Trustees: Itching To Know About Flee Clauses? – Corporate/Commercial Law – Isle of Man – Mondaq News Alerts

Isle of Man: Trustees: Itching To Know About Flee Clauses?

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What is a flee clause?

If ‘X’ trigger event happens the trust assets,
trusteeship and forum for the trust administration will
automatically be transferred to another ‘safe’
jurisdiction.

What are we fleeing from?

Example trigger events:

  • Natural disaster
  • Breakdown of law and order
  • Imposition of government control or
    new taxation rules

COVID consequences?

Does your trust have a flee clause?

Potentially emergency powers enacted into law could adversely
impact the ability of the trustees to administer the Trust Fund or
carry out their powers and duties.

Is the disruption caused by current circumstances caught by the
terms of a flee clause in the Trust Deed?

Keep calm and carry on

Flee or emergency clauses are fairly rare and largely
untested.

It will be interesting to see if any clauses do exist which
could be caught by the COVID situation and, if so, if the ‘safe’ jurisdiction is in fact itself caught.

In these uncertain times it is even more important for trustees
to review the terms of their trusts, ensure they have robust minute
and record keeping policies and review the strength of indemnity,
exoneration and anti-Bartlett provisions.

Originally published 2 June, 2020

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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