Cayman Islands

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Cayman Islandsafforded to them by Section 44 of the Trusts Law (2011 Revision) by advertising forcreditors in the manner specified in the statutory provision and waiting for the relevantperiod to expire before distributing the estate.Foreign grants of representation similar to those issued by the Cayman Islands’Court may be resealed by the Cayman Islands’ Court. For such purposes, it is necessaryto lodge a court-certified copy of the grant and an affidavit of foreign law. Once resealed,the grant will be valid under Cayman Islands’ law.WillsWhile it is not essential for persons owning Cayman Islands’ assets to make a will, it isadvisable, as a will allows them to select their personal representatives and determine theidentity of the recipients of their property after their death and the terms on which theyreceive it.For a will to be valid under Cayman law:a the will must be in writing;b the will must be signed at the foot or end by the testator or by some other personin his presence and at his direction;c the testator’s signature must be made or acknowledged by him in the presence ofat least two witnesses who must be present at the same time; andd these witnesses must also attest and subscribe the will in the presence of thetestator.According to English principles of private international law, which apply in the CaymanIslands, Cayman Islands’ domestic law only applies to the extent that a will disposes of:a moveable property if the testator died domiciled in the Cayman Islands; orb immoveable property in the Cayman Islands.IntestacyThe rules of intestacy specifying the order of entitlement to the residuary estate of anintestate are contained in the Cayman Islands’ Succession Law (2006 Revision) whichapplies to estates of deceased persons dying domiciled in the Cayman Islands and toforeign domiciliaries only insofar as the estate relates to immoveable property in theCayman Islands.IVWEALTH STRUCTURING AND REGULATIONTrusts are recognised in the Cayman Islands and are commonly used for internationalwealth structuring purposes. They may be set up by persons in any part of the worldwith property or investments in any part of the world and in any currency. There is nolimit on accumulating the income from the corpus of the trust for up to the length of theperiod of the trust.i Sources of law and interesting features of Cayman Islands’ trust legislationThe main sources of trust law for trust creation and administration purposes can be foundin the Trusts Law, which was originally passed in 1967 as a consolidating statute and hasprovisions broadly similar to those contained in the English Trustee Act 1925 and the86
Cayman IslandsEnglish Variation of Trusts Act 1958. The Trust Law is the main source of legislationgoverning the creation and administration of trusts.ii Legal treatment of a trustCayman Islands’ trusts adopt the common law concept of a trust, whereby a trustee,being the legal owner of the assets under a trust, holds the assets beneficially for thebeneficiaries of the trust. A Cayman Islands’ trust does not have a separate legal personality.It therefore follows that a trust in the Cayman Islands does not have residence, althoughthe trustees of it may do so.iii International structuring considerations – provisions to address conflict of lawissuesThe Hague Convention on the Law Applicable to Trusts and on their Recognition1985 (‘Hague Trusts Convention’) has not been extended to the Cayman Islands.However, there is nothing in the Trusts Law that would prevent most types of commonlyinternationally recognised trusts as being recognised in the Cayman Islands.Trusts foreign element provisionsPart VII of the Trust Law (Sections 87–94), commonly referred to as the Trusts –Foreign Element Provisions, provides a clear and user-friendly framework to address theunderlying conflict of law that might otherwise arise in the creation of a cross-borderwealth structure.Section 89 makes it clear that parties may freely elect the governing law of a trustby express provision in the trust instrument. The legislation provides that regard willbe given to the terms of the trust and any evidence as to the intention of the partieswhen determining the governing law of a trust. This is consistent with the Hague TrustsConvention, which allows for trust instruments expressly to designate the proper lawof a trust. If the trust instrument expressly states that the laws of the Cayman Islandsare to govern the trust, that term will be effective and conclusive regardless of anyother circumstance. By the same token, if a trust instrument expressly provides thata jurisdiction other than the Cayman Islands is to govern the trust, the Courts of theCayman Islands should uphold that term.Where Cayman Islands’ law has been chosen as the governing law of the trust,Section 90 provides for the exclusion of foreign law in matters dealing with CaymanIslands’ trusts. Questions that arise in relation to a trust governed by Cayman Islands’ lawand to any disposition of property upon a trust governed by Cayman Islands’ law will,subject to certain exceptions, be decided as a matter of the Cayman Islands’ domesticlaw without any reference to the laws of any other jurisdiction with which the trust ordisposition may be connected. These include issues concerning:a the capacity of the settlor;b any aspect of the validity of the trust or disposition or interpretation or effectthereof;c the administration of the trust, whether the administration can be conductedin the Cayman Islands or elsewhere, including questions as to the powers,87
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Cayman Islands

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