Protective or Spendthrift Trusts

(1) The terms of a trust may make the interest of a (a) subject to termination; 16 (b) subject to a restriction on alienation of or dealing in that interest or any part of that interest; or (c) subject to diminution or termination in the event of the beneficiary becoming insolvent or any of his property becoming liable to seizure or sequestration for the benefit of his creditors and such a trust shall be known as protective or a spendthrift trust. (2) Where any property is directed to be held on protective or spendthrift trust for the benefit of a beneficiary, the trustee shall hold that property– (a) in trust to pay the income to the beneficiary until the interest terminates in accordance with the terms of the trust or a determining event occurs; and (b) if a determining event occurs, and while the interest of the beneficiary continues, in trust to pay the income to such of the following, and if more than one in such shares, as the trustee in his absolute discretion shall appoint– (i) the beneficiary and any spouse or child of the beneficiary; or (ii) if there is no such spouse or child, the beneficiary and the persons who would be entitled to the estate of the beneficiary if he had then died intestate and domiciled in Belize. (3) In sub-section (2), a “determining event” shall mean the occurrence of any event or any act or omission on the part of the beneficiary, other than the giving of consent to an advancement of trust property, which would result in the whole or part of the income of the beneficiary from the trust becoming payable to any person other than the beneficiary. (4) Any rule of law or public policy which prevents a settlor from establishing a protective or a spendthrift trust of which he is a beneficiary is hereby abolished.