When and Why to Form a Trust

There are many reasons to form a trust. A trust is a legal device that requires a settlor, the person creating the trust, to transfer assets to another person who acts as the trustee. The trustee has legal ownership but holds the assets for the benefit of beneficiaries. The beneficiaries may receive payments from the trust, such as income that trust assets earn.

Many people set up trusts to avoid problems during probate of their estates after death. Because the trustee has legal title to assets placed in trust, not the settlor, the settlor’s estate will not include these assets. People who use trusts in this way will need to consider what their wills say as well. Many wills include language stating that any assets held by the settlor on death will pass into the trust. In this way, the entire estate is in the trust, often making probate of the will easier or unnecessary. This saves the settlor’s estate and heirs money and time.

Trusts allow settlors to specify exactly how portions of their assets should be distributed, either during their lifetimes or after death. A distribution from the trust to beneficiaries might come with a condition, such as each beneficiary finishing university. The settlor might decide that portions of the trust are distributed at specific points in time, such as when the beneficiaries reach a certain age or on the death of the settlor.

Trusts are useful to save assets for a good cause or keep assets from someone you do not want to have them. For example, you might want to benefit a charity, prevent your estate from going to greedy relatives, or help a minor child save for the future. Trusts also have some tax advantages and can be useful for people who hold assets in several jurisdictions.

Some people view trusts as a way to avoid liability in litigation or to “hide” assets. While trusts may make it more difficult for creditors to find the assets, they may still be able to recover them depending on the type of trust. Anyone considering setting up a trust should consult a qualified attorney.

To find out more about trusts and inheritance law, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

 

The hiring of an attorney is an important decision that should not be based solely upon the information contained in this website.  This website is designed for general information purposes only and the information provided should not be construed to be formal legal advice nor the formation of an attorney/client relationship.

Unfair Dismissal from Employment in The Bahamas

In The Bahamas, every employee has the right not to be unfairly dismissed from employment. Bahamian law contains specific descriptions of possible reasons for dismissal that are unfair. Employees who feel that they have been dismissed unfairly should contact an attorney to discuss their rights.

The law presumes that a dismissal was unfair if the principal reason for the dismissal was that the employee was or planned to become a trade union member, participated or planned to participate in union activities, was not a union member, or refused or proposed to refuse to become or remain a union member. Employment Act, Section 36.

Further, Bahamian law lists specific requirements for dismissal because of redundancy. If the principal reason for dismissal was redundancy but the employee can show that other employees with similar duties would have been in the same circumstances as him but were not dismissed, the dismissal may be unfair. The employee must also show either 1) the union participation or non-participation as described above applies to the dismissed employee or 2) there was a standard redundancy agreement or procedure, and his dismissal did not follow it. Employment Act, Section 37.

Unfair dismissal protections cover pregnancy. An employee has been unfairly dismissed if the reason or principal reason for her dismissal is that she is pregnant, or the reason was otherwise connected with her pregnancy (e.g., for taking maternity leave). Employment Act, Sections 38, 21.

Employees who believe they have been unfairly dismissed may file a complaint with the Industrial Tribunal, a decision-making body established under the Industrial Relations Act. If the employee prevails, the Tribunal may order reinstatement or re-engagement if the employee desires it, and otherwise will make an award of compensation for unfair dismissal to the employee, paid by the employer.

Reinstatement means the employer must treat the employee as if he had not been dismissed, and re-engagement means the employee must be engaged by the employer, or by a successor or associate of the employer, in employment comparable to that from which he was dismissed or other suitable employment. If the employee is reinstated or re-engaged but the employer does not comply with the Tribunal’s order in full, the Tribunal will award the employee compensation.

 

To find out more about employment law, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

 

The hiring of an attorney is an important decision that should not be based solely upon the information contained in this website.  This website is designed for general information purposes only and the information provided should not be construed to be formal legal advice nor the formation of an attorney/client relationship.

Battles over Jurisdiction in International Insolvency Proceedings

When battles over jurisdiction arise in international insolvency proceedings, which country’s laws will take priority? Two recent insolvency cases begun under similar circumstances led to two very different results.

In the first, the Baha Mar group of companies filed for Chapter 11 bankruptcy protection in the United States. All but one of the Baha Mar companies are incorporated in The Bahamas, and the last is incorporated in Delaware. Otherwise, the companies have little connection to the United States. The Baha Mar group of companies simply wanted to take advantage of the debtor-friendly laws in the United States.

Creditors of the Baha Mar group and the Bahamas Attorney General opposed Chapter 11 recognition in The Bahamas, and the Bahamas Supreme Court agreed that the Chapter 11 filing should not be recognized. The Bahamas Attorney General then applied for appointment of provisional liquidators, to which the Supreme Court also agreed.

The Chapter 11 bankruptcy judge had to decide whether to fight The Bahamas’ assertion of jurisdiction and keep the proceeding in the United States. He decided that the creditors and other Baha Mar stakeholders had a reasonable expectation that insolvency proceedings would be held in The Bahamas, rather than the United States. The bankruptcy court rejected the Chapter 11 application.

In the second, a company called PARD and its related companies and subsidiaries filed for Chapter 11 bankruptcy protection in the United States. PARD is a public company incorporated in Bermuda. Related companies are also incorporated in Bermuda. A related company, PAE (BVI) Ltd, is incorporated in the British Virgin Islands and was not part of the initial Chapter 11 filing. None of these companies had any real connection with the United States at all. The only minor connection was the retainer agreement with lawyers for the Chapter 11 filing. The PARD group of companies simply wanted to take advantage of the debtor-friendly laws in the United States.

PAE got into some legal trouble in the British Virgin Islands (BVI) and was close to insolvency soon after lenders to the PARD group of companies succeeded in having a trustee appointed in bankruptcy. Concerned about the ongoing bankruptcy, the lenders sought appointment of a provisional liquidator in the BVI to prevent PAE from filing bankruptcy in the United States along with the PARD group. The BVI court appointed the provisional liquidator, rejecting the PARD group’s attempt to block the appointment and reasoning that 1) since PAE was a BVI company it made sense for BVI to exert jurisdiction, and 2) appointment of a liquidator would not be inconsistent with the Chapter 11 bankruptcy process.

Since the court’s decision, the liquidator and the Chapter 11 trustee have cooperated, showing that international jurisdiction issues can be resolved in a way that protects creditors.

To find out more about insolvency proceedings, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

 

The hiring of an attorney is an important decision that should not be based solely upon the information contained in this website.  This website is designed for general information purposes only and the information provided should not be construed to be formal legal advice nor the formation of an attorney/client relationship.

How Do I Seek Sole Custody of My Bahamian Minor Child?

You can seek sole custody of your Bahamian child. It can be difficult, however, to convince a court that the other parent should not have some access to the child.

In general, Bahamian law permits both parents to a child born in wedlock to have a right of access to their child and considers both parents to be the child’s guardians. When considering custody and access issues, the court takes into account the past contribution of the parent to the care, maintenance and upbringing of the child. Child Protection Act, Section 14.

If you want to seek sole custody of your child, you will need to make an application to the court. The court will decide whether you should have sole custody and what right of access the other parent should have to the child. The court may decide to order that the non-custodial parent pay child support to the parent with custody.

Under Bahamian law the court must always consider the child’s welfare first in making decisions about custody. Child Protection Act, Section 3. Parents who abandon their children or who let someone else bring up their children for so long that they are unmindful of their parental duties often will not be given custody if they cannot show the court that they will be fit. Parents also must provide for their children (known as “maintenance” in the law), and parents who do not do so may be less fit for custody.

In divorce proceedings, the court may consider custody, access, and maintenance disputes between the divorcing couple. Divorces and separations cannot be finalized unless the court has found that arrangements for the welfare of all children involved are satisfactory or are the best under the circumstances, or that it is impracticable to decide as to the children. Alternatively, the court may grant the divorce or separation decree if there is urgency and decide matters relating to the children at a specified later time. See Matrimonial Causes Act.

To find out more about resolving custody disputes, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

 

The hiring of an attorney is an important decision that should not be based solely upon the information contained in this website.  This website is designed for general information purposes only and the information provided should not be construed to be formal legal advice nor the formation of an attorney/client relationship.

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