125+ web files in a constantly updated compendium on Bermuda's business, culture, cuisine, customs, districts, economy, education, food, geography, government, history, internet access, laws, parishes, politics, religions, traditions, wildlife etc. For tourists, business visitors, employers, employees, newcomers, researchers, retirees, scholars. Funded by and linked to The Royal Gazette, Bermuda's only daily newspaper.

Bermuda's Executors and their responsibilities

They must be Bermudians and should act impartially, not with religious extremism or favoritism

By Keith Archibald Forbes (see About Us) exclusively for Bermuda Online

To refer by e-mail to this web file use "bermuda-online.org/executors.htm" as your Subject

Who can be an executor, overseas and in Bermuda

The Law of Wills and Estates in Bermuda. 5th Edition. Mello, Michael J., QC, JP. 1993. For local law firm Mello Jones & Martin, by partner Michael Mello. The 6th edition, issued 2008, includes new chapters on the rights of children born outside of wedlock and same-sex couples.

In most countries, including Bermuda, an executor or executrix is appointed in a will to administer the estate after the death of an individual and to ensure that the instructions in their will, when not illegal in any way under any laws, are carried out to the letter. There can be more than one executor or executrix but not more than four. Overseas, the nationality of an executor or executrix is not an issue when he or she is at least a resident in good standing in the local community. 

But in Bermuda, with its very strict controls imposed by Bermuda's Ministry of Home Affairs (including Immigration) on who can and cannot own real estate and under what circumstances, an executor if male or executrix if female must be Bermudian, when dealing with a Bermudian estate and Bermudian persons (testators) appointing executors or executrixes are expected to know this. The Acts concerned include:

• Bermuda Immigration and Protection Act 1956

• Bermudian Status Register Act 1992

• Bermudian Status By Birth Or Grant Register Amendment Act 1993

• Bermudian Status By Birth Or Grant Register Act Commencement Day Notice 1993

• Bermuda Immigration And Protection Amendment Act 1993

• Bermuda Immigration And Protection Amendment Act 1994

• Bermuda Immigration and Protection Amendment Act 2000

• Bermuda Immigration And Protection Amendment Act 2002

• Bermuda Immigration & Protection Amendment Act 2007

• Bermuda Immigration and Protection (Designation of Eligible Condominium Units) Regulations 2007

• Bermuda Immigration and Protection (Rental and Use) Regulations 2007.

Appointments of executors and/or executrixes are official,  their roles must comply with all Bermuda laws including the Human Rights Act 1981 and its amendments, and there are other legal implications.

Adult Bermudians not born in Bermuda of a Bermudian-born parent, or born in Bermuda from a parent or parents not born in Bermuda, will only be regarded as Bermudian if (a) they are on the registered voters list; (b) are on the Register of Bermudians; and (c) - like all Bermuda-born persons who have at least one Bermudian parent - if they have a Bermuda or British-UK passport which includes a stamp certifying they hold Bermuda status.

If the proposed executor or executrix was not born in Bermuda, nor was a parent testator, had Bermuda status once but left Bermuda many years ago to live and work, it is the duty of the testator to ensure he or she or they is/are still registered as a Bermudian, visits/visit the island as a returning Bermudian and not as a visitor, before they can be legally appointed as an executor and/or financial confidante of a Bermudian estate. If they do not or no longer qualify, it will be deemed illegal to make such an appointment.

Without Bermuda Status (local citizenship), persons also cannot buy any real estate as Bermudians can if they can afford it but are limited to the top 5 percent of property in assessed value and a particular kind and type of property only and must pay a substantial purchase tax on top of other taxes; cannot obtain any local scholarships from any organization; if of employable age are not allowed to take any employment but are limited to the kind of employment on a Work Permit approved by the Immigration authority of the Bermuda Government; and may not under any circumstances be an executor or executrix of any Bermudian-owned property not in the top 5% of Annual Rental Value.  Moreover, any non-Bermudian spouses of Bermudians, who have not been living in Bermuda for more than 10 years with their Bermudian spouses, are not allowed under the 2007 Act to own or partially own as part of spousal rights or to be bequeathed in part or in whole any Bermudian homes or land.  The attorneys of testators or legatees are required to tell them this and would-be executors are expected to know this. Non-Bermudians, including those deemed to no longer hold Bermuda Status, may only be executors of Bermuda property which is presently in non-Bermudian hands and as such is in the top 5% in Annual Rental Value. Nor are they - or any other non-Bermudian - allowed to be sole owners of a business in the local marketplace. They are not allowed, as non-Bermudians, or are no longer deemed to be Bermudians, to hold shares in Bermudian companies as Bermudians. They are prohibited from employing any ruse that will enable them to overcome this restriction. If they were once but are no longer Bermudian by Status and hold any Bermudian companies' shares in their names or on behalf of their mother or father or siblings - it is their legal responsibility to declare these to the companies concerned and as required by Bermuda Immigration to divest themselves of these holdings.  All Bermudian companies are required by law to keep an exact and up-to-date register of Bermudian and non-Bermudian shareholders and to ensure that at least 60% are registered as Bermudian shareholders.

Duties of a testator

It is the moral, and may also be a legal in some cases, responsibility of a testator, usually a surviving parent, to avoid problems with any other Bermudian children not also being appointed an executor or executrix by having a family conference beforehand to explain why some are being appointed but not others and getting the others to agree in writing to the appointments to avoid conflicts at a later date. 

Further, the testator should explain 

• what if any financial reward an executor or executrix gets that an non-executor does not;

• whether an executor or executrix is also a legatee (a beneficiary, a person named in a last will and testament to receive property); 

• whether only executors or executrixes, not other siblings, are entitled to know of the financial affairs of the parent testator while he/she is still alive (surely grossly unfair, unchristian and probably illegal to other children who have a legal right to know of their surviving parent's financial situation so as to be on the same wave-length as their other siblings). 

Failure to appoint an executor who is not confirmed by the Department of Immigration as a Bermudian and to go about the other matters in an open and above-board way, could lead to serious implications including having the will invalidated and appointments of non Bermudian executors of a Bermudian estate revoked.

It is recommended to prospective Bermudian testators with more than one child that to avoid any such problems that could have significant effects including splitting up families by appointing some but not others of their children as executors or executrixes, that they instead don't appoint any of them as executors or executrixes but instead appoint a Bermudian bank as their executor and trustee. Or use a firm of Bermuda lawyers, not only to prepare the will but also for the latter purpose. Such an appointment would have the benefit of ensuring absolute impartiality instead of any stigma of religious extremism or clear favoritism and thus obvious, possibly actionable, bias. If a Bermuda bank or Bermuda lawyer is appointed, an executor or executrix should agree with the latter on who does what. 

It is also  suggested that testators and legatees avoid family dispute problems whenever possible by consulting when necessary or deemed prudent the Centre for Community and Family Mediation, Wesley Street, Hamilton, at phone 296-5437.

Duties of a Bermudian executor or trustee

To comply with Acts including all the Bermuda Immigration and Status Acts referred to above, plus:

• Real Estate Assets Act 1787

• Administration of Estates Act 1974

• Succession Act 1974

• Non-Contentious Probate Rules 1974

• Trustee Act 1975

• Stamp Duties Act 1976

• Human Rights Act 1981

• Wills Act 1988

• Wills Amendment Act 1998

To recognize that there are four specific duties, namely to:

• Ascertain the value of the deceased's estate

• Avoid at all costs any evidence of impropriety, such as privately removing and exporting any part of the goods or valuables, even with the permission of the testator and without prior knowledge to and permission of other beneficiaries, because it could legally invalidate executor or executrix status. 

• Pay any taxes due from the estate or from its distribution

• Get the authority to administer the estate from the Probate authority, including arranging any advertising required by law.

• Share out what is left among the named beneficiaries.

If a Bermudian executor is not a resident of Bermuda but of the USA, Canada, United Kingdom, Europe or elsewhere, it will be his or her or their legal responsibility to make a disclosure of his/her/their appointment to his/her/their national and local tax authorities and whether or not he or she is a legatee as well, to the tax authorities of where he/she/they normally live. 

A reputable Bermudian executor or executrix will also

• 1. Recognize that their appointments are to properly and fairly execute the will of the testator when dead, which does not give them and only them (not their other siblings) the legal right to know the financial status of the living testator, even when they may have a specific Power of Attorney to manage finances. They or the lawyer for the testator should know about the conditions attached to an Enduring Power of Attorney and Welfare of Attorney, or Bermuda equivalents, legal arrangements which allow a testator to appoint someone in advance, with due notice to other siblings, to look after money, stocks, bonds, shares, etc and make decisions about their care - but which can only be used if and when the testator loses the capacity to make his or her own decisions. 

• 2. Ensure that their other siblings too, in the interests of family unity, should have equal knowledge of and will share with them the financial circumstances of their surviving parent, the testator, so as to be on the same wave length in all relevant matters. No matter what a testator may wish in his or her desire to appoint favorite children only as Bermudian executors of a Bermudian estate, it does not give the latter the exclusive right to have more rights than other siblings. For executors who ignore this, to apply discrimination at a testator's wish among other siblings who are as law-abiding, may be deemed to be an actionable violation. How can one claim to be a member of a family when one does not act like one? 

• 3. Realize, for beneficiaries with their domiciles not in Bermuda but abroad that no one wants to take any risks with the USA or Canadian or UK or European or other world-wide tax authorities, especially those with present or past links or family or employers in tax havens such as Bermuda and who are or may have been targeted because of this. Having one's name on any offshore shares, without that person properly declaring them, even when not at this time liable for tax, is actionable. UK, USA IRS, Canada etc. tax authorities, their provincial and state and regional tax authorities too now all stipulate they need to be informed by taxpayers. Income taxes levied by one or the other or both in all countries have changed over the years. Originally they taxed a person's world-wide income regardless of who was beneficially entitled to that income, but now a person normally only owes tax on world-wide income to which he or she is beneficially entitled. The consensus is that while you may not or probably will not (as the case may be) pay tax on shares to which you are not or not yet beneficially entitled you will be wrong, according to the authorities, in not declaring them in reasonable expectation one day you'll be entitled or partially entitled. This is the issue. This viewpoint from the tax authorities may seem onerous but it is designed in part to help avoid fraud. If you discover that shares are being held wholly or partly in your name without your knowledge, even when the dividends go solely to a surviving elderly parent, the executor or financial advisor is legally required to let you know about those shares so you can properly declare them. If this is refused, ask why, don't accept it or the potential tax liability. In your own interests, challenge it. It is not an acceptable excuse to the tax authority concerned.  If, as someone domiciled abroad and therefore under that jurisdiction's tax authority you do not do any of the latter, you run the possibly substantial risk of being targeted for the reasons stated earlier. It could involve you in a serious criminal conviction, through no fault of your own, for tax evasion, which could ruin you financially and destroy your reputation. Plus, you will be required, in your own defence, to give your tax authority or authorities the full names and addresses of all persons mentioned as shareholders, for referral by the tax authority that asks you to the tax authorities of the others mentioned. There could also be major problems if you are refused the information you seek to fulfill your tax obligation by any sibling or relative who combines being (a) an executor, (b) financial advisor and (c) principal beneficiary. This information too should be conveyed to the authorities. Financial affairs must be properly put in order for all concerned, particularly where there are multiple tax regimes and jurisdictions involved in family asset distribution planning. Hopefully, those words will be heeded, given that US IRS is cracking down even further with recent legislation, along with the UK, Canada, and Europe. It used to be said that no one will find out. The Luxembourg scandal caught so many global citizens in its loop that tax regimes realized that they can now force new access to banks literally anywhere in the world. "

• 4. Make known the contents of the will after the death of the deceased but before, not after, a funeral. Inevitably, the administration of an estate will occur against an emotional background, with individuals often reacting very differently to bereavement. Making known the contents of the will to the beneficiaries before, not after, the funeral is the fairest and most discreet way to go. Not to do so could put needless expense on those who cannot afford to come from afar unless they have been led to believe they have a reasonable expectation of being a beneficiary. It should be noted that it is not true, only a myth, that there be a formal reading of the will with the executors and beneficiaries all gathered together amid great suspense and possibly acrimony. Such formality happens very rarely, if at all.

• 5. Make all the arrangements for a funeral. Note that unless previous arrangements have been made and paid for while the testator is still living, the executor may be personally liable for the funeral costs. If this occurs, he/she/they are usually entitled to be indemnified from the estate. 

• 6. Recognize that executors are entitled to have their proper expenses paid out of the estate so that the task will not be a financial burden to them.

• 7. Discuss beforehand with family members who will be attending the funeral whether or not the estate will cover their travel expenses, if coming from abroad; will make it clear that all, not just some, family members coming from abroad will qualify, or that none will, to ensure uniform fairness;  where they will stay in Bermuda for the funeral if not at the family home and whether this too will be paid or not; where they will sit at the church service, if in a family group; who will be offering family tributes at the service and in what order. 

• 8. Who stays in the family home for the funeral should not be be on the basis of who is an executor but whether they are a son or daughter and if there is more than one child living abroad either whichever one of them is least able to afford a hotel or, for complete fairness, on a rotating nightly basis.