Bermuda introduces groundbreaking trust laws

Bermuda has taken significant strides in evolving its trust legislation with the recent enactment of the Trustee Amendment Act 2025. This groundbreaking legislation establishes a robust framework for modern fiduciary practice that serves as a potential blueprint for other jurisdictions aiming for similar reforms. The Act, now in effect, enhances trustees' abilities to engage in responsible investing, allowing them to consider financial returns alongside the settlor's and beneficiaries' social and environmental priorities.

Key provisions within the legislation clarify that while trustees were already required to consider material factors affecting financial performance, they can now expressly take into account the views and values of settlors and beneficiaries regarding the trust’s wider societal impact. This development often resonates with a family’s ethical beliefs and reflects a larger trend towards responsible stewardship of wealth.

Bermuda's legislative changes also coincide with the introduction of the Benefit Entities Act 2025, which will further reinforce socially responsible practices within companies, LLCs, and limited partnerships. This Act will provide an option for entities to incorporate public benefits into their governance and decision-making, with implementation expected before year-end.

The reform initiative is the result of a collaborative effort led by Bermuda’s industry, STEP, and the Bermuda Business Development Agency (BDA). Gina Pereira TEP, of Dana Stewardship Advisory, played a vital role, stating that “Bermuda has shown real leadership in modernising its trust law to reflect the evolving needs and expectations of families, beneficiaries and society." She expressed gratitude towards her colleagues, indicating that “these reforms give trustees the clarity they need to adopt responsible investing, delivering value for beneficiaries and society.”

Bermuda's new framework stands on five key principles, focusing on the integration of non-financial factors, the importance of ethical considerations in trust investments, and the benefits of compliance with emerging regulations. These reforms aim to provide vital legal certainty for trustees, align trust management with family values, and encourage societal investment in sustainable development.

Industry experts have acknowledged the importance of these reforms. Chris Moorcroft TEP, a partner at Harbottle & Lewis, remarked, “It has been a privilege to support Bermuda’s trust industry... I congratulate Bermuda for its innovative approach and leadership.” Edward Cumming KC of XXIV Old Buildings added, “I was delighted to assist the fantastic work undertaken by the Bermuda trust industry... concerns about the matters addressed by the Trustee Amendment Act 2025 have been becoming increasingly prevalent in recent years.”

Niamh Davis, also from XXIV Old Buildings, noted her excitement at participating in this transformative process early in her career, hoping for boosted confidence among trustees regarding investments. Ben Bell, Government Affairs Manager at STEP, commented, “By embracing these reforms, Bermuda is sending a strong signal that progressive, responsible trust legislation can benefit families, trustees and society at large.”

In summary, Bermuda's new trust laws mark a substantial advancement in fiduciary practice aimed at reflecting modern ethical expectations, paving the way for global adaptation and reform in trust legislation.