THE Scottish Law Commission has outlined detailed plans to overhaul the country's antiquated trust law.
The body, which advises on legal reform, believes existing legislation, last reviewed in the 1920s, is unfit for purpose to regulate the more than £500 billion held in trust north of the border.
Its proposed tidying up of the law - packaging it in a single statute and turning Victorian legalese into modern English - will clarify the rights and duties of trustees, from the executors of wills to the executives of pension funds. It will also clarify exactly what a breach of trust is in Scots Law.
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The SLC, however, also proposes introducing so-called private purpose trusts, special vehicles that can be used to hold assets in trust for a variety of family and philanthropic reasons above and beyond the charitable and public trusts that currently exist.
This innovation - such instruments do not exist in England and Wales - should help Scotland compete for trust business with offshore markets in the Caribbean and Channel Islands
Commission chairman Lord Pentland, former Conservative Solicitor-General Paul Cullen, saidsaid: "Trusts are used nowadays by a very wide range of people and organisations for a great variety of different purposes.
"They are common in wills, and pension funds and other investments are often held in trust. In addition, the commercial world depends on trusts as a flexible and effective means of doing business. This is particularly important for the financial services sector. Trusts are important also for families and companies."
Any final changes to the law will be a matter for the Scottish Parliament.