Ben Harle
Senior Associate | Legal
Cayman Islands, British Virgin Islands
Ben Harle
Senior Associate
Cayman Islands, British Virgin Islands
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Succession planning in the Cayman Islands
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Anyone holding assets in the Cayman Islands, such as company shares, investments or property, should consider preparing a will or undertaking broader succession planning in respect of those assets.
This briefing sets out the options available to protect your Cayman Islands assets and support succession planning across generations.
Jointly-held assets
As in other common law jurisdictions, assets in the Cayman Islands - such as property, bank accounts, or shares - may be held either as "joint proprietors" or as "proprietors in common":
- Joint proprietors benefit from the rule of survivorship, where the asset is passed automatically to the surviving owner(s) on death. If not carefully considered this arrangement can override the provisions of a will. It can also serve as a way of avoiding the probate process, especially if the intention is for the joint share to pass to the surviving owner(s)
- In contrast, when a share is held as proprietors in common, each person's share forms part of their estate and passes in accordance with their will, giving the individual greater control over who inherits their share.
This distinction is commonly overlooked and can have a significant impact on succession planning, so it is essential to check how assets are held.
Wills
Preparing a will that directly addresses assets held in the Cayman Islands is an important first step towards ensuring clarity and efficiency in succession planning.
For individuals domiciled in, or resident in, the Cayman Islands, a will enables the formal appointment of a legal guardian for minor children, ensuring their care is provided for should both parents die. The will (together with a letter of wishes) can also be used to leave specific gifts or communicate personal wishes.
The preparation of a Cayman Islands will requires careful attention, particularly for individuals who are not domiciled in the jurisdiction, as cross-border estate planning can present complexities when Cayman Islands law interacts with the succession laws of other countries.
This is key because, under Cayman’s private international law, the law of the country where the deceased was domiciled at the time of death usually governs the succession of "movable" assets – including shares in Cayman Islands companies. It is therefore essential to review the terms of a Cayman Islands will alongside the relevant laws of domicile to identify and resolve any potential conflicts and ensure the smooth administration of the estate.
Read more about making a will in the Cayman Islands.
Lifetime planning
Lifetime planning can provide greater certainty, flexibility and asset protection over the succession of Cayman Islands assets and can help to mitigate or avoid difficulties associated with conflicts of law, protracted probate processes, or differing tax regimes.
A range of structuring options are available in the Cayman Islands:
- Trusts are highly flexible and can be tailored for a wide range of forms, including wealth management and investments. Reserved powers provisions allow the retention of significant control over key decisions. Read more about Cayman Islands trusts
- STAR Trusts are unique to the Cayman Islands; they address many of the limitations of conventional trusts. They can be established for people, purposes (charitable and non-charitable), or both. STAR Trusts also introduce the role of an Enforcer, whose responsibility is to ensure the terms of the trust are properly enforced, thus separating the roles of ownership and oversight (and consequently limiting the power or information available to beneficiaries). Read more about STAR Trusts in the Cayman Islands
- Foundation Companies are a hybrid entity, combining characteristics of both a company and a trust, and may be particularly attractive to those who prefer familiar corporate governance frameworks. This structure can address concerns about the tax treatment of trusts particularly where existing Cayman Islands corporate entities are being repurposed. Foundation companies can also be utilised as Private Trust Companies. Read more about Foundation Companies in the Cayman Islands
Cayman law provides significant flexibility and protection in lifetime structuring. Settlors can maintain a high degree of control over trust arrangements through reserved powers. Read more about Cayman Islands Reserved Powers Trusts.
The jurisdiction was one of the first to introduce firewall legislation, which continues to protect Cayman Islands structures from the impact of foreign succession laws. In addition, the recent removal of the perpetuity period enables multi-generational succession planning for all new trusts. Read more about the Cayman Islands' amendment to perpetuities legislation.
Probate
Probate is generally not required for Cayman Islands assets that are held within the structures discussed above, as they do not form part of an individual's estate.
If an individual does hold assets directly at the time of death, Cayman law strictly requires that a grant of representation be obtained from the Grand Court before those assets can be administered or dealt with in any way. Read more about obtaining a grant of representation in the Cayman Islands.
How Ogier can help
Our Cayman Islands Estate Planning, Wills and Probate team has extensive experience in advising on Cayman law issues, from the preparation of wills and powers of attorney to applications for grants of probate and letters of administration. We are known for providing a responsive and compassionate service to clients and their advisers and for our expertise in cross-border estates where Cayman assets are involved.
For tailored advise on Cayman succession planning, contact a member of our team via their contact details below.
About Ogier
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
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
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