Mauritius, a better jurisdiction for estate planning by Me. Arun Kutowaroo
Me. Arun Kutowaroo is a Barrister-at-law called to the bar at the Lincolns Inn in London and he was admitted to the Mauritian Bar in January 2009. He has extensive experience in trust and estate planning and has completed the Qualified Practitioners Route. He has recently been awarded the Worldwide STEP Excellence Award 2020 which recognises the best and brightest practitioners worldwide. We invite Me. Arun to share his perspicacity and solutions on estate planning.
What is Estate Planning?
Estate Planning is the ability to plan one’s succession without the need to leave everything to the operation of the law. One has the ability to plan, in their living, for the assets that one possesses, for the benefit of the heirs. Should one postpone the estate planning till old age? Or should one start now? The recent events have demonstrated that life is indeed fragile and dependent on factors beyond our human control at times. The sooner one starts planning one’s succession, the better it is. The icing on the cake is that it does not have to be cumbersome nor does it have to be in deprivation of the current peaceful enjoyment of the property of the settlor/ testator. A Revocable Trust might be the solution. Further, other solutions might even offer solace to the heirs, during the life of the settlor/testator. Asset Protection Trusts and Foundations can shield the heirs from situations of bankruptcy. Some clients wish to maintain control of the trust through additional structures, as the family assets might belong to more complex and extended family units. The laws in Mauritius allow for the family members to set up which acts as trustee in the trust. This enables the family member to have a say in the manner in which the assets are managed without any allegations of mismanagement against members of the family. It further allows better visibility of the family members on the assets and how they are managed.
Why is Mauritius a better jurisdiction for estate planning?
Unlike some other financial centres which have adopted the Trust laws as a matter of foreign law, the Mauritian Legislator has also provided an additional safeguard through the inclusion of the concept of “Fiducie” in the Mauritian civil code. The Mauritian civil code is a vestige of the French colonial past and the section of “Fiducie” finds its equivalence in the French Civil Code. Furthermore, Mauritius is a prized destination for the flexibility of its estate planning laws, private laws and the huge network of DTAAs. The chalets in Switzerland, the stock in Hong Kong, the house on Hyde Park in London as well as the gold certificates in Dubai can all be held under one Trust. The fact that there is no need for a blood relationship between the settlor and the beneficiary for the Trust to be valid, ensures protection to people for whom the settlor/testator would be able to cater even for eventual beneficiaries who might not even be related to them. It is worth noting that the Mauritian Trusts Act allows for the dissection of the duty of the trustee into the Managing Trustee and the Custodian Trustee. This lends way to more flexibility in the management of assets, depending on their location.
To conclude, I can say that a good estate planning can avoid inconveniences in the future. Impact of sudden events like death and insolvency can be mitigated through good estate planning.
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