What is Isle of Man probate, and do I need it?

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What is Isle of Man probate, and do I need it?

Due to the Isle of Man having a long history as an international finance centre, it is often the case that a person dies holding property in the Isle of Man, who did not live in the Isle of Man.

Whether the person who has died held a bank or investment account, shares in a company, or an interest in a trust or life assurance policy, it is unlikely that the financial or fiduciary provider will be able to transfer them to the person entitled, without authority from an Isle of Man court.

The term “grant of probate” is often used to describe as a general term for what lawyers would call a “grant of representation”. Strictly speaking, a grant of probate is only made in cases where there is a will which nominates executors, and is granted to one or more of those executors.

Otherwise, the court is likely to issue a grant of representation called “letters of administration”. If that is the case, instead of executors, the people appointed are termed administrators.

Depending upon the circumstances, an administrator could include a beneficiary of the estate, the person appointed to administer the estate in the country of domicile, or a person acting under a power of attorney from an executor or beneficiary.

Does the grant of probate tell us who should inherit the property?

No, and this is important. The grant of probate, or letters of administration, only show who is authorised by the Isle of Man court to administer the property as executor or administrator, to transfer the property to the person or people now entitled to it.

An executor or administrator is required to distribute the property in accordance with the applicable law governing the estate of the person who has died.

Identifying the law which governs property can be a complex legal issue. For instance, for personal property, such as bank accounts, the law of the country of domicile will govern who will inherit: this may be described in wills, written laws or case law in that jurisdiction. With real property (land and buildings), the law of the jurisdiction where the property is situated is likely to govern who will inherit.

Executors and administrators need to take legal advice, often both in the Isle of Man and the country of domicile, to ensure they distribute the property correctly. If they make a mistake, they could find themselves personally liable for losses.

What does domicile mean?

In common law jurisdictions like the Isle of Man, “domicile” is a legal concept which defines the legal jurisdiction with which an individual is most closely connected. For many people, this may be the country in which they were born, and will never have changed. Other people may have changed their country of domicile, for instance by emigrating and establishing their permanent home in a different jurisdiction.

Care should be taken, as concepts called “domicile” (and similar terms) exist in civil law countries, which can mean different things, such as tax residence, civil registration or simply having a home. In Isle of Man law, domicile is not the same as nationality, citizenship, place of abode or tax residence.

The estate in the Isle of Man is only small – do we really need to apply for a grant?

Financial service and fiduciary companies could potentially be liable for losses in the event they allow property to be passed to the wrong person.

Grants issued by courts in other jurisdictions, even England and Wales, are also unlikely to be acceptable to such institutions to allow the transfer of Isle of Man assets. Isle of Man institutions do not tend to offer indemnity schemes or other alternatives to obtaining probate, meaning that even small estates require a formal application.

Joint property

Where a person dies holding Isle of Man property jointly with another person, it is unlikely that a grant of probate is required for the surviving owner to deal with that property. This is because in Isle of Man law, when a joint owner dies, the surviving owner (or owners) become the legal owner of the property, and ownership does not pass under the will of the person who has died.

What is “resealing” probate?

“Resealing” is a term occasionally used for an abbreviated process in certain common law jurisdictions, in particular England and Wales, whereby a grant from another common law jurisdiction can be recognised for use in the local jurisdiction (i.e. the local court’s “seal” is attached to the overseas grant, making it valid in the local jurisdiction).

The Isle of Man does not have a process for resealing, so the full Isle of Man application process needs to be followed, leading to the issue of an Isle of Man grant, which is a standalone legal document.

How Kinley Legal can help

As an internationally- focused firm, at Kinley Legal we have particular experience in relation to the Isle of Man estates of people who died domiciled in the UK, Ireland, South Africa, Commonwealth countries and beyond.

Kinley Legal works with law firms and professional trustees globally, financial service providers as well as individual beneficiaries to obtain Isle of Man probate and letters of administration. We can also advise on applicable inheritance law to assist executors and administrators validly to distribute estates, and advise on questions of domicile both before and after death.

An Isle of Man address for service is required when making all applications, which Kinley Legal can provide. While certain financial service providers may allow their own address to be used for service, they are not qualified to advise on succession law or to make an application on a client’s behalf.

Please contact us for further details of the requirements, and to find out how Kinley Legal can assist with resolving the Isle of Man estate of your family member or client.