1. Form:The Trust can be in any language provided there is a proper English translation: This is unique to Samoa.
2. Protection against foreign succession rules:There are provisions preventing the enforcement of foreign judgments in Samoa with regard to foreign succession rules or claims in foreign matrimonial proceedings, which are as good as in any other jurisdiction.
3. Asset protection:There is a 2 year rule so that if the creation of the Trust and any disposition to the Trust took place more than 2 years after a creditor’s cause of action arose against the Settlor (the creator of the Trust), the Trust and the assets transferred to it are protected from the creditor’s claim. This is a sensible period, being neither too short and thus open to criticism or failure nor too long to be practical.
4. Duration of a Trust:This concerns the period during which a Trust can validly continue. Like only Labuan, Samoa offers total flexibility. The Trust can continue indefinitely or it can last for a fixed period. If it lasts for a fixed period, then this period can be made longer or shorter or the Trust can be changed to continue indefinitely. If the Trust continues indefinitely, then it can be changed to last for a fixed period.
5. Accumulation of income:Income can be accumulated throughout the continuation of a Trust.
6. Parties to the Trust:Detailed provisions are made for both a Protector and an Enforcer (of a Purpose Trust). There are specific and useful default powers exercisable by a Protector, which will apply if the Trust is silent in that respect. These are as good as in any other jurisdiction.
7. Trustees’ powers:Provision is made for a statutory duty of care to be observed by Trustees in the exercise of certain powers. This can be contracted out of in the terms of the Trust Deed. This is particularly helpful and reassuring for Beneficiaries, because they know the standard of care which a Trustee must exercise. These provisions follow those in UK and Singapore. There are specific and detailed powers concerning investment, delegation, the use of nominees and custodians, insurance and the remuneration of Trustees.
8. Reservation of powers to a Settlor:There are wide reserved powers to a Settlor, which compare well with those in Cayman, Dubai, Jersey and Labuan. There is also provision for “prescribed directions”, which is what a Settlor can give to a Trustee, when the Settlor has reserved powers. The Trustee is protected if it complies with such directions. This is unique to Samoa.
9. Continuing control by a Settlor or by others:This concerns other methods of providing continuing control, even though there is a Trust. Otherwise the Trustees must hold the trust property for the Beneficiaries and exercise proper control over it.
There is the Samoa International Special Trust Arrangement (“SISTA”): This is similar to the Virgin Islands Special Trusts Act (“VISTA”) and to the Labuan special Trust (“LST”). Here the objective is to permit a Samoan Trust to hold and not diversify the shares of a Samoan company and let others than the Trustees act as directors of the company, without the Trustees being at risk for that reason.
There is a structure combining a Trust with a Limited Partnership. This enables a Samoan Trust to hold as an asset the interest of a Limited Partner in a Limited Partnership and permits the General Partner, who is required by Limited Partnership Law to control day to day (as well as hold the assets for the partners of the Limited Partnership in the ratio in which they share the capital of the Limited Partnership) to do that, without the Trustees being at risk. Samoa is unique in having legislated for this. This solution does not confine the structure to one jurisdiction (like SISTA) but rather the Limited Partnership and any companies involved can be formed in any jurisdiction. Also, since the Trustees do not hold the actual assets but merely an indirect interest in them, they cannot misappropriate anything.
10.Types of Trust:apart from SISTA there are several specific types of Trust:
Charitable Trusts:Many jurisdictions have Trusts which are dedicated to the benefit of charity. Samoa is no exception but there are two important factors: The first is that the definition of charity is the widest available; the second is that the Settlor can enforce the Trust while he is alive and capable of doing so and thus can ensure that the charities he wishes benefit.
Purpose Trusts:These are trusts for purposes rather than persons and thus they have to have an Enforcer to enforce the purpose. As with other jurisdictions, Samoa permits such trusts to be for a purpose or purposes alone or for a purpose or purposes and for persons and/or charity. If the purpose comes to an end another purpose can take over or persons or a charity or charities can benefit. These provisions are as good as those in any other jurisdiction.
11. Powers to obtain information and Confidentiality:Currently who can receive what information about a Trust is a difficult legal question. There is a need for statutory guidelines to provide certainty. Samoa provides modern and useful guidelines for this and these are as good as or better than any other jurisdiction. Apart from these provisions, information concerning a Samoan Trust is confidential.
Relevant Legal Adviser: Mark Lea
Partner, Lea & White, Solicitors (Read his profile)