Inheritance of BVI shares (Grant of Representation). Service offer

Let us first look at the BVI asset inheritance procedure as such. The local court must issue a grant of representation – a document authorising to administer the deceased’s estate. It may take the form
of:

1. Grant of probate – when the deceased left a will; or
2. Grant of letters of administration – when the deceased died intestate.

It should be noted that a grant is required both in the case of direct ownership of shares and in the
case of nomineeship (where shares are held by a nominee shareholder).

This is because in most cases, the nominee shareholder holds shares in a passive trust (bare trust), where the
nominee manages the trust property (shares) strictly as instructed by the beneficial owner, and not at the nominee’s sole discretion, as the trustee does in a proper trust.

Therefore, the court will not regard the nominee as the owner of shares in such a structure.

A will specifies what happens to the individual’s property and possessions (the "estate") after the individual’s death.

The grant of probate is essentially a court order confirming a will.

An application for a grant of probate is submitted by the executor specified in the will.

After receiving the court order, the executor must administer and dispose of the estate as instructed in the will.

It is worth adding that even a will made under the BVI law does not override the forced heirship laws. That is, the provisions of succession law operating in the deceased’s country of domicile take precedence over a BVI will.

Let us now consider in more detail the option of inheriting shares in
the absence of a will, as a more common option.

If the deceased left no will, it is necessary to apply to the BVI court
for grant of letters of administration – judicial authorisation to administer
the inherited property – that appoints the administrator of estate who has the
right to dispose of the inherited BVI assets.

The application is normally submitted by one of the legal heirs. The
order of succession is determined by the law of the deceased’s country of domicile,
which is why a document called an affidavit of foreign law (see details below)
is so important. If the deceased has other heirs in addition to the applicant,
including heirs with less priority in the line of succession, it is necessary
to explain why they are not submitting the application, or formalise their
renunciation of the right to receive letters of administration in favour of the
applicant.

Thus, what emerges as a result of the court procedure is not distributed
estate, but a court document appointing an administrator of estate. This
administrator can then contact the registered agent of the BVI company and,
based on the letters of administration issued by the local court, demand to
make the necessary changes in the structure of the company, such as transfer
shares from the deceased shareholder to the deceased’s heir or heirs.

1. Receiving scanned documents from the client to send a request to BVI lawyers.
2. Drafting by BVI lawyers of the application to the court, affidavits, and other accompanying documents. Drafts are normally prepared within a matter of days.
3. Execution, certification, apostille and (if necessary) translation of documents for submission of the application to the court. Shipment of originals to the BVI. Due to rather stringent requirements for the execution and certification of documents, this stage can take considerable time – from several months.
4. Submission of the documents to the court and their assessment. The application assessment time is not regulated in any way. On average, the waiting time is 8-10 weeks, but in practice an order can be issued earlier than that.

Various fees must be paid when submitting the application. In addition to the fees for filing the application form and each affidavit, there is also a fee which depends on the value of the estate: the value is indicated in the relevant declaration (Declaration and Account of the Estate).

In 2017, this fee was significantly increased and now amounts to:

The value to be specified here is gross value, meaning the valuation of the estate without deduction for debts or encumbrances.

No formal appraisal of the property is required. The court accepts the figures as they are indicated in the Declaration, but reserves the right to request additional information/documents if necessary.

Since 2018, as part of application for the grant of letters of administration, it is also necessary to publish an announcement that such an application has been submitted to the court. This allows the interested parties file their objections. An announcement in the form prescribed by law must be published in a local newspaper of wide circulation once a week for at least two weeks in a row, and copies of the publications must be submitted to the court along with other documents.

In addition, after obtaining the grant of letters of administration, it is also recommended to make publications for the purpose of notifying possible creditors of the deceased.

Unlike the publication described above, this one is not mandatory, but allows the personal representatives of the deceased to protect themselves from personal liability to his creditors. Protection is provided by the Trustee Act and involves the publication of a notice in a local newspaper and in the Gazette, as well as the publication of other notices outside the BVI – in the country of the deceased’s domicile, business, location of real estate, etc.

It is necessary to wait for at least 28 days from the date of publication of the notice to proceed with the distribution of assets.

The following information and documents are required to prepare and submit an application:

• Deceased’s last known domicile address;
• Name and address of the person to be appointed as administrator of the estate;
• Names and dates of birth of the deceased’s spouse and children;
• Composition and value of the BVI assets (i.e. BVI company shares in this case);
• Death certificate of the deceased;
• Certificate of inheritance or its equivalent;
• Proof of identity (passport) and proof of address (utility bill) for the heirs;
• Documents confirming the relationship of the heirs and the deceased (for example, a birth certificate, marriage certificate, etc.)

The documents are presented as notarised and apostilled copies, with English translation (where they are not originally in English). It is also necessary to provide the hardcopies; they will be returned after obtaining of the grant from the court.

Based on the documents and information provided by the client, local lawyers prepare the following documentation to file with the BVI court:

• Application for Letters of Administration – an application submitted to the court in the prescribed form for obtaining the right to administer the estate (company shares);
• Oath of Administrators – confirmation by the applicants in the prescribed form that they are entitled to inherit the estate and that after receiving the estate they will pay the debts of the deceased and distribute the rest of his estate according to law;
• Declaration and Account of the Estate – a statement of and report on the value of the estate;
• Affidavit of Foreign Law – this document is issued by a lawyer/attorney practising in the country of the deceased’s last known domicile and having the necessary qualifications, and identifies the persons who are entitled to inherit the estate. This affidavit is especially important because, among other things, it determines the order of succession, which may be different from the one customary in the BVI.

Since each case is unique, the set of documents may be different. In particular, the situation may require additional documents such as:

• Affidavit of delay – an explanation of the reasons for the delay if the application is submitted more than three years after the death of the deceased;
• Renunciation – refusal from being granted the authorisation to administer the estate, executed in the prescribed form. The renunciation is made in favour of the administrator of the estate in the case where there is more than one heir, usually in favour of one of the heirs.

The deceased was the sole shareholder and the sole director of two BVI companies. The heirs are the wife, two minor children, and the father. The application for letters of administration was filed by the wife and father. In total, the process of collecting and preparing all documents took 10 months. The court order was granted 2.5 months after the application filing (the estimated period of 1.5 months increased due to the Christmas holidays).

The deceased was the sole shareholder of a BVI company. The heirs are the husband and son. The application for letters of administration was filed by the son, and a renunciation was made by his father in the latter’s favour. In total, the process of collecting and preparing all documents took 8.5 months. The court order was granted 7 weeks after the application filing.

The deceased was a 25% shareholder of a BVI company. The heirs are the wife and daughter. The application for letters of administration was filed by both. In total, the process of collecting and preparing all documents took 10 months. The court order was granted 2.5 months after the application filing.

Court expenses / application fees (depending on the value of the estate):