To say 2020 has been a challenging year for many would be an understatement. The onset of COVID-19 saw significant hardships for millions of people globally and the economic impacts continue to ripple across the world's economy, with many expecting these negative consequences to have long-lasting effects. One important consequence coming out of the COVID-19 pandemic was the (sudden) obligation on businesses to embrace remote working for employees. This led to unique challenges for the conduct of business from a practical and human-relationship perspective. In a world where "social distancing" was (and in most places continues to be) the new normal, the professional community was required to adapt and face the challenges presented in an uncertain environment.

The Cayman Islands are now in a favourable position with (as of the time of writing) very limited local COVID-19 cases and a willingness from Government to safely manage a reopening of the local economy and a return to the workplace for most employees. As the Cayman Islands transitions back to the office, it will be critical for businesses (including local trustees) to check their inventory to ensure administrative matters are dealt with appropriately and to check in with clients and colleagues to reconnect, reassure, share and learn from each other's experiences.

Originals, execution and stamp duty

Whilst the requirements for the valid execution, stamping and record keeping for trust/estate documents have become second nature for many, we realise the ease at which certain requirements may have been overlooked, or even made impossible, during lock-down.

Was that deed signed electronically? Was that witness present in person with the executing party? Oops! Did the settlor's underage child witness this deed? Where is the stamp? I've been promised original wet-ink signatures, where are they? We've stamped an electronic version of the deed as an original - is that right? My document is missing a stamp - is it still valid and binding? Have we met all our record-keeping obligations? My client's will was witnessed by a family member in lock-down - is that OK?

As we emerge from lock-down and move back to the office, be sure to get your house in order and review the execution and stamping of all "Lock-Down Documents". If you are unsure whether a document has been executed correctly, check out "Electronic Execution of Trust Documents", Walkers' latest guide on electronic means of execution in the latest edition of Walkers' Remote Trustee.1 Also, remember to ensure you have saved electronically all original documents executed in counterpart and continue to meet the high standard of record-keeping obligations that trust practitioners must adhere to (for example, note a private trust company's legislative obligation to keep at its office certain documentary records, including terms of the trust, identity of the trustee, settlors and enforcers, all settlements of property, and records of all distributions of trust property). As it relates to stamp duty, practitioners should be aware that Government did not relax any of the requirements for stamping documents in accordance with the Stamp Duty Law (the "SDL") during the lock-down. The usual rules continued to apply, despite the world working from home (i.e., stamp the original once received in the Cayman Islands). If an executed deed that is stampable under the SDL exists as an electronic record only (it has been electronically signed, processed and maintained) and is received in the Cayman Islands then, under the SDL, the recipient is legally obliged to print off that electronic deed and have it stamped. In such circumstances, there is no need to have a copy of the deed re-signed in wet ink, as the electronically executed deed is treated by the ETL (defined below) as the original.

If a stamp is missing, all is not lost, but make sure you attend to any stamp duty oversights as soon as possible. Whilst failing to stamp an instrument does not affect its validity in the Cayman Islands, interest and penalties can apply2 and any person seeking to rely on such unstamped document as evidence in any court or legal tribunal will be required to stamp or stamp-up the instrument (twice the amount for any unpaid ad valorem duty and twenty times the amount for any other case).

Is that Will valid?

Under the Electronic Transactions Law (the "ETL"), a document will be validly executed if the parties apply their electronic signatures, using modern electronic signing methods such as PDF signatures and DocuSign. However, pursuant to sub-section 3(1) of the ETL, this law has no application to the creation, signing and witnessing of Wills.

The requirements for validly executing a Will are set out under section 6 of the Cayman Islands Wills Law (the "Wills Law"). Section 6 of the Wills Law provides that a Will is required to be signed by the testator at the end of the document and in the presence of two witnesses, present at the same time. It is also worth noting that the Cayman Islands has also recently passed The Formal Validity of Wills (Persons Dying Abroad) Law. Under its terms, a Will is properly executed if its execution conforms to either i) Cayman Islands law or ii) the law in force in (a) the place where the Will was executed, or (b) the place where the testator was domiciled or habitually resident at the time the Will was executed or the time of the testator's death, or (c) the state of which the testator was a national at the time of execution or on death.

Remote witnessing of a Will such as by video link would prove insufficient based on the requirements set out under Section 6 of the Wills Law. Even if a testator lives with family members who may be able to act in such capacity, this could also present challenges on the basis that a beneficiary named under the Will or a person married to a beneficiary should not act as a witness as this will result in that beneficiary's entitlement under the Will becoming void. It is not advised that a proposed executor act in such capacity either.

If Wills have been executed under lock-down, we would recommend that these be revisited and re-signed in accordance with Section 6 of the Wills Law. This will ensure that the requisite signing requirements have been complied with and will avoid any requisitions being raised on the application for the grant of probate with the Grand Court of the Cayman Islands once filed. In "Trust Governance-Navigating the Global COVID-19 Pandemic"3, the second instalment to this series, we note that while many clients might opt to use texts and other instant messaging platforms as a quick and convenient means of communicating with trustees and professional advisers, it was important for trustees to keep a proper paper trail detailing instructions and actions taken. To this end, now that class is back in session and systems are back to normal, trustees should ensure that all decisions made to date are properly documented in the form of approving/ratifying resolutions. Where meetings have been conducted virtually they should be accurately minuted and approved by the attendees. Further, any registers maintained by the trustee or elsewhere should be checked to ensure the most accurate and recent information is included and reflects any changes taking place during lock-down.

It is also imperative to ensure that, if not done so already, all statutory filings are made with the relevant authority as soon as possible. Failure to do so may attract unwanted penalties and transactions conducted, on the assumption that all information provided is true and accurate, may be void and not binding. If lock-down has caused delays to the receipt of information or documentation, ask again!

Check in with clients

The success story of Cayman's pro-active response to the global pandemic and the ease with which local trustees have been able to continue with 'business as usual' both working from home and now back in the office, is something to shout about. With restrictions on travel likely to remain in place for some time, face-to-face meetings with clients are unlikely to be possible into the New Year. That does not mean, however, that the opportunities to promote Cayman's fiduciary services industry and maintain existing client relationships are lost. On the contrary; now more than ever clients will be seeking comfort from their professional services providers and those with structures in other jurisdictions that have fared less well during the pandemic will be looking for a 'safe' jurisdiction to house their structures. The success of Cayman provides the ideal opportunity not only to reconnect with existing clients but also to promote Cayman as the jurisdiction of choice for wealth structuring. Expensive marketing efforts that would see colleagues on the road for weeks at a time can be replaced with inexpensive and innovative online events and meetings truly showcasing Cayman and your business.

As we emerge from a global lock-down, trustees and other professional service providers should seize the opportunity to pause, reflect and plan for a future in this new reality with the ever-present possibility of a second wave of the pandemic. As the initial lock-down dust settles and people move back to their offices, this is a time for businesses to think about what worked and what improvements can be made to streamline processes and adjust to the 'new normal' in 2020 and beyond. Face-to-face meetings will continue to be replaced by online meetings and trustees will need to continue to embrace the technology available and be fully engaged in order to get the most out of it, internally and externally.

The pandemic has forced many of our clients to confront their own mortality and lock-down has provided them with an opportunity to reflect and consider the objectives of their asset protection structures. Once the files have been placed back in order and records have been updated, trustees should take time to consider whether the longer term objectives of the structures are protected, still fit for purpose and continue to meet the current or new objectives of their clients.

Footnotes

1 https://www.walkersglobal.com/index.php/publications/100-article/1974-the-remote-trustee Lock-Down Documents and https://www.walkersglobal.com/index.php/publications/100-article/2168-the-remote-trustee-electronic-execution-of-trust-documents Electronic Execution of Documents

2 The Minister of Finance has the discretion to waive any interest and duties payable under the SDL.

3 https://www.walkersglobal.com/index.php/publications/100-article/2053-the-remote-trustee-trust-governance Trust Governance

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.