Probate and Estate Administration: the Practicalities of Dealing with Cayman Assets After Death (Non-Cayman Domiciliaries)

When a non-Cayman domiciliary dies owning Cayman Islands assets, the heirs want to access those assets as quickly and efficiently as possible. This Briefing Note deals with the practical steps involved. Reference should be made to the separate Briefing Note, entitled "Succession and Estate Administration in the Cayman Islands (non-domiciled individuals)" for an understanding of the conflict of laws issues that may arise on death. Those issues need to be resolved before the practical steps can be taken to deal with an estate.

It should be borne in mind that any assets held by a Cayman Islands incorporated company are classed, for this purpose, as Cayman Islands situated property (with some possible additional complications where a Cayman Islands company owns immovable property elsewhere in the world). It should also be borne in mind that if assets were transferred, prior to death, into a Cayman Islands Trust, it is unlikely that the following processes will be needed.

The Main Scenarios

There are 4 distinct scenarios that are commonly encountered in dealing with the Cayman Islands estate of a non-Cayman domiciliary. They are:

1. The deceased dies without a Will anywhere in the world - he is said to be fully intestate

2. The deceased dies with a foreign Will which is admitted to "Probate" overseas, such Will covering the deceased's world-wide assets

3. The deceased dies with a foreign Will in a non-probate jurisdiction, such Will covering the deceased's world-wide assets

4. The deceased died with several Wills in different jurisdictions (one of which may or may not have been the Cayman Islands)

Each of these scenarios requires a different process to be following in order to gain access to the Cayman Islands assets.  We will consider these situations in turn, below.

The deceased dies without a Will anywhere in the world

If the deceased dies without a Will anywhere in the world, he is said to die intestate.  In order to obtain access to his Cayman Islands assets a person (known as an "Administrator") will need to obtain a Grant of Letters of Administration from the Cayman Islands Probate Court in order to obtain legal title to the Cayman Islands assets. Cayman Islands banks and other asset holders will require a certified copy of a Cayman Islands Grant of Letters of Administration before they will release any assets belonging to a deceased account holder.

The following documents must be lodged with the Cayman Islands Probate Court in order to obtain the Grant of Letters of Administration:

• The application for the Grant of Letters of Administration

• An affidavit of the proposed administrator, coving a number of prescribed matters

• A true copy of the death certificate:  This must be certified as a true copy by the issuing authority

• If the death certificate is not in English, an official translation of it will be needed before a Grant can issue in the Cayman Islands

• An affidavit of law provided by a lawyer qualified in the jurisdiction of the deceased's domicile at the time of death

• A bond of surety given by a third party.  This bond is usually for an amount double the value of the Cayman Islands estate

• A letter of authorisation, permitting a Cayman Islands Attorney at Law to deal with the extraction of the Grant of Letters of Administration on behalf of the person entitled to the Grant

• If the application for a Grant is made more than 6 months after the date of death of the deceased, an additional application for "Special Leave" is required

Within one year of the issue of the Grant of Letters of Administration, an Inventory of the Cayman Islands estate must be lodged with the Cayman Islands Probate Courts.

Where a non-Cayman domiciliary dies, leaving Cayman Islands situated assets, a distinction is drawn between the movable and immovable assets of that person. Succession to movables (broadly anything except land) is governed by the laws of the last domicile of the deceased. So, in this case, the fact that the movable property is in the Cayman Islands does not prevent foreign law from applying to the passing of that property on death. This will include the application of forced heirship rules where the deceased dies domiciled in a country which has forced heirship provisions.

In the case of immovable property (essentially land and buildings) the Cayman Islands will apply the law of the place where the immovable property is situated (so, in this case, the Cayman Islands law). The law, in this case, sets out a list of the people who will benefit from the estate, and the proportions in which they will do so. This starts with spouse and children, and moves out to more distant relatives if there is no one qualifying in any given category.

If the deceased died intestate in another Probate jurisdiction, it is possible for the Grant of Letters of Administration which issued in that other jurisdiction to be resealed in the Cayman Islands Courts. This process is similar to that outlined in the next section.

In summary a full intestacy can give rise to a curious result regarding the Cayman Islands estate; that part passes under the laws of the deceased's domicile at death and part passes under the laws of the Cayman Islands. In most cases, this is not the desired result and so the need for a Will (and/or a lifetime trust) is clear.

The deceased dies with a foreign Will which is admitted to "Probate" overseas

Perhaps the simplest scenario is where the deceased leaves a foreign Will. That foreign Will is written in English and is admitted to Probate in a probate jurisdiction. At present, more foreign Grants are resealed in the Cayman Islands Courts than new Grants are issued each year.

Section 23 of the Succession Law allows the resealing of a Grant made by a Court of Probate in "any part of Her Majesty's dominions, or in any foreign country, or a British court in a foreign country". Once a foreign Grant has been resealed, it has the same effect in the Cayman Islands as if it had been originally granted here.

In order to reseal a Grant of Probate issued overseas, it is necessary to submit the original overseas Grant of Probate (or a certified copy of it) to the Cayman Islands Probate Court. The judge dealing with the application may (at his discretion) require the application for resealing to be advertised, and may require the application to be supported by an oath sworn by the applicant (dealing with certain prescribed matters). In any event, the process is generally more straightforward than obtaining a new Grant in the Cayman Islands.

If an affidavit is required, it will include details of the total value of the Cayman Islands situated assets and proof of the assets to which the reseal will apply. With a bank account this will be either a copy of the latest statement on the account or it will take the form of a letter from the bank evidencing the account and confirming the balance at that time.

Once the Grant is resealed by the Cayman Islands Probate Court, the Court will notify the foreign Probate Court of the reseal. The resealed Grant can then be used to access the Cayman Islands situated assets, which must be distributed by the executors in accordance with the terms of the foreign Will.

An Inventory of the Cayman Islands estate is still required to be submitted to the Cayman Islands Court, within a period fixed by that Court. In many cases, this information is provided at the time of making the application.  Where the Grant is being resealed with a view to accessing a single Cayman Islands asset, the Inventory can be included in the affidavit itself.

An account of the Cayman Islands estate must be filed within 12 months of the reseal of the Grant.

Resealing also applies where the original Grant was a Grant of Letters of Administration, extracted in a Probate jurisdiction on an intestate death.

The deceased dies with a foreign Will in a non-probate jurisdiction

In other cases, the deceased may leave a Will which is perfectly valid in the jurisdiction of his last domicile, but which cannot be admitted to Probate elsewhere, as it the deceased died outside of a Probate jurisdiction.

In those cases, the Will is still going to be valid to govern the distribution of the Cayman Islands situated assets and the Cayman Islands Courts will still be able to issue a Grant of Probate of the foreign Will.

Rule 37 of the Probate and Administration Rules provides that a Cayman Islands Grant of Probate can be issued to:

1. The person entrusted with the administration of the estate by a court having jurisdiction at the place where the deceased died domiciled;

2. To the person who is beneficially entitled to the estate under the laws of the deceased's last domicile; or

3. To such other person as the judge considers appropriate

These points apply in order of priority so that a Grant shall issue to a person falling within 1 and, failing that, to a person within 2, and so on.  Before Rule 37 was introduced, the process was considerably more complicated.

In order for the Cayman Islands Probate Court to be satisfied of the validity of the overseas Will (and to gain an understanding of the law that applies in that jurisdiction) they may seek, in the form of an affidavit, a statement of the foreign law from a practitioner of that law and its application to the present case. This statement will need to cover the often complicated issue of conflicts of law.

The requirements here are similar to those which apply to an intestacy (set out above). The main differences are the requirement for the overseas statement of law, and the need to submit a copy of the Will as part of the application. If the Will is not in English, an official translation of it will be needed before a Grant can issue in the Cayman Islands.

The deceased died with several Wills in different jurisdictions (one of which may or may not have been the Cayman Islands)

This final case presents the most possible permutations. However, the general requirement will be to determine, by applying the appropriate conflict of law rules, which of several Wills covers the Cayman Islands situated assets. At that stage, the process will be as above; if the Will in question is capable of being admitted to Probate elsewhere, that Grant can be resealed in the Cayman Islands Probate Court.

If the relevant Will is not capable of being admitted to Probate elsewhere, a Grant of Probate will need to be issued in the Cayman Islands. This follows the process set out above (under the heading "The deceased dies with a foreign Will in a non-probate jurisdiction"). Matters can get complicated where several seemingly valid wills are left and it is extremely important to determine whether one Will inadvertently revokes another, or whether any two Wills purport to deal with the same property, in different ways.

Conclusion

At Ogier, our Trusts and Estates specialists (all of whom are members of the Society of Trust and Estate Practitioners) can assist with the process of extracting the appropriate Grant within the Cayman Islands, or resealing a foreign Grant where that is an option.

A failure to get to grips with the complications of the conflict of laws rules can make the Estate Administration process extremely difficult and time-consuming. By using specialists, who are familiar with the local and international rules, this difficulty can be reduced. Our experience means that we are able to unlock the assets of an estate much more quickly than those who proceed without the assistance of a Cayman Islands Attorney.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice