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10 September 2020
When a non-Cayman domiciliary dies owning Cayman assets, such as shares in a Cayman Islands company and interests in Cayman Islands funds (Cayman estate), the transmission of such Cayman estate is governed by Cayman Islands law and a grant of representation (Cayman grant) issued by the Grand Court is usually required. The registered office provider is not authorised to update the register of members or limited partnership interests without a Cayman grant. Directors and general partners should not approve share or interest transfers involving a deceased shareholder or limited partner without reviewing a Cayman grant.
This article deals with the procedures and documentation required to secure a Cayman grant for the estate of a non-Cayman domiciliary and highlights the pitfalls of which practitioners should be mindful.
A Cayman grant usually takes one of the following forms:
To apply for a grant of probate, the probate registry of the Grand Court requires the following documents:
In an application for grant, the applicant undertakes that they will:
The documents required for a grant of letters of administration with will annexed or on intestacy are largely similar to the grant of probate, except the administrator must also:
It may also be necessary to file an affidavit of a legal practitioner qualified in the jurisdiction where the deceased person is domiciled explaining, among other things, the entitlements of the heirs.
The amounts of the bond and bond of surety are set at double the sworn value of the estate to guarantee that the administrator administers the Cayman estate appropriately.
A grant of probate will generally be granted to:
In the case of letters of administration, the Probate and Administration Rules (Revised) dictate who is entitled in priority to make such applications and therefore to be granted the Cayman grant. The Grand Court may order that the Cayman grant be made to the following if it finds the circumstances to be appropriate:
The Grand Court generally takes approximately three to six months to issue a grant depending on the court schedule.
Where a deceased's will has been admitted to probate in the deceased's jurisdiction of last domicile, it may be possible to be resealed by the Grand Court.
There is no inheritance tax, death tax or estate duty in the Cayman Islands and the filing fees for grant application are payable irrespective of the value of the Cayman estate.
Applying for a Cayman grant might appear to be an easy and straightforward process. However, there are a few material pitfalls of which practitioners should be mindful when an application is being prepared.
The application should be made within six months of the death of the non-Cayman domiciliary, unless special leave for the extension of the six-month deadline, setting out the circumstances of why the application is being filed out of time, is applied for. When the Grand Court has granted the special leave, the applicant must file the full grant application within 30 days. If the applicant fails to file the full grant application within 30 days for whatever reason, a fresh application for special leave must be filed.
The undertaking made during the grant application regarding the filing of the inventory of the Cayman estate and the affidavit of general accounting are statutory obligations imposed on the personal representative. The personal representative must file these within the prescribed time limit and in a form acceptable to the Grand Court.
This article outlines the general procedure for obtaining a Cayman grant. Many practical problems can arise which can make obtaining a Cayman grant difficult. Nonetheless, the fact remains that a Cayman grant must always be obtained to legally deal with a Cayman estate. In view of the popularity of Cayman Islands companies and funds in Asia and the fact that shareholders and investors are ageing, it is crucial to work with Cayman Islands counsel who are experienced in applying for a Cayman grant in order to deal with the transmission of a Cayman estate in a cost-effective and time-efficient manner.
For further information on this topic please contact Anthony Partridge at Ogier's Grand Cayman office by telephone (+1 345 949 9876) or email (email@example.com). Alternatively, contact Wisdom Hon at Ogier's Hong Kong office by telephone (+852 3656 6000) or email (firstname.lastname@example.org). The Ogier website can be accessed at www.ogier.com.
An earlier version of this article was published in STEP Hong Kong Branch Newsletter.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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