Private Wealth 2019 Comparisons

Last Updated January 04, 2019

Contributed By Maples and Calder

Law and Practice


Maples and Calder offer the combined experience of eight partners and associates working with trustees and private clients covering all major markets and time zones from offices in the British Virgin Islands, the Cayman Islands, Dubai, Hong Kong, London and Singapore. An outstanding knowledge of commercial trusts adds range and flexibility to the firm's private trusts advice, and vice versa. Maples and Calder's specialist areas include unit trusts, escrow arrangements, estate planning, trustee incorporation, charities, regulatory regimes, third-party claims and dispute resolution. The firm's lawyers provide practical advice on ownership and succession planning based on decades of specialisation and experience. While its diverse litigation team can help avoid or resolve disputes, should the need arise. For private clients, family businesses, charities or trustees, Maples and Calder offer clients expert advice and realistic choices when it comes to every aspect of trusts.

The Cayman Islands is made up of three islands: Grand Cayman, Cayman Brac and Little Cayman. They are located in the Western Caribbean Sea, approximately 500 miles south of Miami, Florida. The capital city, George Town, is located on the south-western shore of Grand Cayman.

The Cayman Islands is a British Overseas Territory, run as a parliamentary democracy with judicial, executive and legislative branches. The Cayman Islands has its own constitution and bill of rights. The local parliament, called the Legislative Assembly, has 18 elected members from which a Premier, Deputy Premier and Speaker are appointed.

A Governor, appointed by the Government of the United Kingdom, presides over meetings of the cabinet and has special responsibility for defence, external affairs, internal security, the police and the civil service. The Deputy Governor, who, along with the Attorney General is a non-voting ex officio member of the Legislative Assembly, is appointed by the Governor pursuant to advice from the Crown. The Governor also appoints members of the judiciary.

The Cayman Islands has a sophisticated judicial system presided over by a Chief Justice and has a number of full and part-time judges and justices of the peace, some of whom serve as lay magistrates. There are three courts: the Summary Court, Grand Court and Court of Appeal. The Grand Court, which has a dedicated Financial Services Division, has jurisdiction over all civil claims in the islands. From there, appeals lie with the Court of Appeal which sits in the islands three times a year. Final rights of appeal, in certain circumstances, lie with the Judicial Committee of the Privy Council in London.

There are no income, capital gains, corporate, wealth, withholding, estate or inheritance taxes levied in the Cayman Islands. There are import duties payable on most items brought into the country. There is stamp duty payable on the purchase of land in the islands and levied on certain documents executed within, brought into or produced before the court in the islands. Stamp duty on deeds and documents ranges from KYD15 to KYD100.

The stamp duty calculated on the purchase of property is currently 7.5% of the purchase price or the market value of the property, whichever is higher, and a property assessment may be carried out by the Lands and Survey Department to establish which is the greater. There are time limits for the payment of stamp duty on property purchases, with fines and penalties for late payment. There are stamp duty exemptions available which currently do not apply to overseas first time buyers.

The Cayman Islands is an "early adopter" of the Common Reporting Standard (CRS) and, as such, CRS regulations were issued in October 2015 and again in December 2016 to effect the implementation of the OECD Standard for Automatic Exchange of Financial Account Information. 

At the time of writing, the Cayman Islands has signed 36 bilateral tax information exchange agreements and an Inter-governmental Agreement with both the USA and the UK. It has entered into bilateral tax treaties with 27 European Union member states under which it reports savings income pursuant to the European Union Savings Directive.

The Cayman Islands has a dedicated Tax Information Authority (TIA) established in 2005 to assist in the discharge of the country's tax information exchange obligations. The TIA is the sole dedicated channel in the Cayman Islands for international co-operation on matters involving the provision of tax-related information. The TIA is a function of the Department for Tax International Tax Cooperation and has statutory responsibility under the Tax Information Law (2016 Revision). 

On 1 July 2017, the Cayman Islands' beneficial ownership register (BOR) regime came into effect. This regime requires certain Cayman Islands companies, including limited liability companies, to maintain a beneficial ownership register that records details of the individuals who ultimately own or control more than 25% of the equity interests or voting rights in that company, or have rights to appoint or remove a majority of the company directors or LLC managers, together with details of certain intermediate holding companies. Companies that are within the scope of the legislation must maintain their BOR at its Cayman Islands registered office with a licensed corporate services provider.

Cayman Islands' succession law is based upon the principle of testamentary freedom meaning that subject to a person having the necessary capacity to do so a testator or testatrix can leave his or her estate in their will to anyone that he or she wishes.

The relevant statutes in connection with succession matters are the Wills Law (2004 Revision), the Succession Law (2006 Revision) and the Probate and Administration Rules (2008 Revision). Broadly, these laws set out the practice and procedure for obtaining grants of probate, letters of administration and resealing of foreign grants, as well as the rules relating to the disposition of an intestate's estate. If a deceased dies leaving a will, the executors will apply for a grant of probate which will authorise them to get in the estate of the deceased and distribute it in accordance with the terms of the will. If a deceased dies without a will, various relatives in order of priority are entitled to take out the grant of letters of administration. There are other grants of representation available to deal with less common situations, for example, ad colligenda bona grants, if there is an urgent need for a grant to be issued or to preserve assets in the estate until such time as the person entitled to take out the grant is able to do so.

There are no "forced heirship" laws in the Cayman Islands. As stated previously, Cayman Islands succession law is based upon the principle of testamentary freedom.

When a person dies without a will, the intestacy rules provide that the surviving spouse will share the estate with the surviving children of the deceased. Closer relatives, starting with the parents of the deceased, will benefit in order of priority if no spouse or child survives the deceased.

The validity of a foreign will or lifetime gift and the administration of a deceased's estate will be determined in accordance with the laws of the deceased's domicile. The general rule in the Cayman Islands is that a child will take the domicile of his or her father, unless his or her parents were not married, in which case they take the domicile of their mother. This is called "domicile of origin".

As an adult, a person may acquire a domicile of choice which is different to the domicile of origin. Acquiring domicile of choice requires evidence of an unequivocal intention to reside permanently and indefinitely in that country, such that a person abandons his domicile of origin, as per Holliday v Musa [2010] Civ 335.

Section 13(1) of the Cayman Islands Trusts Law (2017 Revision) (the "Trusts Law") provides for a presumption of lifetime effect, meaning that unless the trust instrument is expressed to be a will or codicil or to take effect only on the settlor's death, then it will be presumed that the trusts and powers were intended to take effect immediately upon the property being vested in the trustee. Section 13(1) is expressed at s13(2) to apply notwithstanding certain facts, including that the trust may have been created in order to avoid the application of laws relating to wills or succession on the settlor's death or during the lifetime of the settlor.

A great deal has been written about the Cayman Islands' firewall legislation, stemming in part from the fact that it was the first international financial centre to pass legislation of this nature. Passed into law in 1987, it is designed to insulate Cayman Islands trusts from attacks by forced heirs and those claiming against the trust by reason of a personal relationship with the settlor. This means that it is likely that Cayman Islands trusts will be protected against orders of overseas courts based on their domestic matrimonial or inheritance laws, as long as the relationship in question is with the settlor.

Section 90 of the Trusts Law stipulates that if a trust is expressed to be governed by Cayman Islands law and has a jurisdiction clause in favour of the Cayman Islands court, all questions arising in relation to that trust will be determined in accordance with the laws of the islands without reference to the law of any other jurisdiction by which the trust may be connected. Section 90 is stated to relate to, amongst other things, questions about the capacity of the settlor, any aspect of the validity or construction or administration of the trust including the powers, obligations, liabilities and rights of trustees, their appointment and removal, and the existence and extent of powers in the trust.

There are, however, a number of exceptions. Section 90 will not operate to validate a disposition of property which the settlor does not own, nor will it validate any testamentary trust or disposition which is invalid according to the laws of the testator's domicile.

Subject to the same conditions as are set out in s90, s91 provides, amongst other things, that no Cayman Islands trust will be void, voidable, liable to be set aside or defective in any fashion, nor is the trustee, any beneficiary or any other person to be subjected to any liability or deprived of any right because the trust avoids or defeats rights, claims or interests conferred by foreign law upon any person by reason of a personal relationship with the settlor – for example, by marriage. Section 93 of the trust law consolidates this point: if a foreign judgment is inconsistent with s91, that judgment will not be recognised or enforced by the Cayman Islands court.

While there is no specific legislation in relation to pre or postnuptial agreements, the court is likely to afford them a similar status as the English Supreme Court in Radmacher v Granatino [2010] UKSC 42. Again, in Billes v Anco the judge found that the court should give weight to what was in that case an unsigned copy of what he referred to as a "marriage contract" or prenuptial agreement, in terms of the division of assets upon divorce. The court thus retains discretion to disregard pre or postnuptial agreements or lend them less weight, if they are found to be unfair to the children of the marriage or there was some injustice in the way that the agreement was reached between the parties.

Matrimonial Law and Division of Assets on Divorce

A couple can divorce in the Cayman Islands if they have been "domiciled" there for at least a year on the date that he or she petitions for divorce. Domicile in this context means that one or other of the parties can demonstrate an intention to reside in the Islands permanently. Alternatively, a spouse can petition for divorce if they have been "ordinarily resident" in the Islands for at least two years prior to filing the petition, regardless of where the other spouse lives.

Divorce in the Cayman Islands is based on the Matrimonial Causes Law (2005 Revision) (the "MCL"), the Maintenance Law (1996 Revision) and supplemental Matrimonial Causes Rules currently in their 2009 Revision. Parties in Cayman Islands divorce proceedings are still required to provide fault-based grounds for divorce, for example, adultery, desertion and unreasonable behaviour. 

There is no community property regime in force and the court has a broad discretion under ss19 and 21 of the MCL to decide the division of assets on divorce, taking into account a number of factors set out in local statute and derived from the common law. 

It has been held in Billes v Anco[2011] (2) CILR 74 (subsequently confirmed by the Court of Appeal in McTaggart v McTaggart [2011] (2) CILR 366), that the court will approach the division of assets on divorce in accordance with the "modern view" that there should be no discrimination on the basis of the nature of the roles undertaken by the parties to the marriage. The court should "aim for equality", derogating from that principle only in "exceptional circumstances". Family law reform has been under discussion for some time but, as yet, no draft legislation has been produced.

The Cayman Islands introduced its first trust law in 1967 and it has been regularly revised since then. It is currently in its 2017 Revision. Cayman Islands trust law is based on the English Trustee Act 1925, but there are significant differences and so it should not be assumed that Cayman Islands trust law is identical in every way to that of English trust law.

As a common law jurisdiction which has based its trusts law on that of England, the Cayman Islands court will have regard to the significant body of reported trusts cases and equitable principle that has been steadily built up in England and the common law jurisdictions since the early 19th century (and in England's case sometimes considerably earlier), much of which has been cited with approval and the principles applied in and by the Cayman Islands Grand Court.

The Cayman Islands was the first international financial centre to provide for non-charitable purpose trusts, known locally as "STAR trusts" as a consequence of the initial legislation, the Special Trusts Alternative Regime Law. This law, since coming into effect in 1997, has been consolidated with other elements of trusts legislation and is now found at Part VIII of the Trusts Law.

The Foundation Companies Law came into effect in the Cayman Islands on 18 October 2017 and allows for the formation of a new vehicle in the islands, the foundation company. This vehicle is a body corporate with a legal personality distinct from that of its members, directors, officers, supervisors or founder and is governed by the Companies Law, currently in its 2018 revision. A number of fundamental modifications have been made to the Companies Law model company meaning that it has additional flexibility for achieving private wealth planning as well as commercial objectives.

Key Features

Trusts are most commonly established in the Cayman Islands for estate and succession planning, and can range from fully discretionary trusts to providing for fixed interest and life tenancies of income. Trusts may be created for individual beneficiaries who either currently exist or may do so at some time in the future; trusts may be created to benefit charities or they can be settled for non-charitable purposes. The perpetuities period for ordinary private trusts is currently 150 years.

A Non-Profit Organisations Law (NPO Law) came into effect on 1 August 2017 and applies to certain charities and philanthropic organisations in the Cayman Islands but not to charitable trusts that have as their trustee a trust company licensed or registered under the Banks and Trust Companies Law (2013 Revision).

Reservation of Powers

Another key feature of Cayman Islands trusts law is the extent to which settlors may reserve certain powers to themselves (or grant powers to third parties) over key decisions in the administration of the trust. Settling wealth on trust by transferring legal title to a trustee who may be situated in a jurisdiction far away from the family's home is a highly significant decision for most settlors; often they have some nervousness in doing so and understandably wish to retain an element of influence over the administration of the assets after establishing the trusts. Alternatively, if they would prefer not to have those powers themselves, settlors often ask whether it would be permissible for other trusted individuals, such as family members or long standing advisors, to have those powers conferred on them instead.

Those powers which may be reserved to a settlor or granted to a third party without invalidating a Cayman Islands trust are set out at s14 (1) of the Trusts Law, amongst which are powers to:

  • amend or vary the trust deed;
  • appoint capital or income, or both;
  • give directions to the trustee over the purchase, holding or sale of the trust property;
  • appoint or remove the trustee, protector or beneficiary;
  • change the governing law and the forum for administration;
  • restrict the exercise of any powers or discretions of the trustee by requiring that they can be exercised only with the consent of the settlor or some other person that he nominates.

There is no requirement to register a trust in the Cayman Islands. The providers of trustee services are registered and regulated. Only "exempted trusts" created pursuant to Part VI of the Trusts Law should be registered. The "exempted trust" regime allows a settlor to apply for an undertaking from the Governor so that, subject to certain requirements, no duty or tax levied in the islands will apply to any property in the trust for a period not exceeding 50 years from the date of the undertaking, the trust will have to be registered with the Registrar of Trusts. That register is not open to public inspection.

While trusts in the Cayman Islands can be established for asset protection reasons, under the Fraudulent Dispositions Law (1996 Revision) a gift made with the intention of defeating a creditor is vulnerable to being set aside within six years of the date of the gift, on application to court by the creditor concerned.

The Cayman Islands has stringent anti-money laundering laws. Currently in force are the Proceeds of Crime Law (2017 Revision), Anti-Money Laundering Regulations (2018 Revision) and detailed Guidance Notes. These laws set out the requirements for due diligence and "know your client" that trustees and other financial services providers must perform in order to understand fully the transaction in which they are involved and the identity and source of funds.


The financial services industry in the Cayman Islands is supervised and regulated by the Cayman Islands Monetary Authority (CIMA). CIMA, subject to local statute, regulates banks, building societies and credit unions, trust companies, trust and corporate service providers, company managers, insurance companies, investment funds, fund administrators and securities investment businesses in the Cayman Islands. CIMA also approves individuals to act as directors, officers and managers of licensed entities and auditors of regulated entities.

For a trustee, it is a corollary of the assumption of responsibility for the administration of property for the benefit of others, that he or she will be liable for the performance of his or her responsibilities in relation to that property, subject of course to the breadth of the exculpatory provisions of the trust deed.

The Cayman Islands court has recognised the "irreducible core" of trustee obligations described in the English court of appeal case of Armitage v Nurse [1998] Ch 241. As described by Lord Justice Millett: "I accept the submission […] that there is an irreducible core of obligations owed by the trustees to the beneficiaries and enforceable by them which is fundamental to the concept of a trust. If the beneficiaries have no rights enforceable against the trustees there are no trusts. But I do not accept the further submission that these core obligations include the duties of skill and care, prudence and diligence. The duty of the trustees to perform the trusts honestly and in good faith for the benefit of the beneficiaries is the minimum necessary to give substance to the trusts, but in my opinion it is sufficient."

STAR trusts have proved to be a popular family business succession planning vehicle and also an ideal vehicle for philanthropic projects which would not fall within the strict definition of "charitable purposes" as per the "heads of charity" defined by Lord Macnaghten in Re Pemsel (1891) AC 531.

The principal features of a STAR trust are, in summary, as follows:

  • the objects can be persons or purposes or both;
  • they are not subject to the rule against perpetuities and so can exist for as long as the settlor wishes;
  • beneficiaries have no standing to enforce a STAR trust and thus have no entitlement to information about it;
  • an enforcer is appointed and all rights to enforce the trust and to receive information about it are held by it, rather than by any beneficiaries of the STAR trust;
  • the rule in Saunders v Vautier (1841) Cr & Ph 240 has no application to STAR trusts – this means, for example, that even if all of the beneficiaries are adults and of full capacity and are in agreement, they cannot call on the trustee to pay the trust property to them and bring the trusts of that property to an end.

A foundation company has great potential as a family business succession planning vehicle. The Cayman Islands' "firewall" provisions found at sections 92 and 93 of the Trusts Law (see section 2.2 Forced Heirship Laws above for a more detailed analysis) apply to foundation companies in the same way as they apply to trusts. Such companies can be formed for any lawful object, including providing financial assistance or benefits to beneficiaries.

The constitution of a foundation company consists of its memorandum and articles of association and may provide for the creation of by-laws that will not form part of the constitution. As well as providing for its management, the constitution may grant rights, powers and duties of any type to members, directors, officers, supervisors, founders or others, for the benefit of the company or other purposes.

Rights under the constitution will be enforceable only against the foundation company and a beneficiary of a foundation company will have no powers or rights relating to the company, its management or its assets. If the objects of a proposed foundation company are to be carried out mainly outside the Cayman Islands, then an application can be made to register it as an exempt company. This means that the foundation company will be eligible for a tax exemption undertaking in relation to any tax that may arise in the Cayman Islands on profits, income, gains or appreciations in the 20 years following the grant of the undertaking. The foundation company is entitled to provide in its constitution for the resolution of internal disputes by arbitration or mediation or some other method of alternative dispute resolution. It also has a right to apply to court for an opinion, advice or directions pursuant to s48 of the Trusts Law in a similar manner to trustees and personal representatives; see section 5: Wealth Disputes for further details.

Forfeiture clauses (also known as "no contest" clauses) which provide for the forfeiture of a beneficiary's interest under the trust in question if that beneficiary challenges the validity of the trust or the disposition of property to it have been the subject of detailed consideration by the courts of the Cayman Islands, see in particular AN v Barclays Private Bank & Trust (Cayman) Limited [2006] CILR 367, applied most recently in AB Jnr v MB & ors [2013] (1) CILR 1. Public policy will not prevent the enforcement of forfeiture provisions in circumstances where the challenge was made without good cause and unsuccessfully.

Under s48 of the Trusts Law, any trustee or personal representative is at liberty to apply to the court for an opinion, advice or direction on any question respecting the management or administration of trust money or assets of any testator or intestate. Provided a trustee acts on the advice or direction given, that trustee will be deemed to have discharged his duty in respect of the subject matter of the application unless he is guilty of fraud, wilful concealment or misrepresentation of the facts in respect of his application. It follows that a trustee seeking the directions under s48 has a duty of full and frank disclosure and as such must disclose all material facts in relation to that application.

Order 85 of the Grand Court Rules also allows for a trustee, beneficiary, enforcer, executor or administrator of an estate to make an application to the court for determination of any question which could be determined in an administration action, including any question arising in the execution of a trust or about the composition of a beneficial class or the rights or duties of an enforcer.

The Cayman Islands has a modern Arbitration Law, currently in its 2012 Revision and largely based on the English Arbitration Act 1996. Arbitration clauses are rarely found in Cayman Islands trust deeds. 

While there is no requirement under Cayman Islands law that trust disputes should be referred to arbitration or to any other form of alternative dispute resolution, the court has implemented an "overriding objective" which is set out at the preamble to the Grand Court Rules 1995 (revised edition). The overriding objective is expressed to be a method by which the court can deal with every cause or matter in a "just, expeditious and economical way". Mediation of trust disputes is therefore increasingly utilised as a form of alternative dispute resolution.

Beneficiaries of ordinary private trusts are entitled to enforce the trusts against a trustee and to seek recourse against it for failure to administer the trusts for their benefit in accordance with the terms of the trust instrument and statute. There are no statutory limitations on a trustee's liability for breach of trust, save that there is at s67 of the Trusts Law a power in the hands of the court to relieve a trustee from personal liability for breach of trust if he or she has acted honestly and reasonably and ought fairly to be excused either wholly or in part for the breach and for failing to apply to the court for directions.

Broadly speaking, where loss has been caused to the trust fund, a beneficiary will seek an account and to recover compensatory damages from the trustee in order to reimburse the fund on behalf of all of the beneficiaries. (See 5.1 Trends Driving Wealth Disputes above for information on wealth dispute arbitration.)

The use of corporate fiduciaries is commonplace in the Cayman Islands. There is no statutory duty of care in the Cayman Islands. Broadly, a trustee must take such care as an ordinary prudent and vigilant person of business would take in the management of his or her own affairs, Speight v Gaunt (1883) 9 App Cas 1; in the investment of trust assets, for example, a lay trustee was bound to act as an "ordinary prudent man of business" when investing for the benefit of others "for whom he felt morally obliged to provide", Learoyd v Whitely (1886) 33 ChD 347.

A paid trustee is, however, expected to exercise a higher standard of diligence and knowledge than an unpaid lay trustee and those who advertise themselves as specialists, in other words, professional trustees, have an even weightier duty of care, as per Bartlett v Barclays Bank Trust Co Ltd [1980] 1 Ch 515. As the judge in that case said, "a trust corporation holds itself out […] as being above ordinary mortals […] and is capable of providing expertise which it would be unrealistic to expect and unjust to demand from the ordinary prudent man or woman who accept, probably unpaid and sometimes reluctantly from a sense of family duty, the burdens of trusteeship".

There are provisions in the Trusts Law which relate to the investment of trust assets but broadly, in modern structures, investment of trust assets is governed by the terms of the trust instrument. If a settlor wishes to settle his family business on trust and for the trustee to be involved in the conduct of that business, then the trustee will first need to agree and then be empowered expressly in the trust deed to do so, usually by way of an express power to carry on a trade in any part of the world.

There is no statutory requirement that trust assets should be diversified and often, any common law duty to diversify is expressly excluded by the terms of the trust instrument. Many settlors prefer to retain a power of investment or a power to direct the trustee or require settlor or protector consent in the exercise of the power of investment; others retain a power to appoint an investment manager of their choosing or occasionally the trustee is permitted by the terms of the trust to delegate its power of investment to a third party investment manager. Subject always to the terms of the trust and in particular any reserved power to direct the trustee in the investment of trust assets, even if the trustee is not responsible for investing the trust assets, it may remain duty bound to keep an eye on investment performance and the conduct of any investment manager in order to discharge its "irreducible core" duties to the beneficiaries. Some families will document investment guidelines and profile for the trust assets in discussion with the trustee.

As in other English common law jurisdictions, when settling property upon trust, a settlor is entitled to place whatever limitation on the liability of the trustee that she wishes, save to the extent that such limitation would prejudice the "irreducible core" of obligations owed by the trustee to the beneficiaries to perform the trusts honestly and in good faith for their benefit. Thus, as long as an exculpation clause does not purport to exclude a trustee's liability for acts or omissions made dishonestly or in bad faith, a trustee will be entitled to rely upon an exculpation clause in defence of a claim in breach of trust. Thus, a settlor can validly exclude a trustee's liability for negligence however gross it may be, but not for fraud.

The Cayman Islands is not part of the UK, nor a member of the European Union. No citizenship advantage is given to British or European nationals over any other nationality.

Subject to a number of exceptions, most foreign nationals working in the Cayman Islands need a work permit to do so. For foreign nationals not wishing to work but simply to reside in the Cayman Islands, there are a number of options. One can apply for a residency certificate which is valid for 25 years and is renewable. Applicants must provide evidence of an annual income of at least KYD120,000 without employment and investment in the islands of at least KYD500,000, of which KYD250,000 must be in real estate.

All foreign nationals employed in the Cayman Islands, subject to a valid work permit, are currently entitled to apply for permanent residence with the right to work after eight years, but before nine years from the date of arrival. Work permits are granted for an initial term of three years and are, subject to certain conditions, renewed at three and then six years for another three years. After nine years, foreign nationals who have not applied for permanent residency or have had their application refused or their appeal against refusal turned down, will not be granted any form of work permit until they have ceased to be resident in the Cayman Islands for at least one year. For most, this will mean they have to leave the Cayman Islands for a minimum of 12 months before they can be granted a new work permit.

There is also a process by which a certificate of permanent residence for persons of independent means can be granted. This option has no expiry date and qualifies the holder subject to certain conditions, to become eligible for naturalisation as a British Overseas Territories Citizen ("BOTC") once they have been resident in the Cayman Islands for five years. Once naturalised, applicants are entitled to a BOTC passport. Once the person has been a BOTC citizen for five years they can apply to become Caymanian.

In order to qualify for this certificate, applicants are required to have invested a minimum of KYD1.6 million in developed real estate and possess sufficient financial resources to maintain themselves and their dependents. Applicants also need to demonstrate that they and their dependents are in good physical health and of good character. The number of these certificates granted annually is subject to an upper limit of 250.

There are a number of other means available to applicants to be granted the right to reside in the Cayman Islands via substantial business presence or direct investment.

There is provision in Cayman Islands law for the appointment of legal guardians for persons who lack capacity to deal with their own affairs. The procedure is laid down in the Mental Capacity Law (2013 Revision) and the Grand Court Law (2015 Revision).

A power of attorney in the Cayman Islands is not capable of surviving the incapacity of the donor of the power. The court, however, may recognise an enduring or lasting power of attorney which is made and properly takes effect in another jurisdiction.

See above 8.1 Special Planning Mechanisms for Minors or Adults with Disabilities.

In trusts and succession law, adopted children are treated in the same way as biological children of the relationship in question. Section 17(1) of the Adoption Law (2003 Revision) provides that at any time after making an adoption order, the adoptive parent or the adopted person dies intestate, the property devolves in all respects as if the adopted person were the child of the adopter born in lawful wedlock.

Similarly, s17(2) of the Adoption Law provides that after the date of adoption, any reference in a will, codicil or lifetime settlement to a "child" will include the adopted child.

"Child" has been expressly defined to include illegitimate children in legislation which relates to the protection of children's welfare. For example, under the Maintenance Law (1996 Revision) there is a duty to maintain the children of the relationship, regardless of whether they were born in wedlock or not.

It is notable that at s87 of the Trusts Law, for the purposes of the protections afforded to Cayman Islands trusts under sections 90 to 93 of the Trusts Law, in other words the "firewall" provisions, "personal relationship" is defined to include children who are "natural or adopted […] legitimate or illegitimate".

Nonetheless, there is no legislative equivalent of s17 of the Adoption Law in relation to illegitimate children and so, if the intention is that children born outside of marriage are to benefit in a settlor's estate or succession plans, a will or trust should be drafted using express words to ensure that the settlor's intentions are properly reflected in the document.

The Bill of Rights, Freedoms and Responsibilities at Part 1 of the Cayman Islands Constitution Order 2009 protects, amongst other things, the right of men and women to marry a person of the opposite sex and have a family together.

The Cayman Islands does not yet have legislation permitting same-sex marriage. This will not prevent same sex couples from utilising Cayman Islands' wealth planning structures. It will, however, mean that particular care should be taken in drafting documentation to ensure that the settlor's estate or succession plans are properly put into effect.

The Cayman Islands does not yet have any legislation recognising domestic or civil partners.

The NPO Law, which came into effect in August 2017, broadly governs non-profit organisations (as defined in the NPO Law) that raise money from the public or a section of the public within the islands. The NPO Law does not apply to an NPO that has a government entity as its regulator or one that is established as a trust and has as its trustee a trust company licensed or registered to carry on trust business (or a controlled subsidiary of such) registered under the Banks and Trust Companies Law (2013 Revision).

The NPO Law provides for the establishment and maintenance of a register of NPOs that are within the scope of the legislation, under the supervision of a Registrar of NPOs. An application for registration must be made in a prescribed form by the "controller" of the NPO – for example, a director of a company if the NPO is established as a company, or the general partner of a partnership if established as such. Once accepted for registration, the NPO must file annual returns to the Registrar.

As discussed above, the Cayman Islands allows for the establishment of charitable purpose trusts in accordance with English common law principles, namely that their purposes fall within one of the four "heads of charity" described by Lord Macnaghten in Re Pemsel. Lord Macnaghten described them in this way: "trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads".

Charitable trusts, either in the form of exclusively charitable purpose trusts or as STAR trusts, are the most common method of structuring charitable giving in the Cayman Islands.

Section 71 of the Trusts Law provides that a charitable trust will not fail to qualify as such because its purposes may in part benefit the public or a section of the public outside the Cayman Islands. While it is plain that s71 is capable of a narrower construction, the consensus seems to be that charitable purposes which are entirely performed outside the islands will still qualify as charitable. In any event, a proposal to tighten up the drafting of s71 in order to clarify the ambiguity is included in a draft revised Trusts Law which is currently under discussion.

The Attorney General is the only person with standing to enforce charitable trusts under Cayman Islands law. He will therefore be joined to any court application which involves charity or charitable interests in order to ensure that the charity is bound in to whatever order the court eventually makes. The Attorney General is at liberty to take an active part in the proceedings on behalf of a charity but will usually decline to do so unless there is an issue on which he wishes to be heard in order to protect the interests of a charity.

A living will or advance healthcare directive is a document by which a person sets out what steps should be taken in relation to their health if it should ever transpire that they are no longer able to make decisions for themselves due to illness, disability or a lack of capacity. In the Cayman Islands, while they may be persuasive, they are not legally binding.

The Cayman Islands has no equivalent to the English Mental Capacity Act 2005 (the MCA) which provides a legal framework to empower and protect people who, either permanently or temporarily, become incapable of making specific decisions for themselves. The MCA is supported by the MCA Code of Practice, which provides guidance on how the MCA is meant to apply, not only for the benefit of the family concerned, but also doctors, nurses and other healthcare providers. It is designed to help them collaborate in making care-related decisions on behalf of the patient.

Despite not having its own equivalent to the MCA, the Cayman Islands courts have applied a number of the principles enshrined in the MCA, most notably in the case of Re D. Before she lost capacity, Mrs D had entered into a settlement agreement compromising litigation which had burdened her family for several years both in the Cayman Islands and elsewhere. Subsequently, after she had lost capacity, a question came up about the requirement for an indemnity as a consequence of that settlement. A committee of guardians had been appointed by the Cayman Islands court to look after Mrs D's financial affairs relating to her interest as a primary beneficiary of the family trust which had been at the heart of the dispute. Two of their number made an application to court for directions from the court to allow them to enter into the indemnity on behalf of Mrs D on the basis that the potential liability under the indemnity was to be assumed entirely by Mrs D and her estate.

In considering the application, the Chief Justice in Re D moved away from the pre-MCA "lucid intervals" test as set out in the English cases of Re L (WJG) [1966] Ch 135 and Re D(J) [1982] 1 Ch 237 to embrace a more modern "best interests" approach, akin to that set out in the MCA. The Chief Justice found that the "wide ambit" of Cayman's Mental Health Law was "entirely accommodating" of the test set out in the English MCA and so it was open to the court to adopt the same test in that case.

This means that the Cayman Islands court will try to judge what a patient would have wanted, were they in a position to make the decision for themselves, in their best interests. In Re D, the Chief Justice started his analysis from the position that Mrs D would wish to benefit her immediate family. As she had freely entered into the settlement agreement while still capable of doing so with the benefit of legal advice, it seemed to the Chief Justice a logical and indeed essential step in her best interests to restore family harmony in her twilight years.

There is no equivalent in the Cayman Islands to the English Court of Protection, which is a specialist court adjudicating the highly sensitive and technical issues that arise in relation to mental health and supervises conduct of the patient's health and welfare by guardians known as "deputies".  The Cayman Islands court is however accustomed to hearing applications under the Grand Court Law (2008 Revision) for the appointment of a guardian on behalf of a person who is no longer capable of managing their own affairs.

Under this jurisdiction, the court can order, with respect to the property or affairs of a patient, anything which appears desirable for the maintenance or benefit of that person and those members of his or her family who rely on him to provide for them. The court has power under the Mental Health Law (2013 Revision) to arrange for a guardian to:

  • manage, sell, acquire, charge or deal with property;
  • provide for the management of a business;
  • complete contracts;
  • enter into a settlement;
  • dissolve partnerships;
  • conduct legal proceedings;
  • act as trustee; or
  • to appoint a receiver.

The Cayman Islands has no specific legislation dealing with digital assets for the purposes of succession.

Maples and Calder

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Ugland House
George Town
Grand Cayman
Cayman Islands

+1 345 949 8066

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Maples and Calder offer the combined experience of eight partners and associates working with trustees and private clients covering all major markets and time zones from offices in the British Virgin Islands, the Cayman Islands, Dubai, Hong Kong, London and Singapore. An outstanding knowledge of commercial trusts adds range and flexibility to the firm's private trusts advice, and vice versa. Maples and Calder's specialist areas include unit trusts, escrow arrangements, estate planning, trustee incorporation, charities, regulatory regimes, third-party claims and dispute resolution. The firm's lawyers provide practical advice on ownership and succession planning based on decades of specialisation and experience. While its diverse litigation team can help avoid or resolve disputes, should the need arise. For private clients, family businesses, charities or trustees, Maples and Calder offer clients expert advice and realistic choices when it comes to every aspect of trusts.


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