BCS Products | Authorised Purpose Trust
A Purpose Trust is a charitable trust establish for the obtainment of a particular purpose as set out in the trust deed. In order to meet the statutory requirements, a Purpose Trust must have a purpose which is possible of being carried out; the purpose must not be contrary to public policy or unlawful; and the trust instrument must specify the circumstances which can lead to the termination of the trust; and must also provide for the disposition of surplus assets of the trust.
The Purpose Trust Act, 2004 recognizes that Bahamian trusts can be established for non-charitable purposes, including holding, or investing in shares in a company or other assets which may amount to trust property. Under the law there is no requirement that beneficiaries be named, although authorised applicants have to be appointed to ensure the trustees are fulfilling their obligations under the trust.
A Purpose Trust affords flexibility with regard to the objects of the trust. Individuals and corporations can be deemed as objects. The trust deed can also provide for more than one object, with the trustees having the discretion to allocate capital and income among the different purposes or objects of the trust
One of the other benefits of establishing a Purpose Trust in The Bahamas is that it is not subject to taxation under Bahamian law.
The Act empowers the trustees to reform the trust in the event that the trust becomes generally opposite the intent of the trust.
It is possible to use the Purpose Trust for a number of estate planning and commercial uses, some of which are:
- to hold shares of a Company or a hold a single asset
- to establish trusts for generational use in family structures
- to form mutual funds