Coverdale acts as a trustee for trusts that are governed by BVI law, including the BVI’s unique VISTA Trusts. The Virgin Islands Special Trusts Act (“VISTA”) was first enacted in 2003 and subsequently amended in 2013. The VISTA trust is something unique to the British Virgin Islands and they have become very popular since they were introduced.
A traditional trust places a fiduciary duty on the trustee to ensure that the trust assets are protected and enhanced during the life of the trust. Generally, the trust assets are invested through a BVI company and this means that the trustees take control of the company so that they can oversee the management of the assets and ensure that they adhere to the “prudent investor rule”.
This rule and its application make the trustees act very conservatively during their stewardship of the trust assets. The resulting vigilance by the trustee can also incur additional costs in both time and money.
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The VISTA trust – a trust created and subject to the Virgin Islands Special Trusts Act 2003 as amended – is a modern form of trust for holding shares in companies where it is intended that:
a) the shares will be held indefinitely; and
b) the trustee is not intended, other than in special and defined circumstances, to intervene in the conduct of the affairs of the underlying company or companies.
Normally a trustee must act as a “prudent investor” in respect of shares it holds in a company. This will require the trustee to monitor the company’s management and performance. It may also require the trustee to sell the shares to maximise the financial advantage of the trust assets or diversify risk. These trustee duties can easily conflict with the interests of ‘family’ trading and investment companies.
VISTA removes these conflicts and problems by enabling clients to create VISTA trusts under whose terms the trustees have no duties to interfere in the management of the company or realise the latent value of the shares.