Why is it important to have a will?
Author: Mariyam Umar
What Is A Will?
Ever wondered what happens to all the property or assets a person owns after his/her death? If you think about it, matters related to inheritance might seem to be quite straightforward as ideally your assets should be given to your immediate family however, sometimes complications occur and the whole process leads to bitterness among family members. The last thing a person wants is for their family to first deal with the tragedy of their death and then fight over their possessions. To make things easier, a person can write a will. It is a legal document that describes how you want your possessions like real estate, jewellery, vehicles etc to be distributed after you have passed away. Apart from that, a will also specifies who becomes the guardian of your minor children after your death.
Can You Make Changes To Your Will?
It is important not only to have a will, but also to update it regularly according to your personal circumstances, as they can change quite often. An alteration can be made through a “codicil”, which is a modification made in a will. However, you need to keep in mind that all the changes need to be recorded in accordance with the legal requirements and in the presence of two witnesses. You can also completely revoke a previous will and make a new one from scratch.
What Happens If Someone Dies Without A Will?
It is important to have a will if you want to avoid any arguments within your family regarding your assets after you have died, as these matters can get quite complicated and leads to unpleasant events, so it is best to avoid them.
When someone dies without a will, it is called “inestate”. In this case, the local court/state takes over and follows the distribution of possessions even more carefully because they are the sole decision makers of who gets what. This means that regardless of your personal relations with each relative, the court will do what is legally appropriate.
Each country or state has a standard procedure for dividing property and assets if someone passes away without a will. An important factor that dictates how things are divided is your marital status, whether you have parents or siblings who are alive, or if you have any children. If you do not have any immediate family, even then the court/state will not give your assets to your friends, a preferred charity or any other person/organization. In this case, all your assets become the property of the state or government.
For a will to stand valid, it needs to be in a written form (typed and printed or handwritten), it must contain your signature which should be seen by two witnesses who are also required to sign the will.
Why Is It Important To Have A Will?
You must really consider having a will if your family setup is a little complicated, meaning you have dependent kids from multiple relationships, you are divorced and now have a partner whom you have not married yet, or if you are estranged from your parents or siblings.
Also, in case you are associated with a charitable organization during your lifetime then you might consider leaving them some of your funds or possessions, in which case you need to state them as a beneficiary in your will. Because as mentioned earlier, if an organization/person who is outside your immediate family is not explicitly mentioned in your will then they get not get any share of your property. A will is also very important when you have people financially dependent on you, as you do not want to leave them without adequate support after your death.
Recently, we have also seen people securing a portion of their financial funds for their pets in their wills so that they can be looked after their death. This is another reason why someone would want to consider having a will, just to make sure that your furry friend is cared for even when they are gone.
Who Do You Need When You Are Making A Will?
When you decide to create a will, you also need to appoint an executor, who helps take care of your affairs after your death. Some people also prefer to appoint their solicitor as their executor because of their expertise and personal affiliation. The executor should be someone trustworthy and competent as they need to make the will in accordance with the laws of your country or state. The executor performs a couple of different jobs after your death:
- They need to pay off any remaining debts that you might have
- They file all your tax returns
- They organize and gather all the assets that are mentioned in your will
- They distribute your property they way you have highlighted in your will
- They need to acquire probate (It is a legal order from a court that proves the presence of a valid will and gives the executor the power to administer the estate of the deceased according to what has been specified in the will)
It is ideal to have at least two copies of your will; one you should keep somewhere safe yourself and the other with your solicitor. It is also a good idea to let your executor know where you have kept your own copy. You must also consider listing a couple of people in your will as beneficiaries as then your asset will be given to others in case someone passes away before your own death.
It might seem like just another legal document however, if you think about it, a will can be one of the most important legal documents that you might have. All the assets that you might have acquired after years of hard work need to be given away to the right people after your death so it is a good idea to take your time and think about how you want your valuables to be distributed.
Commercial Lawyer of the Year
Glenn D. Godfrey & Co. LLP: A lifeline in a financial storm
In the wake of a banking crisis, it’s the depositors who suffer the most. Not many people have been hit as hard as the depositors of Choice Bank. However, one law firm is helping to make a difference.
Choice Bank Liquidity Crisis
In April 2018, Choice Bank was going through a major liquidity crisis causing it to severely limit withdrawls from the bank. This, of course, came as a complete surprize to bank’s depositors who up until then had been lead to believe that the bank’s liquidity and other measures of its financial health were better than required by law and the Belize Central Bank. Surprize turned to shock when, a few months later, Choice Bank informed its depositors that they would not be able to make any withdrawls from their accounts.
Choice tried to soften the blow by informing its depositors that they would be able to made immediate withdrawals of up to $25,000 (US) from their individual accounts. Furthermore, it was announced that in July Choice Bank depositrs would be allowed to withdraw an additional $25,000 to $75,000 (US). Ultimately, Choice promised that by the end of August 2018, depositors would be able to withdraw up to $100,000 (US).
Unfortunately, none of those rosey predictions materialized and ultimately the government ended up revoking the bank’s license and appointing a liquidator to wind up the affairs of the bank. These events took place before the clients were able to withdraw any cash. This turned out to be the beginning of a battle between the clients of Choice Bank and the Liuidator appointed by the Belize Government.
In the meantime the owners of Choice Bank filed a claim alledging that the revocation of Choice’s banking license was completely unwarranted, and claiming damages for the wrongful revocation. This evolved into a court battle between the Government of Belize and Central Bank of Belize on one side, and the owners of Choice Bank on the other. Basically, the Central Bank claimed that it revoked Choice’s license because Choice could not or would not provide a plan that indicated their willingness or ability to resolve the situation. The Central Bank sent a team of examiners to conduct an unannounced inspection at Choice Bank, in order to acquire information that the Bank refused to provide.
Furthermore, in another twist of events, the Central Bank of Belize replaced the Bank’s previous liquidator, Henry Hazel, with an accountant, Cedric Flowers. According to Choice Bank owners, these actions were far from justified and proved to have significantly damaged the reputation of this one highly acclaimed establishment.
Choice Bank’s depositors seek legal assistance
Because of the unending legal struggles between Choice Bank and the Central Bank of Belize, the claims of Choice’s depositors were being ignored. Finally a large group of them decided to take mattrs into their own hands and retained one of the leading law establishments in Belize ㅡ Glenn D. Godfrey & Co. LLP.
From its beginning as Sosa & Godfrey in 1979, Glenn D. Godfrey & Co. LLP has become one of Belize’s most prominent law firms. It is difficult to open a newspaper in Belize without seeing mention of this law firm in one of its articles. After strenuous efforts by Glenn D. Godfrey & Co. LLP the firm was able to secure a measure of justice for the depositors of Choice Bank. The law firm filed a claim against the Central Bank of Belize, and the Liquidator of Choice Bank. This prompted the Liquidator into taking immediate action. In the end, an incredible 95% of these claims were recognized in full by the Liquidator. However, it remains to be seen how much of these are actually paid out.
There’s no doubt about the fact that an event such as this one has devastating effects on all parties involved. The legal experts at Glenn D. Godfrey & Co. LLP might mitigate some of these losses.
Belize Takes Major Steps towards Strengthening Copyright & Industrial Design Compliance.
The Government of Belize, in one fell swoop, acceded to six (6) major international treaties concerning Intellectual Property (IP), through the Belize Intellectual Property Office (BELIPO) representative, present at the General Assemblies of the World Intellectual Property Organization (WIPO) in late September 2018. Five of the six treaties were copyright-related, and will be the foundation for updating of the Copyright Act in Belize, which commenced in 2000. These treaties are:
- The International Convention for the Protection of Performers, Producers of Phonograms & Broadcasting Organizations (“Rome Convention”);
- The WIPO Copyright Treaty (“WCT”);
- The WIPO Performances & Phonograms Treaty (“WPPT”);
- The Beijing Treaty on Audiovisual Performances (“Beijing Treaty”);
- The Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Disabled or Otherwise Print Disabled (“Marrakesh Treaty”)
The various provisions in these treaties, once adopted into Belizean law, will provide added protection and meet modern global standards for all copyright owners, with added impact on live performers, music producers and broadcasters. The WCT & WPPT (together known as the WIPO Internet Treaties) will modernize the legislation to include matters of infringement through “wireless” means, which adds coverage and recognition of rights concerning technology, not contemplated before in the Copyright Act. The Marrakesh Treaty adds much needed exemptions to the Copyright Act to allow for conversion of some works into formats that are suitable for those with print disabilities. The sixth treaty acceded to by Belize is the “Geneva (1999) Act of the Hague Agreement concerning the International Registration of Industrial Designs”. This will allow applications for industrial design protection to be filed into an international database from BELIPO’s location. It can also allow for registration of foreign industrial designs in Belize using the Hague system, without additional steps contemplated in regular local registration.
Belize’s steps towards compliance with global standards of intellectual property are in line with the recommendations of the National IP Strategy, which though not yet approved by Belize’s Parliament, is guiding the actions of BELIPO as it aims to strengthen the IP landscape. CILGlobal IP’s In-House Attorney, Marissa Longsworth, in an individual capacity, was the consultant who authored the National IP Strategy, with WIPO’s support and final approval. These positive steps are not only expected to help Belizeans to find ways to generate value from their IP domestically and internationally, but also to increase business and investor confidence with an environment where the creativity and innovation of others are respected and can be enforced with laws which are in line with global expectations.
CILGlobal IP Ltd. is an affiliate company of Glenn D. Godfrey & Co. LLP and a subsidiary of CILTrust International Inc. based in Belize City, Belize. The company specializes in legal and corporate intellectual property services, for domestic and international clientele. It is a member of international IP networks including INTA and ASIPI. Contact us at: email@example.com
Glenn D. Godfrey & Co. Law has taken swift action to protect the assets of many Choice Bank customers.
Choice Bank LTD., an offshore bank headquartered in Belize City, has provided financial services for international clients since 2008. Until recently, Choice was among the largest banks in Belize, with more than 3000 international corporate accounts and a thriving pre-paid credit card division with over 300,000 Mastercard-branded cards in circulation. Earlier this year, the processor of those pre-paid cards withdrew its license, throwing the bank’s finances into disarray. As a result, on April 9th Choice’s depositors and card holders were surprised by an email announcing that the bank had suspended “all withdrawals from deposit accounts with the bank and other outbound payment activities…until the bank and/or its relevant regulatory authorities…are satisfied that such suspension is no longer required.” In its announcement, the bank attempted to allay the concerns of its customers, describing its liquidity problem as “truly a short-term one” and insisting that “the bank is confident that all its depositors, cardholders and creditors will be kept whole.”
On May 14th Glenn D. Godfrey & Co. Law, acting on behalf of a large group of Choice’s customers, applied for an injunction against Choice Bank. As a result of Godfrey Law Firm’s action, Prime Minister Dean Barrow granted the Central Bank of Belize enhanced oversight powers to ensure that Choice Bank would act in accordance with the interests of its customers. On June 6th the firm filed the sworn affidavit of one of Choice Bank’s international clients who asserted that, despite Choice’s claim that its liquidity crisis would be short lived, it had procured the services of a company to assist in shuttering the bank as quickly as possible and prevent the dissipation of its funds. On June 7th Glenn D. Godfrey & Co. Law filed a fixed date claim at the Supreme Court Registry seeking “an Order that the Defendant, Choice Bank Limited, be wound up by the Court under the provisions of the International Business Companies Act; Costs and such further or other relief as the Court sees fit.”
As a direct result of our law firm’s work, the Government of Belize has undertaken dramatic action to protect the assets of Choice Bank’s customers and depositors. On June 29th, after conducting an unannounced examination of Choice Bank’s offices, the Central Bank of Belize revoked Choice Bank’s license, prohibiting the bank from engaging in any international business. The Central Bank has appointed a liquidator, who will have “full power and authority over the administrative and managerial operations of Choice Bank” and will “distribute [Choice’s] assets in a fair and equitable manner in accordance with the legal priorities.” The liquidation team has launched a website to provide information and assist Choice Bank’s customers in reclaiming their funds. https://www.choicebanklimitedinliquidation.com
The consequences of Choice Bank’s liquidity crisis are still ongoing. Glenn D. Godfrey & Co. is committed to protecting its clients who have suffered from the Bank’s irresponsible business practices. We will update this page regularly with the latest developments in this complex case. If you are a Choice Bank customer or depositor and unable to reclaim your funds, please contact us our team is ready to help you.
News Analysis: Barbados-Mexico Treaty Offers Substantial Benefits for Inbound, Outbound Investments
by Jonathan Brathwaite
When the Barbados-Mexico income tax treaty’s provisions become applicable on January 1, 2010, Barbados will be removed from Mexico’s blacklist of tax havens, and Mexicans will be able to establish Barbados-based structures without being subject to controlled foreign corporation rules and without extra reporting requirements.
Barbados is faring well as an international financial center. After the April 2 G-20 meeting in London, it was placed on the OECD’s white list of compliant jurisdictions, and after meetings with U.S. President Barack Obama at the April 18 Summit of the Americas in April, Barbados Prime Minister David Thompson confirmed that Barbados will not be on any blacklist issued by the United States.
The Barbados-Mexico treaty, signed April 7, 2008, generally follows the OECD model, but Barbados’s special incentive entities still have access to separate key articles under the treaty.
When the treaty’s provisions become applicable on January 1, 2010, Barbados will be removed from Mexico’s blacklist of tax havens. Mexicans also will be able to establish Barbados-based structures without being subject to controlled foreign corporation rules and extra reporting requirements of the Mexican authorities.
Following is an outline of the relevant provisions.
Residence (Article 4)
Barbados law is based on English common law, and residence in Barbados is based on central management and control and likely reflects the ratio of the latest cases in this area, including De Beers Consolidated Mines v. Howe (1905), 5 TC 198 HC, and, more lately, Wood v. Holden ( EWCA Civ 26).
Given that in most common-law countries like the U.S., Canada, and the U.K., the law surrounding residence is in a state of flux, Barbados’s principle of central management and control is as effective as any. No major jurisdiction has yet put residence on a statutory footing.
The test criteria outlined in article 4 of the OECD model are well trodden in case law, and “domicile, residence, place of incorporation, place of effective management, or any criterion of a similar nature” are concepts addressed in many of the key tax law tests and cases addressing residence.
Mexico’s use of seat of management and effective management for tiebreaker purposes should cause no conflicts with the legal concept of central management and control. All of these principles imply a level of substance. As economic substance increases, the line between these concepts begins to fade.
The Barbados-Mexico treaty’s residence article directly refers to domicile, a key legal concept in the tax law of persons resident in Barbados. A person resident but not domiciled in Barbados is not subject to tax on foreign-source income that is not remitted to Barbados.
Mexico has reserved the right to use a place of incorporation test for determining the residence of a corporation and, failing that, to deny dual-resident companies benefits under the treaty. The domicile of a Barbados resident person is not merely an approach used to make that person dual resident. Dual residency would likely require the use of an entity incorporated in another jurisdiction. There are several Barbados entities that can be structured to be deemed nondomiciled.
Subject to Taxation
A Barbados resident that is a nondomiciled person will likely be able to obtain full treaty benefits, albeit subject to the base erosion tests laid out in treaty article 28.
A Barbados person that is resident but not domiciled is not necessarily a special incentive entity.
Permanent Establishment [Article 5, Subparagraph 4(f)]
The inclusion of paragraph 7 in article 5 allows the usual exclusion of a permanent establishment if the person is acting in the other state through a broker, general commission agent, or agent of any other status. However, subparagraph 4(f) is subject to the following provision:
The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of subparagraph (f) of this paragraph.
Although Mexico has reserved the right to exclude this provision from its treaties, it has been retained in this case so Mexico can consider a PE to exist if a fixed place of business is maintained for any combination of activities in subparagraphs (a) through (e) of paragraph 4. This in itself is not unreasonable or unduly material to the use of article 5.
Miscellaneous Rules (Article 28)
Article 28 inserts a limitation on benefits clause in the treaty, which is still relatively reasonable when considering the use of Barbados as an international financial center.
Generally, the benefits of the treaty are available to residents of Barbados or Mexico who are individuals or entities. However, for an entity that is a resident of either country, the treaty benefits will be available only:
- if 50 percent or more of its beneficial interest is owned, directly or indirectly, by residents of Mexico; Barbados or another Caribbean Community and Common Market country; Canada or the United States; the government of Barbados or Mexico; or a public company listed on a recognized stock exchange of one of those countries;
- if it carries on a business and 50 percent or more of its assets are composed of fixed assets (including land and inventory); or
- if the principal objective of its establishment, acquisition, or maintenance and the conduct of its business was not to obtain treaty benefits.
Erosion Test and Substance
Under the base erosion test, no more than 50 percent of the company’s gross income is used to make certain payments to persons that are not described in article 28(1) of the treaty’s ownership test. Payments in this express test specifically refer to dividends, interest, and royalties. No other express payments are outlined here.
Article 28(1)(b) states that resident persons of a state for whose “principal class of shares there is a substantial and regular trading on a recognized stock exchange” may obtain treaty benefits. With the coming implementation of the Barbados international trading platform, special purpose vehicles, mutual funds, and other structured finance entities will be able to receive the full range of benefits under the Barbados-Mexico treaty.
The ownership and erosion test limiting onward payments of dividends and royalties and other payments to non-North American Free Trade Agreement persons, whether directly or indirectly, is circumvented if the Barbados entity uses 50 percent of its assets in carrying on business activities.
Most importantly, special incentive entities in Barbados may access the PE and business profits articles of the Barbados-Mexico treaty.
The access of international business companies, international societies with restricted liabilities, and domestic and international trusts to the business profits and PE articles provides for a wealth of inbound Mexico planning opportunities when it is considered that those Barbados resident entities also have access to the PE and business profits articles of the U.S.-Barbados treaty.
Also, any entities that have a lower or effective tax as a result of domestic Barbados legislation or administrative practice may access all other articles of the treaty, including the business profits and PE articles.
Special incentive entities are expressly excluded from the benefits of the following articles:
- international transport (8);
- dividends (10);
- interest (11);
- royalties (12);
- capital gains (13); and
- independent personal services (14).
There is substantial opportunity to use Barbados for inbound investment into Mexico and for outbound investment of Mexican resident persons.
Barbados’s special incentive entities have full access to the Barbados-P.R.C. income tax agreement. Because China is one of Mexico’s major trading partners, Mexican residents can use Barbados resident entities to establish efficient cross-border business.
Barbados has now concluded 18 income tax treaties. Special incentive entities are entirely carved out only in its treaties with Finland, Sweden, Norway, and the Netherlands.
The business profits and PE articles are accessible under the other treaties Barbados has negotiated, most importantly with the U.S. and Mexico. Full access to treaty benefits for international business companies, international societies with restricted liabilities, and trusts resident in Barbados is available under the treaties with China, Cuba, Venezuela, Switzerland, Austria, and CARICOM countries.
New treaties with Luxembourg and Ghana also have been signed and are awaiting ratification, and negotiations are under way with Brazil, Ireland, India, and Russia.
Jonathan Brathwaite, attorney, Cititrust International Ltd., Barbados