The Problem
There have been a growing number of articles and discussions surrounding the issue of Jamaica’s aging population. These discussions often focus on the increased strain on the health care system due to rising chronic diseases, the increased demand for long-term care services and geriatric specialists, and even considerations of the economic impact of a declining working-age population. For those caring for persons with special needs or concerned about how they themselves will be cared for during their twilight years, the problem hits closer to home: what will happen to you or your loved one when ill-health, incapacity or death strikes you. Who will care for you or those you love?
The Solution
Creating a trust may be just the answer for you.
A trust is the relationship between at least one person (the trustee) and certain property (the trust property) which the trustee holds for the benefit of another person or persons (the beneficiary) or for a designated purpose.
Who can be a trustee?
Anyone, whether an individual or a company, and including even the very person establishing the trust (the settlor), can be a trustee. However, anyone providing trust services as a business must be licensed with the Financial Services Commission as a licensed trust service provider under the Trust and Corporate Services Providers Act. This means that you, the parent or other family member, can continue to care for yourself or your special needs person by acting as the trustee during your life (or so long as you are able), and provision can be made for the appointment of a new trustee to continue to provide care in the manner consistent with your desires for you or your loved one after you are no longer able. Alternatively, the trust can be created with a third party trustee, whether or not a family member, while still requiring that your input as care-giver, or the input of some other persons with whom you are comfortable, is required for critical decisions related to the care and maintenance of you or your special needs loved one. The Trusts Act calls this person a “Protector” and provides expressly that the instrument creating the trust may contain provisions subjecting the exercise of any of the trustee’s powers to the requirement for the prior consent of the settlor or some other person or persons.
How many trustees must the trust have?
The trust vehicle is very flexible. The Trusts Act essentially ensures that a trust can be established with any number of trustees desired by the person creating the trust, even just one person. If the trust is, however, going to have just one trustee, that trustee must either be a corporate trustee residing in Jamaica, the Administrator General, replacing a sole trustee or the terms of the trust expressly allow for the appointment of a sole trustee.
What can be trust property?
The Trusts Act expressly provides that any kind of property may be held on trust. Additionally, the trust can provide for property to be added to the trust at different times. This means, therefore, that you could create the trust initially with a small (or large) sum of money (there is no minimum or maximum sum) and provide, for example, that on your death (or at some other time) the home or shares or additional cash or investments, should be added to the trust. Property that is placed in the trust is generally no longer treated as your asset. It has been transferred to the trustee to be held for the benefit of the beneficiaries. The flexibility of the trust arrangement, however, can allow you to go at your own pace in putting assets aside for the protection of your loved ones.
How long can the trust exist?
A Jamaican trust can now continue in existence for an unlimited period. You can therefore rest assured that your arrangements can live on to ensure continued care for your loved one so long as he/she lives or for generations to come. Whether you have used a corporate trustee which has perpetual succession (and does not die just because the shareholders or directors die) or have made provision for the appointment of new trustees upon the death or incapacity of an individual trustee, your trust can live on and continue to serve as the means to provide care for your loved one.
How is the trust created?
No special form is necessarily required to create the trust. It need not even be in writing, unless the trust property includes land. It can be created by an oral declaration, an instrument in writing, by conduct or in any other manner whatsoever. We, of course, highly recommend creating the trust in writing under the guidance of a qualified professional to provide greater certainty and peace of mind that your designated trustee and/or protector will know and understand how you wish your loved one to be cared for.
A trust, therefore, can be a very flexible vehicle to use to ensure that you or your loved one can continue to be cared for even after you are no longer able to do so.
Hilary Reid is a Partner at Myers, Fletcher & Gordon and is a member of the firm’s Commercial Department. Hilary may be contacted via hilary.reid@mfg.com.jm or through the firm’s website at www.myersfletcher.com.
