Amendments to the Trusts (Jersey) Law 1984

On 20 March 2026, the latest amendments to the Trusts (Jersey) Law 1984 (TJL84) came into force. These amendments follow a period of consultation involving the Trust Law Working Group and the wider finance industry. This update summarises the changes and includes some commentary from Edward Devenport on them.

Introduction

TJL84 has been amended on various occasions since it came into force over 40 years ago.  The further amendments are summarised below.

Comment: The amendments are more in the nature of evolution than revolution and, in some respects, are a response to developing case law

Priority of secured creditors and the trustee’s lien (amendment to Article 43A)

The Privy Council has heard appeals from cases concerning the nature of liens of trustees of Jersey law trusts in ETJL v Halabi and ITGL v Fort Trustees [2022] UKPC 36.  The Privy Council concluded, amongst other things, that the right of indemnity of trustees and former trustees carries with it a proprietary interest in the trust property in their favour (i.e. the trustee’s lien).  However, there remains some uncertainty on the impact that the voluntary creation of security over the trust fund (such as in the case of a trustee granting a mortgage over trust property to commercial lenders) has on the lien, especially the lien of a former trustee who is not party to the security arrangements.  The amendment to Article 43A clarifies this to say that such security would rank ahead of such liens.

Comment: One would expect that such a clarification would be welcomed by lenders to trustees, though understandably former trustees may have greater reason to reflect on it.  However, on the latter point, it is only in the last decade that Jersey trust lawyers have been confident, on the basis of developing case law that a trustee had a lien at all (no mention is made of them in TJL84), and therefore a trustee who retired before then is unlikely to have placed reliance upon the concept when considering security for their liabilities when retiring.  Moreover, in our experience, most retiring trustees accept commercially that the value of the indemnity they receive can potentially be undermined by factors outside their control (for example future investment losses in the trust fund) and this change is arguably just another example of that.

Ability of the beneficiaries collectively to call for the termination of trusts (amendment to Article 43)

The Guernsey case of Rusnano [2019] GRC 011, decided that the members of the class of beneficiaries of a discretionary trust could together terminate the trust provided that they were of full age and capacity, even if there was a power to add beneficiaries.  This was based on an interpretation of a particular provision of the Guernsey trust statute which is very similar to the equivalent in Article 43(3) of TJL84. This was something of a surprise for some local trust lawyers who had assumed that the position would be the same as in England under the rule in Saunders v Vautier and where recent authority suggests that a power to add beneficiaries would prevent such a termination.

Article 43(3) has been amended so that the presence of a power to add beneficiaries, or default charitable or non-charitable purposes, would prevent termination by the beneficiaries.

Position where a sole trustee purports to resign (amendment to Article 19)

It is self-evident that the statutory power to resign by notice to co-trustees in Article 19(1) of TJL84 does not apply to a sole trustee.  However, it was not clear whether the same applied where the power to resign was conferred by the terms of the trust (for example, a power to resign by notice to a protector).  Article 19 has been amended to make it clear that it does, so that a sole trustee cannot resign in that manner.

Comment: this seems an uncontroversial amendment in that it must be undesirable for any trust to be left with no trustee.

Minor corrections

Minor corrections have been made to correct inconsistencies in the wording of TJL84.  These include eliminating the inconsistency between Article 55(1) (so that it refers to any notice not just actual notice) and other provisions of TJL84 which refer to notice (actual or otherwise).  Article 55(1) protects persons dealing with trustees who are bona fide purchasers for value without actual notice of a breach of trust. There seems to be no justification for this inconsistency, which is not present in the Guernsey trust statute.

Comment: these amendments seem uncontroversial.

Note

Edward Devenport is a member of the Trust Law Working Group which contributed towards the preparation of the Government’s consultation paper.  Note that, in so far as this update includes commentary on the changes, it represents Edward Devenport’s own views and does not necessarily represent the views of the other members of the Trust Law Working Group.