There is no inheritance tax in the Cayman Islands. The Succession Law (2016) Revision implements freedom of disposition, believing that you can dispose of your assets as you please. This makes it very hard to contest legal Cayman wills, and so it is imperative that you have an understanding of the legal process and an up-to-date will.
The Law provides that a grant of probate or letters of administration from the Grand Court of the Cayman Islands are required to administer a deceased’s estate. Cayman wills can be probated for fees of around CI$300. The application for probate must be filed within six months of the death, otherwise an application has to be made to the Grand Court for special leave. When probate is granted around four months later, it records the executors and acts as proof of their legal entitlement over the deceased’s estate. You will need to obtain sufficient copies of probate to change the names of any bank accounts or land titles.
It is important to note that under the Succession Law, executors are only entitled to a very small percentage of the estate. However, if the executor is an attorney-at-law, a clause can be included in the will that entitles him or her to charge and be paid usual fees rather than the fixed percentages prescribed by the Succession Law.
The Formal Validity of Wills (Persons Dying Abroad) Law (2018) prescribes that a will is considered valid if it conforms with either the laws of Cayman or the laws where the will was made. This Law also applies to wills written before its 2018 conception. This Legislation does not affect foreign wills with Cayman immovable assets (e.g. property), as Cayman law already applies. However, the following process is the same whether the assets are immovable or moveable. After the will has gone through the process of being registered under the law of the relevant country, it can be re-sealed by the Cayman Probate Court. It will then be treated as if it were a Cayman will and follow the same procedures. The only exception is if it is in a language other than English, in which case a certified translation is required. Please note that not all countries allow wills to be resealed, and so you must check prior to writing your will.
Dying intestate (i.e. without making a will) makes the situation significantly more complicated. If a Cayman-domiciled person dies intestate, a personal representative, such as a surviving spouse or child, has to apply to the Grand Court for a grant of letters of administration. This grants them the power to deal with the deceased’s assets in accordance with sections 28 and 29 of the Succession Law, which dictates exactly how it must be administered. In order to navigate this process, seek advice from a duly qualified attorney-at-law. HSM Attorneys-at-Law can assist you in writing a will or advising on probate, alternatively refer to the Working in Cayman chapter for a list of law firms who will also be able to help.
Inheritance Tax & Domicile
For foreign residents, inheritance tax may still be due in their country of domicile. Your lawyer will be able to determine whether or not you are domiciled in Cayman, or advise you on the steps you should take to change your domicile to Cayman. Purchasing a grave plot or vault in the Cayman Islands and purchasing insurance which pays for your mortal remains to be repatriated to Cayman are two ways to prove your domicile is in Cayman. For more information on this subject please refer to the Immigration page.