Guernsey has long been recognised as a stable, sophisticated and adaptable jurisdiction for trust structuring.
Its trusts regime offers a blend of flexibility, confidentiality and legal certainty, making it a compelling option for international families, entrepreneurs and corporates alike.
What is a trust?
At its core, a trust is a legally binding arrangement under which a settlor transfers assets to a trustee to hold for the benefit of beneficiaries or for a specified purpose. The terms are set out in a trust instrument and Guernsey law allows that instrument to be tailored to the settlor’s needs and objectives, including the ability for the settlor to be among the beneficiaries or even a trustee in appropriate circumstances. Trustees manage assets in accordance with the instrument and the strict fiduciary and statutory duties imposed by Guernsey law, often guided by a non-binding letter of wishes that informs distributions and the trust's asset management philosophy over time.
Anonymity and confidentiality
Guernsey trusts also offer meaningful confidentiality advantages. Legal and beneficial ownership are separated, which means the trustee, not the beneficiaries, is the registered owner of the trust assets and the trust instrument is not a public document or required to be registered, save for certain unit trusts used commercially. Where appropriate, a declaration of trust may be used so the settlor’s name does not appear on the face of the document. These features sit alongside robust anti money laundering obligations on any firm conducting trust company business in Guernsey. It is worth mentioning that there is no requirement for a Guernsey trust to have a Guernsey-based trustee and in practice Guernsey trustees frequently administer non Guernsey trusts and vice versa, supporting global structuring needs.
Estate and succession planning
Continuity of ownership and probate formalities
Trusts can be used to ensure the continuity of ownership of trust property. Placing a family business or other key assets into a trust can avoid fragmentation of ownership on death, protect stewardship and preserve a long-term vision for the next generation. Where a fixed trust is used, the settlor can specify exactly who benefits and in what proportions. However with a discretionary trust, the trustee exercises its discretion in the best interests of the beneficiaries. Importantly, assets held in trust do not form part of the settlor’s estate on death, removing the need for probate proceedings in relation to those assets - helping families avoid delays and uncertainty following the death of the settlor.
Succession planning
Guernsey law is also designed to address international succession laws. For individuals domiciled outside Guernsey, forced heirship or similar rules that might otherwise restrict testamentary freedom will not affect valid transfers or dispositions into a Guernsey trust. Practical steps remain important, such as considering the residence of trustees and beneficiaries and the situs of assets where forced heirship regimes apply, but the legislative framework itself is highly robust.
Matrimonial proceedings
Trusts are often part of holistic family wealth protection. In the matrimonial context, while courts will not allow parties to hide assets in trust to evade obligations, thoughtful future planning using Guernsey trusts can help safeguard core family assets - such as an operating business for the benefit of the broader family - from claims by a spouse against an individual beneficiary.
Tax planning
They also remain a mainstream tool for international tax planning when advised appropriately. For example, assets transferred into trust may not be subject to the settlor’s income or capital gains tax in their home jurisdiction, and Guernsey resident trustees benefit, by concession, from a full exemption from Guernsey income tax on foreign sourced income and Guernsey bank interest where the settlor and beneficiaries are not Guernsey resident. Guernsey itself has no capital gains or inheritance taxes, though local advice for the settlor and beneficiaries is essential at the outset and on an ongoing basis.
Asset protection
Asset protection is another well-established use case. Guernsey law will not permit an insolvent debtor, or one rendered insolvent by a transfer made with the intention of defeating creditors, to escape existing liabilities by settling assets into trust. But where there are no relevant actual, future or contingent creditors at settlement, a Guernsey trust should protect trust assets from subsequent creditor claims against the settlor (and likely against beneficiaries). Trusts can also mitigate political risk for those in unstable jurisdictions by relocating assets to a stable environment with credible courts and regulation. Guernsey’s independent legal tradition dating back more than 800 years, political stability, experienced financial services industry and confidentiality laws together provide that foundation, while the island continues to lead in international standards to combat money laundering and tax evasion.
Commercial uses
Beyond private wealth, Guernsey trusts are widely used in commercial contexts. Purpose trusts are prevalent in real estate and structured finance transactions, unit trusts are common in collective investment structures and trusts are a tried-and-tested vehicle for pensions, employee benefit trusts and share option schemes. This versatility, underpinned by a modern statute and pragmatic regulation, is why Guernsey remains a jurisdiction of choice for trust-centred solutions.
Conclusion
To conclude: trusts have a long track record as effective, adaptable wealth preservation tools and Guernsey’s regime combines flexibility with regulatory maturity. With the right local legal and tax advice, a Guernsey trust can be a practical, durable component of global family and corporate planning.
