Joint Tenancy with Rights of Survivorship: Efficient Vehicle for Estate Planning
Offshore companies have long been created to serve multiple objectives, amongst the most beneficial, for estate planning and asset protection. Establishing well-prepared and clearly depicted next steps for family succession and preparing an effective generational transition of assets and inheritance, is best done alongside trustworthy and experienced counsel. For these purposes, the British Virgin Islands (BVI), ruled by Common Law principles, is the sought after and recommended jurisdiction due to offered protection, stability and efficiency.
The essential aspect in incorporating a BVI Company for estate planning, apart from elaborating its Memorandum and Articles of Association, and governing body appointment, is share participation and the shareholding structure. Share issuance and proprietorship defines, in prima facie, the initial path of the inheritance process. English Common Law created and allows the issuance of shares under Joint Tenancy With Right of Survivorship (JTWRS). Under this figure, shareholders are co-owners of the indivisible total of granted shares during their lifetimes or upon death from either, the other remains as such. The share participation shall be considered as a total 100 % (percent) amongst all the unlimited number of owners, these bonded by equal interests, rights, participation and subject to no restrictions by Law.
Issuance of shares as JTWRS
Issuance of shares under JTWRS present no extended formality under BVI Law. They are authorized through a duly executed Director´s Resolution establishing the bonding parties’ names, addresses, and emphasizing their Joint Tenancy with Rights of Survivorship status in the Share Certificate and Company Register of Members.
Benefits of Issuing Shares as JTWRS
Under BVI Law, any share or asset owned in a BVI Company by a natural person, once deceased, must be probated in the BVI jurisdiction, independently from foreign probate processes in person´s the jurisdiction of domicile, these being testate or intestate succession. This requirement demands a prior probate process and resolution from the competent authority from said jurisdiction in order to initiate succession filings at BVI Court.
A probate process in the BVI, and in any other jurisdiction, presents a costly, time- consuming, and a disjointing matter. If not prepared beforehand to avoid a prolonged process, could lead to years for conclusion along with considerable depreciation in asset value.
However, with the figure of JTWRS, upon the death of one of the shareholders, the surviving owner(s) shall automatically maintain their status as shareholders of the indivisible total, without need of a will or succession resolution to determine the ownership of these shares by operation of law. This possibility presents an orderly and efficient manner for bvi company succession and must be complied with in any claim in the deceased person´s jurisdiction of domicile.
Differentiating from a Will, a Private Interest Foundation, or a Company from a foreign jurisdiction, in which a probate process must first culminate, Joint Tenancy is the most automated and efficient estate planning vehicle in it class for transitioning from beneficiary to heirs.
Conclusion
In conclusion, the concept of Joint Tenancy with Rights of Survivorship is a beneficial and differentiating factor between BVI, Common Law jurisdictions, and other estate planning vehicles. This concept is a very beneficial consideration for estate planning purposes.
With no major formalities, the issuance of shares under Joint Tenancy with Rights of Survivorship facilitates automatic succession upon death of the grantor or one of the joint shareholders. It is one of the most cost and time effective vehicles that should always be placed on the table for valid consideration.
