Estate Planning in the British Virgin Islands

BVI Wills

To administer or otherwise deal with British Virgin Islands (“BVI”) assets of a deceased person owned in their sole name at the date of their death (which may include shares in a BVI business company or real property), a grant of representation must, at least in practice, be obtained from the BVI Probate Registry.

Although the resealing of foreign grants of representation is permitted under BVI law, at the time of writing, the BVI Probate Registry allows the resealing of foreign grants of representation from the 67 jurisdictions listed in the BVI Resealing Act 2021, and no others. Additionally, while BVI assets may be disposed of by way of a valid foreign Will (for which advice should always be obtained), it is likely that a grant of representation will need to be obtained in another jurisdiction initially (which may be particularly time-consuming) irrespective of whether (i) the foreign Will shall be submitted for an application for a grant of probate in the BVI or (ii) the grant of representation obtained in another jurisdiction will be resealed in the BVI.

As a result, it is quite common for BVI assets to be disposed of via a BVI law-governed Will, since this enables applications for grants of representation in a deceased foreign domiciliary’s place of residence, and the BVI to be progressed simultaneously. Importantly, it is essential to also note that except in relation to BVI real property, succession of all other BVI assets (with the inclusion of BVI shares as recently confirmed in the BVI case of Al-Thani & anr v Al Thani & ors i[2024] UKPC 35) is governed by the laws of the testator’s domicile.

Ultimately, while the preparation of a BVI Will may be a suitable succession planning option for many people, it may be unfavourable for people making an EU Succession Regulation in respect of their EU-situs assets, those who wish to ensure business continuity without delay in the event of their death or those who have further concerns including, but not limited to, the implications of forced heirship. As a result, they may consider alternative estate planning options such as the use of a BVI trust.

BVI Trusts

BVI trusts remain a useful estate planning tool for the circumvention of probate requirements as the settlor will have divested themselves of the trust assets prior to their death, having transferred the same to a trustee to be held upon the terms of the relevant trust instrument. Furthermore, the conflict of laws rules set out in section 83A of the Trustee Act provide that the operation of foreign law as it concerns foreign matrimonial and forced heirship claims is to some extent expressly excluded, which makes such trusts attractive to people domiciled in jurisdictions where such rules apply.

BVI trusts created in accordance with the Virgin Islands Special Trusts Act (as amended) (“VISTA”), are particularly appealing to people establishing trusts for both business continuity and succession planning more generally who wish to restrict a trustee’s ability to actively manage trust assets. Although a VISTA trust can only directly hold shares in a BVI company / companies, there are no restrictions on the assets which can be owned by any of the underlying BVI company / companies which comprise the trust fund. Crucially, while the trustee of a VISTA trust retains a statutory right to information about the company’s affairs, the management of the underlying BVI company / companies must be left to the directors of any such company / companies.

Reserved Directors

An important consideration for a sole shareholder of a BVI company who is also the sole director of the BVI company (the “Sole Member / Director”) is the appointment of a reserve director.

Upon the death of said Sole Member / Director, a BVI company may essentially be left in limbo, as there is no surviving member of the company who can appoint a director of such company until a grant of representation has been issued and the register of members has been duly updated. A reserve director can be nominated by the Sole Member / Director and, once they have consented to act, they will automatically be appointed as acting director upon the death of the Sole Member / Director.

While a grant of representation will still be required to distribute the shares of the entity to the relevant heirs of the deceased shareholder’s estate, the operation of the business as a going concern may continue.