¶ 1201
Overview
Scope of the chapter. A Belize trust is a long-term arrangement, and the instrument that creates it must anticipate change. Families move, beneficiaries are born and die, tax and regulatory regimes shift, and the law of Belize itself may be amended. This chapter examines the rules of the Trusts Act, Cap. 202, that govern how long a Belize trust may last, how its terms may be changed, how it may move into or out of Belize and how it ends. It takes the subjects in the order in which a practitioner meets them over the life of a trust: duration and accumulation (¶¶ 1210–1220); variation under the terms of the trust and by the court (¶¶ 1230–1240); change of governing law and migration in either direction (¶¶ 1250–1270); and decanting, resettlement and termination (¶ 1280). Paragraph 1290 collects the drafting points, tables and checklists.
The provisions examined. The principal provisions are section 4(3) to (6) (severable aspects and change of proper law); section 6 (maximum duration and accumulation); sections 42 and 43 (powers of appointment, revocation and variation); sections 44 to 47 (failure, charitable trusts, termination, termination by beneficiaries); sections 48 and 49 (variation and approval of transactions by the court); section 58 (the court's general powers, including orders on termination); section 64(1) (the definition of an international trust, as substituted in 2023); sections 65B and 65G (registration, notification of variation and termination, cancellation and striking off); and section 66 (application of the Act and the time at which a trust is created). Trusts Act, Cap. 202, ss. 4, 6, 42–49, 58, 64–66 (rev. ed. 2020), as amended by Trusts (Amendment) Act, 2023, No. 40 of 2023 (Belize).
Relationship to other chapters. Chapter 4 introduced the change of proper law as a conflict-of-laws question and stated the better reading of section 7(6) for a trust that migrates into Belize (see supra ¶ 420.07). Chapter 6 examined the definition of an international trust and the consequences of failing to register or of losing international status (see supra ¶¶ 650.09, 660.05, 660.10). Chapter 8 examined termination by the beneficiaries under section 47 (see supra ¶ 860). Chapter 9 examined flight clauses as powers held by a protector or trustee, and the use made of them in American courts (see supra ¶ 950). This chapter assumes those discussions and concentrates on the Belize rules that govern each change and on the planning that makes a change effective. Section 7 is examined in full in chapter 11 (see supra ch. 11), and its application to fraudulent-transfer claims in chapter 23 (see infra ch. 23).
Three themes. Three themes recur. The first is that a Belize trust's protective value depends on its continuing status as a duly registered international trust governed by Belize law, so that every change must be tested against section 7(6), section 64(1) and section 65B(7). The second is the distinction between varying an existing trust and creating a new one. The distinction decides whether a change attracts the rules that apply to a new settlement, under Belize law, under the law of the jurisdiction the trust leaves, and under the tax law of the settlor's and beneficiaries' home countries. The third is timing. A change made in calm conditions, for reasons recorded at the time, stands on a different footing from a change made after a creditor has appeared, and the American decisions show that a court hostile to the change will examine when and why it was made (see supra ¶ 950.04; infra ¶ 1260.08).
A note on terms. This chapter uses "migration" for the whole process by which a trust moves from one legal system to another, which usually combines a change of trustee, a change of the place of administration and a change of proper law. It uses "change of proper law" for the legal act, under section 4(4), by which the law governing the trust or a severable aspect is replaced. It uses "decanting" for the exercise of a power to appoint trust property to the trustees of another trust, and "resettlement" for a transaction that, on the test discussed in ¶ 1240.06, creates a new and separate settlement.