Isle of Man trust law has developed in parallel with English trust law. Isle of Man trust statutes are modelled on English trust statutes, and decisions of the English superior courts are of high persuasive authority in the Isle of Man courts.
Generally, any individual over 18 and of sound mind can under Isle of Man law make an inter vivos or testamentary trust. A body corporate may be a settlor or a beneficiary of a trust (subject to its constitutional documents and applicable law). Any individual may be a beneficiary of a trust. In order to establish a valid trust, there must be reasonable certainty as to (i) the intention of the settlor to do so (ii) the trust property and (iii) the beneficiaries. A trust for purposes is not permitted unless (a) for exclusively charitable purposes (b) pursuant to the Purpose Trusts Act 1996 (see below) or (c) in certain narrow exceptional cases.
A perpetuity period of 150 years has been permitted since 2001, prior to which the perpetuity period was 80 years. Isle of Man law has no restriction on accumulations of income during the perpetuity period.
A transfer by a settlor to a settlement to defraud creditors will be void as against the settlor’s creditors under the Fraudulent Assignments Act 1736. This will apply when a person is insolvent or the effect of the transfer is to leave him unable to pay his present debts or his known and ascertained debts which will fall due in the future. The Isle of Man High Court has held that an inability to pay contingent debts which may never materialise is not a state of insolvency for this purpose.
Download the full article here: Isle of Man Trust Law – A Brief Summary