What property constitutes an individual’s estate for succession purposes?
All property, whether owned under law or equity, constitutes an individual’s estate for succession purposes. Certain assets, such as real property held jointly, do not pass to an individual’s estate, but rather transfer to the joint surviving owner upon death.
Cayman Islands law follows English law, with two types of co-ownership:
- Joint tenancy: the co-owners hold an indivisible share of the property. On the death of a joint tenant, the property vests in the surviving joint tenant or tenants by operation of law and does not form part of his or her estate on death.
- Tenancy in common: the co-owners own separate and identifiable shares in the property and, on death, each share of the property forms part of the relevant deceased co-owner’s estate (and passes under the terms of his or her will or the intestacy rules).
To what extent do individuals have freedom of disposition over their estate during their lifetime?
The Cayman Islands allows persons complete freedom of testamentary disposition over their estate during their lifetime, provided that the assets are not encumbered by any legal or equitable co-ownership or other interests. There is no community of property regime.
To what extent do individuals have freedom of disposition over their estate on death?
The Cayman Islands maintains complete freedom of disposition of estates upon death and there are no forced heirship rules. Furthermore, pursuant to Part VII (Trusts-Foreign Element) of the Trusts Act (2021 Revision) – known as the firewall legislation – Cayman Islands law prevails over the law of the settlor’s jurisdiction governing forced heirship or non-recognition of trust structures.
Trusts governed by the laws of the Cayman Islands or dispositions of property held on these trusts cannot be held void, voidable, liable to be set aside or defective, nor can the capacity of any settlor be questioned, nor is the trustee, any beneficiary or other person to be subjected to any liability or deprived of any right, by reason that:
- the laws of any foreign jurisdiction prohibit or do not recognise the concept of a trust;
- the trust or disposition avoids or defeats rights, claims or interests conferred by foreign law on any person because of a personal relationship to the settlor or any beneficiary (whether discretionary or otherwise), or by way of heirship rights; or
- the trust or disposition contravenes any rule of foreign law, or any foreign judicial or administrative order or action that recognises, protects or enforces such rights, claims or interests.
If an individual dies in your jurisdiction without leaving valid instructions for the disposition of the estate, to whom does the estate pass and in what shares?
When a person domiciled in the Cayman Islands dies without leaving a valid will, their estate will pass to family relatives in accordance with a fixed order of priority set out in the Succession Act (2021 Revision).
Where the deceased is survived by a spouse or civil partner, the spouse or civil partner has an absolute entitlement to all personal chattels and a portion of the residuary estate, as follows:
- 100 per cent where the deceased leaves no surviving issue or parents;
- 75 per cent where the deceased is survived by parents but no issue, with the remaining 25 per cent passing to the parents; and
- 50 per cent (or CI$20,000, whichever is the greater) where the deceased leaves issue, with the remainder held on trust in equal shares for the deceased’s issue until they reach 18 years of age or marry.
Where there is no surviving spouse or civil partner, the estate will pass absolutely to the deceased’s issue, if any. Where there is neither a surviving spouse, civil partner nor issue, the estate will pass absolutely to any surviving parents in equal shares. Where there is no surviving spouse or civil partner, issue or parents, the legislation provides an order of priority consisting of full siblings, half-siblings, grandparents, uncles and aunts.
Where there are no relatives within any of the specified categories, the deceased’s estate will pass to the Crown, which has discretion to provide for any persons for whom the deceased might reasonably have been expected to make provision.Adopted and illegitimate children
In relation to the disposition of an individual’s estate, are adopted or illegitimate children treated the same as natural legitimate children and, if not, how may they inherit?
Pursuant to the Status of Children Act (2003 Revision), it does not matter whether a child is born inside or outside of marriage. Where an adoption order has been made pursuant to the Adoption of Children Act (2021 Revision) (or under the laws of any other jurisdiction), the child is the child of the adoptive parents as if they were his or her natural parents. Unless a contrary intention appears in the will of the deceased, both illegitimate and adopted children shall be treated as though they were natural children.Distribution
What law governs the distribution of an individual’s estate and does this depend on the type of property within it?
The distribution of real property is governed by lex situs and all other property is governed by lex domicilii.Formalities
What formalities are required for an individual to make a valid will in your jurisdiction?
The requirements of a valid will are provided for under the Wills Act (2021 Revision). To create a valid will, a testator must possess the requisite testamentary and mental capacity to understand and approve the contents of the will, and have been free from undue influence. A will must be in written form and signed by the testator in the presence of two attesting witnesses.Foreign wills
Are foreign wills recognised in your jurisdiction and how is this achieved?
A will is admissible to be resealed for proof by the Grand Court of the Cayman Islands if it has been accepted by the country of domicile as a valid testamentary document and if it is executed in accordance with the law of the Cayman Islands.
In addition, the Formal Validity of Wills (Persons Dying Abroad) Act (2018 Revision) allows persons domiciled outside of the Cayman Islands to execute a valid foreign will dealing with moveable Caymanian property. Under this law, such a will must meet the formalities prescribed for Caymanian law wills to dispose of immovable Cayman Islands property. This law removed previous restrictions making it cumbersome to deal with a deceased's assets in the Cayman Islands and is important because it allows people who own shares in Cayman companies, or who have interests in Cayman Islands investment funds, to more easily dispose of their interests upon death, even if they die domiciled outside of the Cayman Islands.Administration
Who has the right to administer an estate?
Where probate is granted for a will that names an executor of the estate, the Grand Court will appoint that person as the representative of the estate.
Where a will is admitted to probate but no executor is named, the Grant Court may appoint a person to be administrator of the estate pursuant to Rule 32 of the Probate and Administration Rules (2008 Revision).
Where the deceased died wholly intestate, the Grand Court may appoint an administrator pursuant to Rule 33 of the Probate and Administration Rules (2008 Revision). The order of priority of entitlement in relation to estates of persons dying domiciled outside the Cayman Islands is set out in Rule 37.
How does title to a deceased’s assets pass to the heirs and successors? What are the rules for administration of the estate?
Once a grant of probate has been issued to the estate representatives, they are entitled, and indeed required, to gather and take control of the assets of the deceased person and have them transferred into the names of the executors or directly to a person who is ultimately entitled to the same under the terms of the relevant will.
In the absence of leave of the Grand Court, no grant of probate or letters of administration with the will annexed can be issued within 21 days of the death of the deceased and no grant of letters of administration can be issued within 28 days of the death of the deceased. The grant must be obtained within six months of death (or within two months of the termination of any dispute concerning the right to a grant) unless special leave of the Grand Court is obtained. Special leave is ordinarily given where a reasonable explanation for the delay is provided, subject to any objections of those entitled under the estate. There is no time limit for an application for the resealing of a foreign grant.
An estate must be administered within one year of the date of the grant of probate, unless the Grand Court has granted an extension for the submission of the final accounting of the estate.Challenge
Is there a procedure for disappointed heirs and/or beneficiaries to make a claim against an estate?
The validity of a will and the identity of the applicant for probate can be challenged at the appropriate time during the application for probate. A beneficiary under a will or the rules of intestacy can also apply to the Grand Court to challenge the manner of administration of the estate. However, the administration cannot be challenged on the basis that no adequate provision was made for dependants of the deceased or otherwise (as is possible in other jurisdictions).