The Special Trusts (Alternative Regime) Law, commonly known as STAR, is a unique piece of Cayman legislation that revolutionized offshore trust planning.
What makes a STAR Trust different?
Under traditional common law, a trust must have beneficiaries who hold the equitable right to enforce the trust against the trustee. A STAR trust severs this connection. It can be created for persons, for purposes (charitable or non-charitable), or a mix of both.
Crucially, beneficiaries of a STAR trust possess no standing to enforce the trust or request information from the trustee. Enforcement rights are vested exclusively in an "Enforcer" appointed by the trust instrument.
Primary Use Cases
- Dynastic Planning: Preventing litigation by restricting beneficiary access to trust accounts.
- SPV Orphan Structures: Holding shares in an off-balance-sheet Special Purpose Vehicle for structured finance transactions.
- Philanthropy: Pursuing non-charitable purposes (e.g., funding a specific political think tank or family business legacy) that would fail under traditional trust law.
| Feature | Traditional Trust | STAR Trust |
|---|---|---|
| Enforcement | Beneficiaries | Appointed Enforcer |
| Purpose | Benefit of persons/charity | Any lawful purpose |
| Information Rights | Strong (Saunders v Vautier) | None (unless granted) |