On the 7th of October 2016, the Trusts and Trustees (Protected Disability Trusts) Regulations (the “Regulations”) came into force by virtue of Legal Notice 324 of 2016. The aim of the Regulations is to provide for the establishment and administration of trusts having at least one person with disability as a beneficiary.
The Protected Disability Trust (the “Trust”) may be set up by a family member. The trust deed of a Trust must state that:
the person with disability should benefit from the Trust assets exclusively; or
the parents of the person with disability are the preferred beneficiary during their lifetime and following their demise, the person with disability becomes the sole beneficiary under the Trust.
These Regulations provide for certain safeguards in relation to the person with disability. They emphasise the fact that during the lifetime of the person with disability, the trustee shall act and administer the Trust assets in the paramount interest of such person. In addition, if there is any immovable property included in the Trust assets which constitutes the principal residence of the person with disability, the trustee cannot dispose of such property unless with the written consent of the protector and with upon receiving confirmation from the court after having determined that such disposal is in the interest of such person with disability.
A protector should be appointed in all cases and his powers shall be exercisable and come into effect not later than the date when the person with disability becomes the sole beneficiary of the Trust. The Regulations also provide for instances where the protector should give his consent or instances where his advice should be sought.
Please feel free to contact us should you require more information about Protected Disability Trusts.