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Bermuda trust: how it works
A Bermuda trust is a trust governed by Bermuda law, where a trustee holds assets for the beneficiaries a deed names. Families also use private trust companies and purpose trusts. We run the checks and coordinate the papers, and your own lawyer confirms the structure for your country.
Reviewed by a senior trust administrator, updated
Key facts
- Governing law
- Trustee Act 1975; Amendment Act 2025 in force 10 October 2025[1]
- Perpetuity period
- Perpetuities and Accumulations Act 2009: no perpetuity period for new trusts[3]
- Reserved settlor powers
- Trusts (Special Provisions) Act 1989: reserved powers added by 2014 amendment[2]
Numbers in brackets point to the Sources list at the end of this page.
Swipe sideways to see the whole diagram.
- SettlorSets up the structure and transfers assets into it
- transfers assets under a trust deedTrusteeHolds the assets and manages them under the trust deed
- holds and distributesBeneficiariesPeople who benefit from the trust under its terms
- Trustee holds legal titleTrust assetsThe property held in the structure
Roles and notes
| Part of the structure | What it does |
|---|---|
| Settlor | Sets up the structure and transfers assets into it |
| Trustee | Holds the assets and manages them under the trust deed |
| Beneficiaries | People who benefit from the trust under its terms |
| Trust assets | The property held in the structure |
- The settlor transfers assets to the trustee under a written deed.
- The trustee holds the assets and decides under the deed.
- Beneficiaries are named or described in the deed.
- A purpose trust can hold shares of a private trust company for a family.
What a Bermuda trust is
Three Bermuda statutes carry most of the weight. The Trustee Act 1975 sets a trustee’s general duties. The 1989 Act covers settlor powers and purpose trusts. The 2009 Perpetuities Act deals with how long a trust may run.
You sign a deed, the trustee takes the assets and holds them under it. In a discretionary deed the trustee chooses who in the named class receives distributions, guided by your letter of wishes.
A Bermuda discretionary trust can also have a protector, whom the deed asks to consent to key decisions.
A 2025 amending Act, in force on 10 October 2025, updated the trustee’s investment powers (source: Carey Olsen via Legal 500).
A settlor can keep some powers, such as over investments, without making the trust invalid. The 1989 Act was amended in 2014 to say so, and your lawyer confirms how far it goes.
Bermuda private trust companies
A private trust company is a Bermuda company that a family forms to act as trustee for its own trusts only. The family picks the board, so it keeps a say in who decides on distributions.
In practice the board keeps accounts and minutes, and the family needs a plan for the day a director leaves. Your lawyer confirms what the company needs for your family.
A company cannot own itself, so its shares need a holder. A purpose trust usually holds those shares, as the next sections explain.
This route suits a larger family with several trusts. For one small trust the extra layer may not pay for itself.
Purpose trusts in Bermuda
A purpose trust is a trust for a stated purpose rather than for beneficiaries. Bermuda has a statute for it, in the same 1989 Act.
A purpose trust can hold shares of a private trust company or of a family business. The deed names an enforcer who can hold the trustee to the purpose.
Your lawyer confirms whether a purpose trust may hold Bermuda land.
A purpose trust has no beneficiaries to ask for accounts. That puts more weight on the choice of enforcer and on a deed that is clear about the purpose.
Who a trust in Bermuda suits
This structure suits families who want their own trustee company, and advisers whose client holds a Bermuda company to place in a trust.
Reasons that bring people to this place include the following. Each one is a typical use:
- A family wants a private trust company, with a purpose trust holding its shares.
- A settlor wants to keep a say over investments, which the 1989 Act allows since 2014.
- A founder plans succession over several generations, where the 2009 Act sets no perpetuity period for new trusts.
A trust is not the right tool for every goal. The first review may show that a simpler route, or another place, suits you better.
Our guide to wealth structuring explains how we approach that choice in general.
Documents and timeline
The order depends on the trustee model. With a professional trustee, the deed comes straight after the structure is designed. With a family trustee company, the company and its purpose trust come first, so the trustee exists on signing day.
- Identity checks for every person involved.
- Choice of trustee model with your lawyer.
- For a family trustee company: formation of the company, then the purpose trust deed that holds its shares.
- The trust deed and your letter of wishes, drafted by a Bermuda law firm.
- Signing, and the trustee’s written acceptance of office.
- Transfer of assets to the trustee.
Company shares entering the trust need the company’s constitutional papers and a certificate of compliance. Nothing is signed until your lawyer has reviewed the deed.
We give you a checklist and a list of open items, not a promised date. A missing bank letter or a director’s identity paper can hold up every later step.
The step-by-step guide lists the documents in more detail, and the cost page explains what shapes the price.
Bermuda compared with Cayman
Bermuda has purpose trusts under its 1989 Act. Cayman has the STAR regime, with its own enforcer.
We do not rank the two. For a family company, Bermuda’s purpose trust is the tool that holds a private trust company’s shares, and that is the point to test against your plans.
Three rows set the two apart:
- The special form: a Bermuda purpose trust or a Cayman STAR trust.
- The time limit: the 2009 Act leaves new Bermuda trusts without a perpetuity period.
- The latest change: the Trustee Amendment Act 2025, in force 10 October 2025, on trustee investment powers.
The side-by-side comparison sets out both places with sources, and the Cayman Islands page covers that place on its own.
Short answers to common questions sit on the plain-answers page.
Frequently asked questions
Why do families use Bermuda private trust companies?
A family trustee company lets the family choose who sits on the board, and so who decides on distributions. Before you form one, check who owns its shares and what happens when a director leaves or dies. Your lawyer then judges whether the extra layer fits your family.
What is a Bermuda purpose trust?
A purpose trust holds assets for a stated purpose, not for named beneficiaries. A family can use one to own the shares of a private trust company. Bermuda has a statute for it, and your lawyer confirms the conditions, including whether it may hold land.
Who can set up a trust in Bermuda?
Whether the structure suits you depends on your home country and tax position, which your own lawyer confirms. Tell us your country of residence in your first message, and nothing is signed until your lawyer has reviewed the deed. We send your lawyer and tax adviser the same drafts we send you.
Can a Bermuda trust last forever?
The Perpetuities and Accumulations Act 2009 removes the perpetuity period for new trusts. Your lawyer confirms how it applies to your deed, including how it treats Bermuda land and older trusts. The Act is published on Bermuda Laws Online, and we send your lawyer the same copy.
Sources
- Carey Olsen via Legal 500: The Trustee Amendment Act 2025, Bermuda (2025), read 2026-11-05.
- Bermuda Laws Online: Trusts (Special Provisions) Act (1989), read 2026-11-05.
- Bermuda Laws Online: Perpetuities and Accumulations Act (2009), read 2026-11-05.