95. Reserved and restricted powers

(1) Without prejudice to the generality of section 37 (Variation and revocation of a Trust), the reservation by the Settlor to himself or grant to any other person in the Trust Instrument of an AIFC Trust of any limited Beneficial Interest in the Trust Property whether of Income or capital, or any or all of the powers specified in subsection 95(2) (or both such an interest and any or all of such powers) shall not:

• (a) invalidate the Trust; or
• (b) prevent the Trust taking effect according to its terms; or
• (c) cause any or all of the Trust Property, or the interests or powers reserved, to be part of the real estate or personal estate of the Settlor for any purpose.

(2) The powers referred to in subsection 95(1) are:

• (a) in the case of a reservation to the Settlor or other donor of Trust Property, power to revoke the Trusts in whole or in part;
• (b) power to vary or amend the terms of the Trust Instrument or any of the Trusts, purposes or powers arising thereunder in whole or in part;
• (c) a general, intermediate or special power to advance, appoint, pay, apply, distribute or transfer Trust Property (whether Income or capital or both) or to give directions for the making of any such advancement, appointment, payment, application, distribution or transfer;
• (d) power to act as, or give binding directions as to, the appointment or removal of, a director or an officer of any company wholly or partly owned by the Trust or to direct the Trustee as to the manner of exercising voting rights attaching to any of the shares held in such company;
• (e) power to give binding directions in connection with the purchase, retention, holding, sale or other commercial or investment dealings with Trust Property or any investment or reinvestment thereof or the exercise of any powers or rights arising from such Trust Property;
• (f) power to give binding directions that the Trustee shall not be under any duty nor be bound to interfere in the business of any company to which any such direction applies in which the Trust is interested, the manner in which the Trustee shall act in respect of exercise of any right or power arising from the ownership of the shares of such company or any loan or advance of money to such company, and the liability of the Trustee arising as a result of any such direction;
• (g) power to appoint, add, remove or replace any Trustee, Protector, Enforcer or any other office holder;
• (h) power to add, remove or exclude any Beneficiary, class of Beneficiaries or purpose;
• (i) power to change the Governing Law and the forum for administration of the Trust; and
• (j) power to restrict the exercise of any powers, discretions or functions of a Trustee by requiring that they shall only be exercisable with the consent, or at the direction of, any person specified in the Trust Instrument or any other written notice to the Trustee.

(3) A Trustee who:

• (a) has acted, or refrained from acting, in compliance with, or as a result of, a valid exercise of any of the powers set out in subsection 95(2), shall not, by reason only of such compliance, commit a Breach of Trust or other fiduciary or equitable duty; or
• (b) is or has been prevented from acting in accordance with any of the powers specified in subsection 95(2), or any exercise of those powers by reason of the provisions of any applicable law or because insufficient rights or powers are exercisable by the Trustee in relation to the Trust Property, shall not, by reason only of such non-compliance or failure to act, commit a Breach of Trust or other fiduciary or equitable duty.

(4) No person other than a person in whom Trust Property or an interest in Trust Property is vested and who is formally appointed as a Trustee, shall be or become a Trustee by reason only of the reservation or grant of any of the powers set out in subsection 95(2).

(5) The terms of an AIFC Trust may provide that the reservation or grant of any of the powers set out in subsection 95(2) shall not impose a fiduciary duty on the holder of such powers.

(6) In the absence of any contrary provision of the terms of an AIFC Trust:

• (a) in the case of the reservation by a Settlor or the grant to another person of any of the powers specified in section 95(2), where so long as the holder of the power is not the sole Trustee, such powers shall be personal and non-fiduciary; and
• (b) in any other case, such powers shall be fiduciary.

96. Expressions of wishes

(1) The Settlor of a Trust may give to the Trustee a letter of the wishes of the Settlor or the Trustee may prepare a memorandum of the wishes of the Settlor with regard to the exercise of any functions conferred on the Trustee by the terms of the Trust.

(2) A Beneficiary of a Trust may give to the Trustee a letter of the wishes of the Beneficiary or the Trustee may prepare a memorandum of the wishes of the Beneficiary with regard to the exercise of any functions conferred on the Trustee by the terms of the Trust.

(3) Where a Trust is in favour of a class of persons, then a member of that class may give to the Trustee a letter of the wishes of that member or the Trustee may prepare a memorandum of the wishes of that member with regard to the exercise of any functions conferred on the Trustee by the terms of the Trust.

(4) Where a letter of wishes or a memorandum of wishes is given to or prepared by the Trustee of a Trust then-

• (a) the Trustee may have regard to that letter or memorandum in exercising any unctions conferred upon the Trustee by the terms of the Trust; but
• (b) the Trustee shall not be bound to have regard to that letter or memorandum and shall not be accountable in any way for failure or refusal to have regard to that letter or memorandum.

(5) No fiduciary duty or obligation shall be imposed on a Trustee merely by the giving to the Trustee of a letter of wishes or the preparation by the Trustee of a memorandum of wishes.

97. Incapacitation of Protector or Settlor

(1) If the Settlor becomes incapacitated then the rights or powers (if any) reserved to him shall during his incapacitation be exercisable by the Protector (if appointed) or by any other person designated by the Trust Instrument or appointed for that purpose by the Court declaring or confirming him to be incapacitated.

(2) If the Protector becomes incapacitated then the rights or powers (if any) reserved to him shall during his incapacitation be exercisable by the person designated by the Trust Instrument or appointed for that purpose by the Court declaring or confirming him to be incapacitated.

(3) For the purpose of this section:

• (a) a person shall be deemed to be incapacitated if declared to be of unsound mind by a court of competent jurisdiction or if declared by two qualified examining physicians to be of unsound mind or physically impaired so as to be unable to act responsibly prudently or effectively and shall be deemed to remain incapacitated until declared otherwise by such court or such physicians; and
• (b) a corporation shall be deemed to be incapacitated if it has been dissolved, or if it is under administration or a petition for its winding up has been presented in any Court and has not been finally determined by the Court

(4) The Trustee may declare in writing a person to be incapacitated during any period in which the Trustee is of the opinion that such person is unable freely to exercise his rights or powers or to fulfil his duties or obligations hereunder because of duress or undue influence brought to bear on such person by any other person or persons but the Trustee shall not be under any duty to make any inquiries as to whether any person is suffering from duress or undue influence and in any case the Trustee shall not be under any duty to make any declaration as aforementioned.