Wealth and Succession Planning for Asian Families in the Cayman Islands and the British Virgin Islands

Flexible British Virgin Islands (BVI) and Cayman Islands (CIs) tailored solutions are available for Asian clients who wish to put in place effective wealth succession plans.

The options available can address concerns that may relate to unfamiliar common law trust structures and issues relating to relinquishing ownership and control of assets, confidentiality, and costs.

BVI or Cayman Islands Wills are the simplest planning tool and can decrease the amount of time that an Estate is in probate and therefore reduce corporate uncertainty caused by the death of a sole shareholder director.

More sophisticated solutions, which cater more effectively for more complex succession planning issues, include: discretionary trusts, share trusts, VISTA or STAR trusts.

Assets held in BVI or Cayman Islands trusts are protected by ‘firewall’ provisions which reduce the threat of foreign laws, e.g. forced heirship laws, operating against those assets. Privacy is also preserved since trust documents are confidential and there is no register of trusts in the BVI or Cayman Islands.

The trusts legislation in both the BVI and CIs can permit a wide range of powers to be reserved by a settlor (or granted to others, such as a protector) without affecting the trust’s validity, this can allow a limited amount of control to be reserved to the settlor.

Private Trust Companies (PTCs), family office solutions, and Cayman Islands Foundation Companies are also available and can provide an effective alternative where there is reluctance to transfer significant family wealth and control of businesses to a third party trustee.

The appropriate wealth planning structure will depend on the assets involved and the complexity of the succession needs. Harneys would be happy to advise further on this.

This article was originally published by Wealth Briefing Asia.