Introduction of the Trust and Trustees (Amendment) Act (Act XI of 2014)
The Trust and Trustees (Amendment) Act (Act XI of 2014) introduced new provisions to the Trust and Trustees Act with the aim of improving and enhancing Malta’s status as a trustee jurisdiction.
Amongst its main amendments, this Act introduced variations in the duration of Trusts which perpetuity period is now extended to 125 years.
Furthermore, it launched a minimum capital requirement of €15,000 for trustee both if these are an individual or body corporate. The same article also introduced the requirement of insurance cover for the same at all times. Other additional provisions require the granting of authorization to act as mandatories, administrators, trustee, and director of a private foundation before any persons may act as one.
Moreover, the amendments see the introduction of the concept of a ‘Family Trust’ applicable when the Trustee companies are set up solely in relation to such family trusts. In such a case the trustee is required to register with the authority rather than the more stringent regulatory process of authorization required out of other trustees.
The Settlor may, in circumstances set out in a newly established article 14A, act to reserve or grant powers under the terms of the trust. This reservation is possible in the grant of any beneficial interest, the powers of appointment or removal of any trustees, protectors or beneficiaries, or the appointment of investment adviser or managers.
Another important amendment is the introduction of the office of ‘Enforcer’ in scenarios when a trust is set up for a charitable purpose. When considering that in such a trust there would be no beneficiaries it is now established at law that the Enforcer will have the role and duty of monitoring the trustee and ensure the carrying out of his obligations vis-à-vis the trust.