Fiduciaries
Are your trustees or protectors or other fiduciaries the right people for the job?
What checks and balances are in place to monitor fiduciaries?
Are you aware of all the factors that may impact on distribution decisions?
Do you have a fiduciary succession plan?
Are there tax risks associated with where the fiduciaries are based, where they take decisions or where they meet?
Fiduciaries are entrusted with great wealth. Understanding all the issues that face them today is a daunting task. Even within a single jurisdiction, complex rules regarding investments, accounting and taxes abound, and new compliance issues and reporting obligations seem to spring up every day. The issues facing fiduciary structures with beneficiaries in multiple jurisdictions are even more complex.
A trust or a foundation is a legal instrument or entity, but by definition it is totally dependent on the people who administer it. And no matter how carefully you structure a long-term ‘dynasty' fiduciary structure, it is only as good as its fiduciary succession plan. Such a structure is designed to span generations, and therefore to outlast its grantor and its original fiduciaries. If the fiduciary structure is both complex and of long duration, the plan needs to be more than a simple list of potential candidates of successor fiduciaries. Over the generations, such a structure may need to be administered by people the grantor will never have met.
Our wealth structuring team regularly advises clients about the tax implications of the status of their trusts, foundations or other fiduciary arrangements, the choice of fiduciaries (be they trustees, directors, protectors or others), or distribution decisions. Additionally, we often help to modernise antiquated structures so that they can invest efficiently and reduce administrative costs.