The Cayman Islands Wills Law (2020 Revision) (the “Law”) allows persons to freely dispose of their assets on their death by a Will executed in accordance with the Law. This principle of testamentary freedom is discussed further below in addition to possible benefits to executing a Will.
Some jurisdictions have forced heirship or community property regimes or other laws in place that dictate in whole or in part to whom a person’s property is to be distributed on their death. The Cayman Islands, however, follows the principle of testamentary freedom and allows individuals to fully provide through their Will who they want (or don’t want) to inherit their estate where they are domiciled in the Cayman Islands or hold immovable property (such as land) on the Islands. Testators can provide for distributions to family members, friends, charities or other entities under a Will as they see fit.
Other potential benefits to executing a Will are:
- A testator can decide who will be the guardian of his or her minor children. Without a Will, the Court will decide who will be guardian of one’s minor children assuming that there is no one with parental responsibility remaining on the testator’s death. With a Will, a person can choose exactly who will be guardian of his or her children.
- A testator can minimize the process needed to administer ones estate. An application for probate is generally more straightforward and less time consuming than an application for letters of administration (the process where a person dies without a Will). There is generally no need for the Court to go through the process of determining who should be appointed as executor or who the beneficiaries of one’s estate will be, as that would all be provided in the Will, thus allowing a simpler and faster application process.
- A testator can decide who will be in charge of the administration of his or her estate. Executors play the most important part in administering an estate, including paying the testator’s outstanding liabilities and making the distributions directed by the testator. Having a Will allows the testator freedom to appoint the person or persons that are best trusted to administer his or her estate.
- Expressing one’s wishes. A testator may wish to express through a Will any specific burial, cremation or other post death wishes that they may have.
Where any of the above features are attractive to a person with property in the Cayman Islands, it is advisable for them to draw up a Will with a Cayman Islands attorney-at-law. Below are some of the key points for a testator to consider when contemplating drafting his or her Will:-
- Who will the executor be and will there be any substitute executor? The testator should have a discussion with a proposed executor to confirm his or her willingness to be so appointed. The testator should also discuss what the testator’s wishes would be and whether the executor has any questions in relation to them. The testator should consider identifying a substitute executor in the event that the testator’s proposed executor is unable or unwilling to act.
- Who will the guardian of minor children be? Assuming guardianship of a child is a major responsibility. To ensure that a proposed guardian is best suited to the role, the testator should have a discussion with them to confirm their willingness to be appointed as guardian and any concerns relating to the appointment.
- What assets does the person have? How are they held? Where are they located? Testators need not only consider what assets they hold but how they are held. This is a point sometimes overlooked by would-be testators. For example, property held by the testator may have a charge over it limiting the testator’s ability to dispose of it. Alternatively, the property may be held jointly so that it automatically becomes the property of the surviving joint owner by operation of law. Other complexities can arise where the testator is not domiciled in the Cayman Islands or where property is not situated in the Cayman Islands. Testators are best advised to consider such matters with their attorney to ensure the smoothest possible handling of their estate.
- Who are the Beneficiaries? One needs to consider who the beneficiaries will be and whether there will be any specific gifts to particular persons. One also needs to consider how the residuary estate is to be held and distributed (e.g. in equal shares, with any age contingency). If property is subject to a liability (e.g. a mortgage) and is to be given as a specific legacy, it should be confirmed how that liability will be settled (e.g. from that asset or from other assets within the estate).
Once the testator executes a Will, he or she will need to decide where the Will is to be held. The executor and any suitable beneficiary should know where the Will is located so it can easily be retrieved on the testator’s death. The testator should also regularly update a list of his or her assets and give the executor a copy. When the testator’s assets change, he or she should consider whether an update to the Will is necessary.
Similarly, if there is a change in circumstances of the testator or of any of the beneficiaries (e.g. a marriage, divorce, separation, death of a beneficiary, birth of a child), a new Will or codicil (being an instrument that adds to or amends ones Will) should be considered. Where a testator marries any Will made prior to the marriage is generally automatically revoked under the Law.
Having a Will allows a person the best opportunity to direct the management and the distribution of his or her assets on death. A Will also generally aids in a smoother and timelier administration of an estate. The Wills Law requires certain formalities be followed to validly execute a Cayman Islands Will. One should consult with a Cayman Islands attorney-at-law to ensure that their Cayman Islands Will is validly executed and meets their objectives.
About the Author
Wendy Stenning is a senior associate in the firm’s private client and wealth management group in the Cayman Islands. She has significant experience advising trust companies and high net worth individuals on the establishment and ongoing administration of a variety of trusts.
The information contained in this article is provided for the general interest of our readers, but is not intended to constitute legal advice. Clients and the general public are encouraged to seek specific advice on matters of concern. This article can in no way serve as a substitute in such cases. Copyright ©2020 Higgs & Johnson. All rights reserved.