Cayman Islands trust: STAR and ordinary trusts

What a Cayman trust is

It is a trust governed by Cayman law. You transfer assets to a trustee, and the trustee holds them for the people the deed names or describes.

Two forms matter most. An ordinary trust, often discretionary, lets the trustee decide on distributions within the deed and your letter of wishes. A STAR trust is a special form with its own rules.

The roles are few, and a STAR trust adds one:

• The settlor creates the trust and transfers assets.
• The trustee holds the assets and decides under the deed.
• The enforcer, named in the deed of a STAR trust, can hold the trustee to it.
• Beneficiaries, named or described, may receive distributions.
• A protector, if the deed creates one, can be asked to consent to key decisions.

The trust is the top of the structure. Assets such as shares or accounts often sit below it, in a company the trust owns.

How a STAR trust works

STAR stands for Special Trusts Alternative Regime. Its rules sit in the Trusts Act (2021 Revision), and the deed must say that the regime applies.

The main difference is the enforcer. In an ordinary trust, a beneficiary can ask a court to hold the trustee to the deed.

In a STAR trust, a beneficiary does not have standing to enforce it (s.100). The enforcer does that job, so the choice of enforcer matters.

The deed names the enforcer and sets its powers. Your lawyer advises who should hold the role and what happens if that person dies or steps down.

A family may consider a STAR trust to hold a business or serve a purpose, not only a group of people. Your lawyer confirms whether one trust can do both.

A STAR trust is unaffected by the 2024 change to the perpetuity rule, because it already sat outside it (source: Ogier).

The legal features page lists the rules with their sources and dates.

Who a trust in the Cayman Islands suits

This structure suits families and founders with business interests in several countries.

Reasons that bring people to this place include:

• They hold a family business and want the deed to set rules the trustee follows.
• They plan to pass assets on and want a long-lasting structure.
• They want one trustee and one set of records for assets in several countries.
• They are comparing island options and want sourced facts, not sales copy.

A trust is not the right tool for every goal, and the first review may show another route suits you better.

Our guide to wealth structuring explains how we approach that choice in general.

What the trustee does

The trustee legally holds the assets and must follow the deed. It keeps accounts and records, decides on distributions and signs the papers that move assets.

Whether a trustee must be a particular type of company, for example for a STAR trust, is a point your lawyer confirms for your case. Your lawyer confirms the conditions before any deed is signed.

A Cayman trustee company holds office as trustee, and we are your contact. Our part is the identity checks, the papers and the preparation with your lawyer. The trustee takes the decisions.

This split matters when something changes, such as a new beneficiary or a different protector. You send us the request, we prepare the papers, and the trustee decides under the deed.

A letter of wishes sits beside the deed. It tells the trustee how you would like it to use its discretion, and it does not bind the trustee.

Some families set up their own trustee company, known as a private trust company. Your lawyer advises whether that suits your family, since it adds its own papers and yearly work.

Documents and timeline

For a Cayman trust the order is fixed. Nothing is signed until your lawyer has reviewed the deed.

1. Enquiry, then identity checks.
2. Choice between an ordinary trust and a STAR trust, made with your lawyer.
3. Drafting of the deed, the enforcer’s powers for a STAR trust, and your letter of wishes.
4. Signing, with the acceptance of the trustee and, for a STAR trust, of the enforcer.
5. Transfer of assets to the trustee, or to a Cayman company the trust owns.

We first ask for identity documents, evidence of the source of funds and wealth, and beneficiary details. After that, timing depends on others: your lawyer, the trustee, the enforcer and the bank.

You get a checklist and a list of open items, not a promised date. An enforcer who has not accepted the role can hold up signing.

The step-by-step guide lists the documents in more detail, and the cost page explains what shapes the price.

Cayman compared with BVI and Bermuda

Cayman has the STAR regime and the 2024 perpetuity change set out on this site. The BVI has VISTA for company shares, and Bermuda has its own trust statutes, each described on its own page.

We do not rank them. The right place depends on your assets, your country and the people involved.

Three points usually decide:

• Whether a STAR trust fits, since its enforcer takes the place of a beneficiary’s right to enforce.
• Whether you want the trust to last indefinitely, which the 2024 change allows for ordinary trusts.
• Whether the trust holds a business, where the BVI offers VISTA instead.

Each place has its own page with sources: BVI and Bermuda. The jurisdictions hub lists the rest.

Short answers to common questions sit on the plain-answers page.