Trust;
2) a foreign trust to qualify as a QFT in order to preserve its ability to become a Nevis trust at some future date; and
3) a QFT that is in the process of migrating to Nevis.

CHANGES TO THE FRAUDLENT CONVEYANCE PROVISIONS
The new amendment to the fraudulent conveyance provisions as set out in Section 24 of the Ordinance accomplishes the following:
1) Limits the claims of a creditor alleging fraudulent conveyance to the property transferred in an alleged fraudulent transfer.
2) Defines a cause of action for purposes of starting the limitations time period as the earliest cause of action capable of assertion by the creditor against the Settlor.
3) Requires the creditor who wishes to allege fraudulent conveyance in the Nevis judicial proceeding to make all possible claims against all possible parties, including possibly the trust beneficiaries, at the time when the claims are first made, or risk being unable to raise such claims in future proceedings involving any such parties with a material interest.
4) Expands the definition of creditor for these purposes to include not only those persons who allege a cause of action, but also any judgment creditor or assignee of a creditor.

PROHIBITION OF USING NEVIS TRUSTS TO FURTHER CRIMINAL ACTIVITY
To prevent the use of Nevis trusts by those involved in criminal activities, this Amendment provides that the trust shall be invalid and unenforceable if any part of the trust assets are the proceeds of a crime for which the settler is convicted.

TRUST LAW ANALYSIS DETAIL - NEVIS INTERNATIONAL EXEMPT TRUST ORDINANCE, 1994
Modern legislation encouraging establishment of tax-exempt trusts has turned Nevis into a significant offshore financial centre. The Nevis limited liability company, which need not restrict its life span, has been recommended as an alternative to an offshore trust. Modern trust legislation with asset protection features has gone into effect in Nevis, enhancing its attractiveness to investors from abroad.
1. Legislative background. In April 1994, the Nevis Assembly approved the Nevis International Exempt Trust Ordinance with a liberal law that offers built-in protection for foreign trust assets. Minor changes to the Act were made in the Nevis International Exempt Trust (Amendment) Ordinance, 1995. Nevis has the legal right to pass this act under the autonomy it received when the Federation gained full independence in 1983. Domestic trust in Nevis are still governed by the 1961 Trustee Ordinance enacted by the Federation of St. Kitts and Nevis which was based on the English Trustee Act of 1925.
2. Formation. Non-resident settlors and beneficiaries now have the authority to form tax-exempt trusts with asset protection features based in Nevis. A major inducement of the Nevis International Exempt Trusts Ordinance is the relatively short period of two years during which a creditor may bring a suit claiming fraudulent transfer of its Settlor’s assets. This legislation is comparable to the laws of Belize, the Cayman Islands, and to that of the Cook Islands after which the Nevis International Exempt Trusts Ordinance is patterned.
Trusts in Nevis may be formed by oral grant of authority to the trustee, by a written declaration of trust or indenture of settlement, or by operation of law [Nevis International Exempt Trusts Ordinance '44]. All trust documents not in English must be accompanies by a certified translation if they are to be enforced in court [Nevis International Exempt Trusts Ordinance '50]. The Settlor and all beneficiaries of international trusts based in Nevis are required to be non-residents and none of the trusts' property may include land in Nevis. At least one trustee must be a trust company doing business under the law of St. Kitts and Nevis or a domestic company formed under the Nevis Business Corporation Ordinance of 1984 [Nevis International Exempt Trusts Ordinance '2]. An international trust must have a registered office in Nevis that is the office of the trustee company or corporation acting as trustee [Nevis International Exempt Trusts Ordinance '42].
3. Tax status. International trusts in Nevis are exempted from all taxes and stamp duties International Trusts Act, '43]. Offshore beneficiaries of domestic trust are subject to 10% withholding tax on remittances.
4. Minimum assets. Nevis does not require a minimum amount of assets to be placed in a trust at its inception or to remain in it during its existence.
5. Residency requirement. Settlors and beneficiaries of Nevis international trusts are required to be non-residents of Nevis [International Trusts Act, '2].
6. Registration. A Nevis Register of International Trusts is maintained for recording the names of all international trusts (but not the identities of their settlors), the names and addresses of their registered offices, and certification from a Nevis trustee company or attorney that the trust will be an international trust [Nevis International Exempt Trusts Ordinance '37]. Registrations must be renewed each year of the trust's existence [Nevis International Exempt Trusts Ordinance '38] and a trustee must notify the Registrar of Trusts when a trust terminates [Nevis International Exempt Trusts Ordinance '39].
Nevis does not require registration of a domestic trust's existence or filing a copy of the written instrument with any agency.
The registrar of trusts maintains a register of international trusts. To register a trust, the following must be submitted:
a. The registration fee of US$220
b. The name and registered office of the trust; and
c. A certification from a trustee company, barrister, or solicitor certifying that the trust will be an international trust.
d. The Trust renewal fee of US $220 is payable annually.
7. Revocable or irrevocable; void or voidable. Revocability of a trust is left to the Settlor’s discretion, and a trust will be deemed irrevocable if not expressly made revocable. All beneficiaries of a trust may agree to terminate the trust and divide its assets among themselves according to their interest in it. Beneficiaries of trusts with spendthrift provisions may not terminate the trust [Nevis International Exempt Trusts Ordinance '13]. A trust will not be declared invalid by a Nevis court on the grounds that (1) its is revocable, (2) the Settlor is the sole beneficiary or participates in its benefits, or (3) the Settlor may remove and appoint trustees and protectors or give them directions [Nevis International Exempt Trusts Ordinance '47].
Transfers to international trusts can be declared void by court order if a creditor proves that they were made with intent to defraud or left the Settlor insolvent [Nevis International Exempt Trusts Ordinance '24]. Nevis courts will not uphold international trusts created by reason of duress, mistake, or undue influence or by a Settlor suffering from any legal incapacity. International trusts having purposes so vague as to be uncertain or contrary to the laws of Nevis, conferring rights or imposing duties contrary to the laws of Nevis, or declared by a court to be contrary to public policy also will not be upheld by the courts [Nevis International Exempt Trusts Ordinance '23].
8. Settlor as beneficiary. The Settlor may be the beneficiary of a Nevis international trust [Nevis International Exempt Trusts Ordinance '32].
9. Perpetuity period. Nevis international trusts may exist for up to 100 years unless terminated sooner and are exempt form application of the rule against perpetuities [Nevis International Exempt Trusts Ordinance '5]. This stature was amended to allow trusts established for charitable and non-charitable purposes to have a duration exceeding 100 years. [Nevis International Exempt Trusts Ordinance '3].
Domestic trusts in Nevis continues to be governed by the common law rule against perpetuities, voiding a trust if transfers to it or powers conferred by it vest more than 21 years after the end of a life in being at the time the trust was created.
10. Wait-and-see provision. International trusts are not subject to the rule against perpetuities and trusts do not require a Await-and-see@ provision [Nevis International Exempt Trusts Ordinance '5]. Nevis law contains no Await-and-see@ provision to allow dispositions made to domestic trusts to continue to be regarded as valid until it is certain that they will not vest until after the perpetuity period lapses.
11. Accumulations. International trusts may accumulate income during their entire existence [Nevis International Exempt Trusts Ordinance '5]. Domestic trusts may be authorized to accumulate income from beneficiaries only until they come of age [Trustees Ordinance, '32].
12. Beneficiaries. Beneficiaries of international trusts must be identifiable as individuals, as members of a class, or by relationship to a specified person [Nevis International Exempt Trusts Ordinance '32]. Beneficiaries may disclaim their rights under a trust whether or not they have received any benefit from the trust [Nevis International Exempt Trusts Ordinance '33]. Beneficiaries are entitled to indemnification or their expenses including attorney's fees in defending a trust against creditor's action for fraudulent transfers if the plaintiff fails to prove the beneficiary acted in bad faith [Nevis International Exempt Trusts Ordinance '25]. Trustees of international trusts may add or remove beneficiaries if the trusts' terms empower them to do so [Nevis International Exempt Trusts Ordinance '32].
No specific requirements need to be met to be a beneficiary of a Nevis domestic trust. Trustees have discretion to allow disbursements of trust income for the maintenance, education, or benefit of beneficiaries during their minority and accumulate income for beneficiaries until they come of age [Trustee Ordinance, '32]. Beneficiaries who will ultimately have title to some or all of a trust's property may, in the trustee's' discretion, receive advances of up to half the assets they will receive, subject to the consent of other beneficiaries [Trustee Ordinance, '32].
13. Trustees and trustee companies. Trustee companies forming international trusts are not subject to a minimum paid-in capital requirement as are trustees of domestic trusts. International trusts must have at least one trustee but no more than four [Nevis International Exempt Trusts Ordinance '34]. At least one trustee of an international trust must be a trust company licensed under Nevis law or a company formed under the Nevis Business Corporation Ordinance of 1984 [Nevis International Exempt Trusts Ordinance '2]. Trustees of international trusts may appoint new trustees to fill vacancies [Nevis International Exempt Trusts Ordinance '35].
A Nevis domestic trust must have at least one trustee but no more than four trustees [Trustees Ordinance, '35]. Corporate trustees must have paid-in capital of $50,000 on total stated capital of $100,000 or more [Trustee Ordinance, '2]. Trustee may appoint attorneys, bankers, and stockbrokers as their agents to perform duties and receive funds on behalf of the trust [Trustee Ordinance, '24]. If trustees expect to be out of Nevis for more than one month, they may appoint substitutes to assume management of the trust while they are gone [Trustee Ordinance, '26[. Beneficiaries who compel trustees to commit breaches of trust may be required by court order to indemnify the trustees from loses they incur as a result of the breach [Trustee Ordinance, '64]. Trustee's' investments of domestic trust funds are limited to specifically defined classes of securities, which may be expanded by court order [Trustee Ordinance, '3].
14. Enforcers. Nevis trust laws have no provision on enforcers.
15. Protectors. A Nevis trust must provide for a protector with the power to remove a trustee and appoint additional trustees and with any other power specified in the trust deed. A protector may be the Settlor or a beneficiary or trustee. When a trust has more than one protector, the protectors may not act unless a majority agree to the action [Nevis International Exempt Trust (Amendment) Ordinance '3]. [Nevis International Exempt Trusts Ordinance '9]. Non-charitable purpose trusts must have a protector. If no protector is named or if the protector of a non-charitable purpose trust is unwilling to act for the trust, the Minister of Finance must appoint a protector [Nevis International Exempt Trusts Ordinance '8].
16. Confidentiality rules. Trustees generally are required as fiduciaries to respect accepted standards of confidentiality with regard to trust information. International trust managers are subject to the same level of secrecy for trust information as that imposed on bankers by the Confidential Relationship Act [Nevis International Exempt Trusts Ordinance '58].
17. Financial disclosures. Beyond the common law requirement for trustees to render accounts of their activities to a trust's beneficiaries, Nevis laws contain no provision for disclosure of financial information about trust operations.
18. Re-domiciliation. A Nevis trust may be governed by any law of the Settlor’s choice. Trusts whose terms do not specify a governing law will have their proper law determined with reference to the place where the trust will be administered, the location of the trust assets, the trustee's place of business, and the place where the trust's purpose are to be carried out.
Nevis international trusts may have certain aspects, notably those concerning their administration, governed by the laws of a jurisdiction different from that of the governing law of the rest of the trust. A trust created to be governed by the law of Nevis may have its governing law changed to that of another jurisdiction, and a trust created to be governed by law of another jurisdiction may have its governing law changed to that of Nevis. A trust will not be invalidated by a change that would ordinarily render one of its aspects invalid under its new governing law [Nevis International Exempt Trusts Ordinance '4].
19. Government and private fees. A registration fee will be charged on establishment of an international trust [Nevis International Exempt Trusts Ordinance '37], and an annual fee will be charged to maintain an international trust's registration [Nevis International Exempt Trusts Ordinance '38]. The initial fee to register a trust is US$200 and the annual fee for renewal is US$200. Private legal and banking fees are around US$500 to create a trust and a percentage of the trust's value, usually with a minimum of US$400-$500 per year, for maintaining a trust.
20. Exchange control. Nevis does not apply foreign exchange control to corporations doing business abroad although remittances in foreign currencies are subject to a 2% transfer tax. International trust in Nevis are specifically allowed to repatriate capital and income and are exempt from exchange controls [Nevis International Exempt Trusts Ordinance '43].
21. Tax treaties. By extension of the various countries' tax treaties with the United Kingdom, St. Kitts and Nevis is a party to income tax treaties avoiding double taxation with Denmark, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom. The extension to St. Kitts and Nevis of the United Kingdom's tax treaty with the United States was revoked in 1984. However, international exempt trusts do not qualify for the benefits of St. Kitts and Nevis tax treaties.
22. Restrictions. International trusts in Nevis must be settled by non-resident Settlor for the benefit of non-resident beneficiaries [Nevis International Exempt Trusts Ordinance '2]. International trusts whose purposes are contrary to the laws of St. Kitts and Nevis, which confer rights or impose duties contrary to public policy, may be declared invalid by the courts of Nevis [Nevis International Exempt Trusts Ordinance '23].
Other than the limitations placed on the range trustees have to invest funds [Trustees Ordinance, '3], no specific restrictions are placed on domestic trusts.
23. Asset protection. Nevis law on international trusts provides the full range of modern asset protection features including applying the stringent standard of proof beyond a reasonable doubt before finding Settlor guilty of fraud.
24. Fraudulent dispositions. The 1571 statute of Elizabeth I, which would void an entire trust if a disposition to it was found fraudulent in the courts, was specifically repealed by the Nevis International Exempt Trusts Ordinance [Nevis International Exempt Trusts Ordinance '49]. An unusual provision of the law is that creditors suing a Nevis international trust on allegations of fraudulent transfer by the Settlor must post a bond of US$25,000 dollars to cover potential costs in case they do not prevail [Nevis International Exempt Trusts Ordinance '55]. Plaintiffs have the burden of proving beyond a reasonable doubt (the standard required for criminal convictions) either that settlors intended to defraud them by making transfers to Nevis truss or that the Settlor was rendered insolvent by a transfer of a Nevis trust. Transfers of property to a trust before the creditor's cause of action arose cannot be voided for fraud. Transfers of trust property held subject to a judgment for fraud will not be void if they render the trust unable to pay the creditor's claim [Nevis International Exempt Trusts Ordinance '24]. Judgments in favour of creditors claiming fraud will be awarded only for the amount of the debt [Nevis International Exempt Trusts Ordinance '26] and will be paid only after indemnification of beneficiaries for expenses in defending the trust in the suit [Nevis International Exempt Trusts Ordinance '25].
25. Time limit to bring suit. Suits may not be initiated to recover property alleged to have been transferred to Nevis international trusts more than two years after the cause of action arose. Suits concerning transfers to international trusts taking place within two years after the cause of action arose must begin no more than one year after the transfer [Nevis International Exempt Trusts Ordinance '24].
26. Foreign court awards. Proceedings to enforce foreign court awards against a Nevis international trust or its Settlor, beneficiaries, trustees, or protector are not allowed if the subject matter of the suit was specifically governed by Nevis law or if the judgment was rendered based generally on application of law inconsistent with that of Nevis [International Trusts Act, '28].
27. Forced heirship. Dispositions to international trusts that would defeat another jurisdiction's rules on heirship or property rights of persons by virtue of their relationship to another person are immune to avoidance [International Trusts Act, '48]. However, property that was community property under the law of another jurisdiction at the time it was transferred to a Nevis international trust is treated as community property in any suit brought in Nevis [International Trusts Act, '57].
28. Other types of trusts. Nevis allows the formation of charitable trusts, spendthrift trusts and purpose trusts.
CHARITABLE TRUSTS
Charitable trusts are allowed to have more than four trustees [Nevis International Exempt Trusts Ordinance '34] and to continue in existence indefinitely [Nevis International Exempt Trusts Ordinance '5]. To be considered charitable, in general, trust purposes must be for the benefit of the community or a substantial segment of the community in Nevis or elsewhere. Charitable purposes are specifically defined as being for the relief of poverty, advancement of education or religion, protection of the environment, advancement of human rights and fundamental freedoms, and other purposes that are beneficial to the community [Nevis International Exempt Trusts Ordinance '7].
Domestic charitable purpose trusts are recognized in Nevis and their trustees are accorded the same powers as those of other trusts [Trustee Ordinance, '53].

SPENDTHRIFT TRUSTS
The Nevis International Exempt Trusts Ordinance specifically authorizes the use of spendthrift or protective trust for beneficiaries who are considered likely to invade trust assets to pay debts and outlines the terms that characterize them. These spendthrift trusts can make beneficiaries' interest subject to termination, impose restrictions on beneficiaries dealing in all or part of their income or future rights in the trust property, or provide for reduction or termination if a beneficiary becomes insolvent or exposed to seizure of property for the benefit of creditors.
Property in an international spendthrift trust is used to generate income for a beneficiary until the beneficiary's interests terminates or until the beneficiary authorizes trust income to be paid to a third party. If the payment to a third party is ordered, the trustee is given absolute discretion to disregard the request and to pay the trust income to the beneficiary and the beneficiary's spouse and children or, if the beneficiary does not have a wife or children, to the beneficiary or any successors as defined under Nevis's laws of interstate succession [Nevis International Exempt Trusts Ordinance '6]. Beneficiaries of a spendthrift trust may not vote to terminate the trust [Nevis International Exempt Trusts Ordinance '13].
The Trustee Ordinance authorizes the use of domestic protective or spendthrift trusts and outlines the terms that characterize these trusts. Property in a domestic protective trust is used to generate income for a beneficiary until the beneficiary's interest terminates or when the beneficiary authorizes trust income to be paid to a third party. If payment to a third party is ordered, the trustee is given absolute discretion to disregard the request and to pay the trust income to the beneficiary and the beneficiary's spouse and children or, if the beneficiary does not have a wife or children, to the beneficiary or any successors. If a life tenant of trust property agrees, beneficiaries may obtain rescheduling of benefits and allow creation of a series of protective trusts useful for assuring that beneficiaries behave in accordance with the settlor's wishes [Trustee Ordinance, '34].

PURPOSE TRUSTS
A trust can be created for non-charitable purposes if the purposes are specific, reasonable, and capable of fulfilment, and not immoral, unlawful or contrary to public policy. A non-charitable purpose trust must have a protector. The Minister of Finance will appoint a protector if there is none or the protector cannot or will not act [Trusts Act, '8]. Purpose trust may exist indefinitely [Nevis International Exempt Trusts Ordinance '5].

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