Bahamas Trusts - The Rule Against Perpetuities (Abolition) Act, 2011

A perpetuity period is the period contained in a trust deed, which defines the termination date of the trust and restricts the period in which the income of the trust may accumulate. Prior to December 30^th 2011, all trust instruments had a perpetuity period which was either incorporated into the trust instrument, or if not incorporated, was prescribed by statute.  This mandatory period was a product of the “rule against perpetuities” which prohibited trusts of excessive duration.

The Bahamas, under the Rule Against Perpetuities (Abolition) Act, 2011, has abolished the rule against perpetuities and as a result, trusts created on or after December 30^th 2011 do not require a perpetuity period to be incorporated into the trust instrument, and have no statutory prescribed perpetuity period.

Under the Trustee (Amendment) Act, 2011, the power of amendment under trusts created before December 30^th 2011 and which have perpetuity periods of 80 years or less, may be used to extend the perpetuity period up to, and not exceeding 150 years.

If a disposition of an interest in property was made before December 30^th 2011, a trustee can make an application to the Court under the Rule Against Perpetuities (Abolition) Act, 2011 to remove the perpetuity period of that trust.

The court, upon such an application will make such an order subject to terms which protect the interest of the persons affected by the disposition.

This post is intended for your information only and nothing contained in this post is intended to be construed as a legal opinion.  If you require specific legal advice you should contact a Bahamian trust and estate planning attorney.  You can contact a Bahamian trust and estate planning attorney by clicking here.