Estates Conference on Thursday at the Bermuda Underwater Exploration Institute.

The conference was organised by the Bermuda branch of the Society of Trust and Estate Practitioners (STEP) and those attending heard three prominent speakers from within the industry.

Cheryl Lister, chairman of the Bermuda Monetary Authority, gave a short address and one of the topics she touched on was that of information sharing between regulators and what legislative moves are in hand to ensure this is not abused.

She said Bermuda does have to comply with certain international requirements and, of the pressure experienced to comply, she said, "Onshore jurisdictions really do hold all the cards.'' Alec Anderson, a barrister and attorney with Conyers, Dill & Pearman, gave the first talk and addressed `Common Legal Issues in Trust Administration'.

He discussed whether independent legal advice is necessary for a trust's settlor, the person making the trust, and the need for the settlor to have a clear intention to make a trust, without undue influence.

He looked at the actual moves needed for creation of a trust including ownership and transfer of the assets. When assets are transferred into a trust they are no longer the property of the settlor, but belong to the trustees.

The trustees are then charged with administering the assets according to a formal letter of wishes drawn up with the settlor.

The second speaker, Dawn Goodman of Withers in the UK, spoke about avoiding litigation. She explained the issues a trust can be legally challenged on and used the current Thyssen-Bornemisza litigation as an example. She said the main focus of this case was allegations of lack of intention to create the trust and undue influence when creating it.

She explained there are particular problems when creating a trust for non- Anglo Saxon settlors, many of whom have not fully understood the concept of a trust.

She said: "Risks with non-Anglo Saxon settlors can be reduced by them having their own lawyers present who can converse in their own language and in concepts they understand. Also procuring a letter of confirmation from this lawyer of the settlor's understanding and wishes and, if pertinent, of the spontaneity of the settlor's actions.'' She added that clear, modern English draftsmanship will help.

Industry leaders speak at STEP conference She talked about `sham' trusts and said, "It is not the trust which is a sham, but the document which purports to set out the terms of the trust which is the sham in the sense of being a cloak or device, pretence or artificial transaction.'' In the instance of having to unravel a trust on the basis of fraud she said: "If a fraudster makes a trust with the proceeds of fraud, the true settlor has not intended to create the trust and the victim of the fraud can retrieve his assets. Ensure comprehensive due diligence is carried out, including trying to ascertain whether the settled assets are the proceeds of tax evasion.'' The final speaker was Donovan Waters QC, associate counsel with Bull Housser & Tupper in Vancouver, and he spoke about Drafting the Trust Instrument -- Protectors and Enforcers.

"Protectors look after the various interests of settlors in creating the trust, even when the protector is looking out for the beneficiary's concerns.

Enforcers have the authority to compel the trustees properly to discharge their duties and exercise their powers,'' he said.

He explained that a protector's tasks may include checking up on the administration of the trust and the investment policy and practice of the trustees. There will also be tasks that require the protector to do things not asked of the trustees, such as transferring the administration to another jurisdiction and changing the governing law of the trust.

He explained: "The enforcer of a non-charitable trust takes the place of the beneficiary who in a mainland person trust, armed with remedies, would ensure that the trustee honours its obligations at law and discharges appropriately its specific duties. They are mainly a product of the 1990s. No mainland jurisdiction knows this creature at all. '' BUSINESS BUC