Hong Kong Ordinances

TRUSTEE ORDINANCE - SECT 35

Protective trusts

(1) Where any income, including an annuity or other periodical income payment,
is directed to be held on protective trusts for the benefit of any person (in
this section called the principal beneficiary) for the period of his life or
for any less period, then, during the period

(in this section called the trust period) the said income shall, without
prejudice to any prior interest, be held on the following trusts, namely-

   (a)  upon trust for the principal beneficiary during the trust period or
        until he, whether before or after the termination of any prior
        interest, does or attempts to do or suffers any act or thing, or until
        any event happens, other than an advance under any statutory or
        express power, whereby, if the said income were payable during the
        trust period to the principal beneficiary absolutely during that
        period, he would be deprived of the right to receive the same or any
        part thereof, in any of which cases, as well as on the termination of
        the trust period, whichever first happens, this trust of the said
        income shall fail or determine;

   (b)  if the trust aforesaid fails or determines during the subsistence of
        the trust period, then, during the residue of that period, the said
        income shall be held upon trust for the application thereof for the
        maintenance or support, or otherwise for the benefit, of all or any
        one or more exclusively of the other or others of the following
        persons

(that is to say)- (Amended L.N. 7 of 1979)

        (i)    the principal beneficiary and his or her wife or husband, if
               any, and his or her children or more remote issue, if any; or

        (ii)   if there is no wife or husband or issue of the principal
               beneficiary in existence, the principal beneficiary and the
               persons who would, if he were actually dead, be entitled to the
               trust property or the income thereof or to the annuity fund, if
               any, or arrears of the annuity, as the case may be, as the
               trustees in their absolute discretion, without being liable to
               account for the exercise of such discretion, think fit.

(2) This section does not apply to trusts coming into operation before the
commencement of this Ordinance, and has effect subject to any variation of the
implied trusts aforesaid contained in the instrument creating the trust.

(3) Nothing in this section operates to validate any trust which would, if
contained in the instrument creating the trust, be liable to be set aside.
[cf. 1925 c. 19 s. 33 U.K.]