A grant of representation must be obtained in order legally to act in
regard to a deceased person’s assets in the Cayman Islands and a
variety of issues can arise in this process. This article outlines the
steps required to make such applications, shedding light on what can
sometimes be an unfamiliar area of the law.
A Brazilian citizen (we will call him Carlos) decided to establish a
trust in the name of his favourite niece, Catina, so that he did not
have to make an outright gift to her and he could ensure that the funds
were invested wisely for years to come.
Quirky and unusual assets and liabilities such as a part interest in
on-going litigation, an investment marked at zero that may eventually
come good are just some of the less straightforward residual investments
that advisers often find themselves frustrated by when a fund has run its
The recent English High Court decision in Kell v Jones1 brings
sharply into focus the contrasting jurisdictions which have developed in
England in relation to rectification of wills on the one hand and
rectification of other documents, such as trust deeds, on the other.
An individual or company invited to become a trustee will be
concerned to ensure that the trust deed provides adequate limitation of,
and protection against, liabilities incurred during the trusteeship and
that such limitation and protection continue after the trusteeship
comes to an end for whatever reason.
The use of alternative dispute resolution (ADR) in the Cayman Islands is
gaining momentum. In 2011 the Cayman Islands Association of Mediators
and Arbitrators (CIAMA) was established. Its stated aim being “to
facilitate the development…of mediation and arbitration as forms of
dispute resolution and to create a focal point for the promotion of such
The relationship between trustee and stakeholder is one that evolves and grows over time. It has many nuances and is more intimate than a typical service provider/stakeholder relationship.
The Cayman Islands led the way in 1987 when it passed the Trusts (Foreign Element) Law, later consolidated with other parts of Cayman Islands’ trusts statute to become Part VII of what is now the Trusts Law (2011 Revision). This has become known as the Cayman Islands’ ‘firewall legislation’.
By now most of the offshore financial industry has become painfully
aware of the new onerous reporting and withholding tax requirements
implemented by the Foreign Account Tax Compliance Act.
The Cayman Islands case of TMSF v Merrill Lynch1 decided recently by
the Privy Council made waves in the law of receivership and represented a
potential turning point in the creation of reserved powers trusts.
A trust instrument may provide a trustee with the power to adapt a trust
structure to changing circumstances, thus ensuring that it does not
fall out of step with convention, with beneficiaries’ circumstances or
with changes in the law but sometimes it does not.
In June 2011 I spent a few days at the Bermuda captive
conference. It was a very well done affair.
focus and pressure on trustees from regulatory bodies and stakeholders
(beneficiaries, settlors, protectors and other interested parties) has never
financial institutions and trust companies in the Cayman Islands serve
as the trustee of trusts in which at least one settlor or a current or
future beneficiary is a United States person.
Ironically, the concept of philanthropic giving may, in some cases make its
benefactor more wealthy, if he or she so wishes, thus distinguishing
philanthropy, which may or may not yield a profit, from purely charitable
activities which are strictly not-for-profit.
The facts of In Re D
were this: Mrs D had lost capacity and as a consequence, a committee of
guardians had been appointed by the Grand Court to look after her interest as primary beneficiary of a Cayman
Islands family trust.
In the first two parts of this three part
series, we reviewed some of the common issues to which trustees of Cayman
Islands trusts have been exposed as a result of instability in the global
economy since 2008.
While 2009 appeared to be dominated by restructuring work and problem
solving, by most accounts private client practitioners in the Cayman
Islands are busier setting up new trusts and fielding fresh inquiries.
For those in the business of holding and managing private wealth,
turbulence like we experienced in 2009 is the ultimate “stress test” for
trusts. Weaknesses become apparent in existing structures, often
requiring the structure itself to be amended. Investments perform badly
and beneficiaries look for someone to blame. Tensions within the family
or between various branches of the family become more acute.
The international private client community has observed a noticeable
rise in popularity of both Private Trust Company (PTC) and Restricted
Trust Licence Company (RTC) structures in Cayman over recent years.
“I’m sorry, Double-Oh, it’s completely out of my hands” she said, avoiding eye contact and nervously shuffling the papers on her desk. “You may have thought that taking out the entire Owner’s Box at the European Cup Final disguised as an assistant referee was a clever thing to do...