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Cayman Parent | Articles | Expert Advice | CP Tips | Preparing Your Family For The Worst

CP Tips | Preparing Your Family For The Worst

a sad person preparing for death in the family

Life’s two certainties, death and taxes, are often spoken in hushed tones, frowned upon as dinner table conversation and, unfortunately, mostly ignored and treated as an unnecessary expenditure of time. When raising the topic of estate planning, many respond immediately with “oh, yeah, I need to get a will drafted”, but never see it through. Often it’s only through the loss of a loved one and the subsequent dealings with their estate, that the value of a properly drafted will and thorough estate planning come to light.

Why Draft a Will?

In short, if you pass away without leaving a will (known as dying ‘intestate’), your estate will be distributed between your beneficiaries in accordance with the legal statutes that are applicable. Your family members will have to follow the clearing-off principles to determine who is entitled to become the representative of your estate, and then actively administer the same and distribute it amongst your beneficiaries (mainly family members) according to criteria set out in law.

Many people take on the responsibility of acting as a representative of an intestate estate, and then immediately find themselves overwhelmed. Worse, they may treat the estate as their own property and in the process expose themselves, and the hard earned life savings of a loved-one to mismanagement lawsuits brought by disgruntled beneficiaries. More often than not, they may even fail to properly account for all assets.

The Cayman Islands have very broad testamentary freedom, which means you are effectively allowed to leave your assets to anyone, as you please. You can also specify how you would like to have your remains disposed of. However, one must note that certain countries and/or states that operate under civil law, have strict rules as to who benefits from all or part of your estate, irrespective of whether you have a will.

If you wish, you can decide on who to appoint as the representative of your estate. The benefit of having a local representative who is familiar with the Cayman Islands legal system cannot be overstated. Their familiarity with the rules could save your estate from significant expense, not to mention alleviate the stress placed on bereaved loved ones who may otherwise find themselves having to negotiate the requirements of a country and legal system they may not be familiar with.

Worldwide Assets

Proper estate planning could also limit your estate’s exposure to certain taxes upon your death.

Long term residents often incorrectly assume that being domiciled in the Cayman Islands (which does not have estate taxes) automatically means that their estates and assets located in other localities are exempt from jurisdictional taxation rules. It can be an incredible and unnecessary shock to beneficiaries to suddenly have part (or all) of an estate subject to heavy taxes. As such, in certain circumstances it will become both smart and necessary to draft multiple wills for each jurisdiction within which your assets are located, or consider the creation of certain trust structures.


Drafting a Will

Although any person can draft their own will, there are certain legal requirements that must be met in order for it to be valid.

Take advice from an attorney to make sure your will is:

  • unambiguous,
  • clearly sets out your wishes
  • meets legal requirements.

Attorneys can also provide additional services such as the retention of your will.

Ensuring Your Will Is Valid

A will can be handwritten, typewritten, or prepared on a computer.

If handwriting your own will, it is important that you ensure it is valid and meets appropriate legal requirements. As requirements for wills vary internationally depending on your location, it is necessary to seek legal advice when drafting your will.



Consider for a moment:

You can use a will to appoint your children’s guardians and also create structures and empower the trustees of your estate to invest, apply and manage your assets in the best interest of your children (or even your grandchildren or any other beneficiary). During your life you take great care to ensure the well-being of your children, and you carefully manage your income so that you can pay for their school fees, family vacations, medical expenses and life in general. Drafting a will can ensure that your beneficiaries’ needs are tended to with the same level of care and careful management of your estate.


Keeping Your Will Up-to-Date

Circumstances change. Did you recently get married? Divorced? Have a child? Move to a new country? Lose a loved one? Buy a new house? Revive a stale relationship with a sibling? Become involved in a charity?

The beauty of a will is that it can be destroyed, rewritten or amended at any time, assuming you meet the legal requirements to do so. It’s not a document intended to be drafted once and kept in the cupboard for the next 50 years. Children grow up. Family and personal circumstances change. Review your will periodically to make sure it still reflects your wishes.



Letters of Wishes

Often accompanying a will is a letter of wishes setting out additional, non-binding requests. Such letters can be a great comfort to family members who find themselves dazed and unsure about where to begin in dealing with your final wishes and requests.

Simple instructions include where your life insurance policies, annuities and pension plans are held. Or your bank account details, your electricity, water, internet account numbers, your computer password, a list of your fixed assets, the names of your attorney, accountant, doctor, and generally all of those items that we take for granted, but is only known to us.

Setting this out in a letter of wishes will save your representative hours of digging through papers and making telephone calls trying to determine where your assets are held. Giving precise details can save your estate from potential losses due to unidentified assets.

Your attorney will ask you to fill out an instruction sheet with the following information:

Family Information

Key Roles in your Will


Pecuniary bequests – These are legacies of cash that you may want to leave to someone. You will need to include their names, addresses and the specific amount you would like to leave to them.

Legacies of property – You will need to identify the specific item/property that you want to leave someone, as well as their full name and address.

Beneficiaries of the rest of your estate – This is whatever is remaining in your estate and can be given to one person, or it can be divided equally, or unequally, between several people. It is called the ‘residue’ of your estate.

Substitute beneficiaries of your estate – In this section you need to name a substitute to inherit your estate should the named beneficiaries die before the estate can be given to them.

Age of inheritance – You will be asked if you want to specify an age when your beneficiaries inherit the residue of your estate. This is only really relevant if your beneficiaries are very young at the time of you writing your will.

‘Worst case scenario’ gift – You need to name a charity, family member or friend who will inherit your estate if everyone you have named in your will dies and cannot inherit it. If you have named someone in your will and they die before you, you need to specify if you would like the gift to pass to their children.

Assets & Liabilities List

The final portion of the will requires you to list your assets, liabilities (mortgages and outstanding debts), as well as any life insurance policies you may have and the details of your pension plan (including policy numbers). You will need to estimate a value for each of these and indicate whether they are owned by you alone or shared with your spouse.

Do you know everything about life insurance in Cayman?

Check out our article on why you should invest in Family Life Insurance. Looking for experts in wealth management? Talk to experts at RBC, Fidelity, or Butterfield.

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Bodden & Bodden Attorneys-at-Law

Bodden & Bodden Attorneys-at-Law specialises in wills and estate planning.


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