May 2018

Laws that protect vulnerable people in Jersey

Posted on May 15, 2018January 23, 2024 By Joanna Pegum

older woman and carer look out at the sea

In Jersey, two laws brought into force in recent years have radically changed the approach to estate planning for vulnerable people. They are the Capacity and Self Determination (Jersey) Law 2016 (the Capacity Law), and the Signing of Instruments (Miscellaneous Provisions) (Jersey) Law (the Signing Law).

Highlights of the Capacity Law include lasting powers of attorney (LPAs) and statutory wills, which are for those who lack capacity to make a will themselves.

Lasting powers of attorney

The new law empowers Jersey residents to plan ahead and set out how they would wish for their affairs to be organised, if they are unable to do so for themselves.

For the first time, a Jersey resident can grant an LPA, which, in addition to health and welfare issues, can be used to deal with their property and financial affairs if they lose mental capacity.

The Capacity Law expressly provides for the recognition and enforcement of LPAs that have been created and registered elsewhere in the ‘British Islands’.

Jersey’s States Assembly is anxious for all residents to create LPAs, and intends them to be much simpler than those in use in England and Wales, with an online system available for users. The States Assembly is aware that simplification and accessibility should not be at the cost of safeguards against abuses of LPAs, and recommends taking professional advice for anyone creating one.

Making a will on behalf of someone else (a statutory will)

For the first time, statutory wills are now available in Jersey. The island’s Royal Court now has the power to direct that a will may be executed on behalf of a person lacking testamentary capacity. However, any such applications to the Royal Court cannot include immovable property outside the island, such as a home in England.

Execution of documents

In addition to the Capacity Law, the Signing Law has also come into effect.

The Signing Law is the result of uncertainty in Jersey law concerning the effectiveness of signatures put to documents on behalf of physically incapacitated persons.

The new law ensures that vulnerable islanders, by reason of physical incapacity, are not deprived of their rights and will ensure that they can execute wills, powers of attorney, LPAs and affidavits.

These developments will empower the vulnerable in the island’s population and those who support them.

Donna Withers TEP is Head of Probate and Wills at Bedell Cristin, Jersey

I am worried that a trustee has mismanaged my trust fund. What can I do?

Posted on May 11, 2018August 16, 2022 By Joanna Pegum

Trustees are appointed to safeguard funds in a trust, and are duty-bound to act in the best interests of the beneficiaries. While most trustees will carry out their duties conscientiously; occasionally, there is mismanagement.

There are a number of ways in which a trustee can mismanage a trust fund. This can include:

Using trust funds to make investments that are not permitted by the trustee’s powers of investment, or which are outside the investment or risk profile for the trust, such as hazardous or speculative investments
Failing to exercise reasonable skill and care when making investments
Distributing trust assets to non-beneficiaries, or to a beneficiary who is not entitled to them under the terms of the trust document
Using trust funds for the trustee’s own personal advantage – even if he or she only ‘borrows’ the money
Reaping financial benefits from trust funds without permission
Making decisions based upon personal interests, instead of those of the beneficiaries.
Failing to take reasonable steps to protect the trust fund.

How can I find out if a trust fund is being mismanaged?

Trustees have a duty to account to beneficiaries for their administration of the trust.

Beneficiaries are entitled to demand financial information showing how the trust fund has been managed. If the trustee refuses to provide this, the beneficiary can apply to the court for an order compelling the trustee to produce it.

Once the beneficiary has the information, they should then be able to assess whether there has been any mismanagement.

If the affairs of the trust are complicated and/or it is unclear whether full information has been provided, it may be advisable to use a forensic accountant to discover whether there has been mismanagement, and whether complete information has been provided.

I’ve established that the trust fund has been mismanaged – what are my options?

There are a number of different types of remedy available, depending on the nature of the mismanagement:

If trust funds have been misappropriated, or wrongly distributed to non-beneficiaries, you can bring a court action for their recovery.
If the trustee has failed to exercise care and skill, or has made unauthorised investments, you can bring an action against him or her to make good the losses.
If the trustee has, without authorisation, profited from their position as trustee, you can bring an action against him or her.

As well as proceeding against the trustee, beneficiaries may also be able to proceed against third parties who dishonestly assisted the trustee in his or her breach of fiduciary duty – for example, anyone else who may have profited from their misconduct.

You can make an application to remove the trustee from office, if you do not have the power to do so under the trust deed, or if the trustee will not step down voluntarily.

Before bringing any such action, however, it’s best to take legal advice. If the legal action is unsuccessful, you may run the risk of having to pay the trustee’s costs. Your advisor may suggest alternatives to court action, such as direct negotiation or mediation, in the first instance.

Oliver Passmore is an Advocate and Managing Associate at Ogier, Jersey

What should I look for when choosing a trustee?

Posted on May 4, 2018February 8, 2021 By Louise Polcaro

If you’re thinking about setting up a trust, either to take effect in your lifetime or after your death, you need to take care when choosing a trustee.

In setting up a trust, you are giving up ownership of the assets, and signing them over to the trustee. The trustee will then take responsibility for managing the money or assets that you have set aside in the trust for the benefit of someone else (the beneficiaries). The trustee must use the money or assets in the trust only for the beneficiary’s benefit and everything the trustee does must be done in the beneficiary’s best interests.

Clearly, with such an important responsibility, it is essential to choose the right person to act as trustee.

Who can be a trustee?

As a general rule, anyone over the age of 18 can be a trustee. But you will want to be very careful about who you give the power and responsibility of trusteeship to.

Many people appoint a trusted family member or friend for trusts that take effect after their death. For trusts that take effect in your lifetime, you can appoint yourself and your spouse/civil partner/partner as trustee(s) if you wish, so that you retain some control over the assets and the decision-making power, though you must exercise this for the benefit of the beneficiaries.

How many trustees should there be?

Two or three are preferred. Four is the maximum (unless it is a charity), and only one trust corporation is needed.

Must I appoint a professional trustee?

You do not need to appoint a professional trustee, but this can be helpful if the others are unfamiliar with the obligations of the role. Alternatively, you can appoint family or friends and they can take advice from a professional trustee as and when necessary.

What do I need to think about when choosing a professional trustee?

If you decide to use a professional trustee, make sure you do some research before you sign up with them.

How long has the company been trading?
Are they regulated by any body/bodies?
Have they signed up to any professional codes?
Do they have a good reputation?
Are their charges reasonable?
Do they have professional indemnity cover, or other protection in place?
Who are the directors? Check their credentials and background

You should take your time and shop around to ensure you are completely comfortable with the company before you make a decision.

Final thoughts

Ultimately the clue is in the name: ‘trust’. You must make sure you trust the person or people you appoint as trustee(s). This is an important decision and must not be taken lightly.