Simon Phelps
Personal & Family Wealth

Third parties or family members seeking claim to your wealth are distressing and complex issues. We will guide you on ways to protect your interests, and your privacy.

I want to protect my wealth

Below are some examples of the opportunities and challenges we respond to on behalf of wealth owners, their families and their other advisers.

I want to protect my wealth from claims by family members.

Carefully considered pre-nups protect pre-marriage assets

When our previously married client, a wealthy entrepreneur, announced marriage plans we advised him – and his fiancée – to prepare a pre-nuptial agreement. They took separate legal advice, and made a full disclosure of all their assets, several months before the wedding.

The courts are more likely to enforce this kind of carefully prepared pre-nup – allowing partners to hold on to pre-marriage assets.

Trusts could help keep wealth in the family

Our client wanted to protect his wealth from his children’s spouses. We advised him to set up a small trust for each child to cover their medium-term needs and a larger ‘dynastic’ trust to provide for all of them – and future generations – in the longer term. The assets in the dynastic trust would have significant protection from claims made by any future spouses.

The children would also be encouraged to make pre-nuptial, or even post-nuptial, agreements. If they didn’t then the trustees could decide not to make distributions to them.

If your will includes surprises, record and explain your reasoning

Our client wanted to leave the family business to the child she felt was best suited to run it. She was concerned that her other children might challenge this decision.

We advised her to do two things, one harder than the other. First, to make a record of the reasoning behind her decision: this would make her Will more difficult to challenge. Second, to explain her decision to her children face to face. A difficult conversation, but one that would help her family accept her wishes.

I want to protect my personal data.

Asset-holding structures can give jurisdictions access to your financial data

Our client had asset-holding structures in several jurisdictions. Personal and financial information on our client would be reported to the authorities in each one under new rules.

We reorganised her structures, and the underlying entities and accounts, in order to limit disclosures and mitigate the risk of information ending up in the wrong hands.

Online security protocols are essential for wealthy families

Our Eastern European client’s business had made him acutely aware of digital security. He noticed that his family’s approach to online communication – between themselves, the family office, and trustees – bordered on careless.

We came up with a double-track solution. We worked with the family and their advisers to agree protocols for digital – and voice – communication, and with security consultants to improve and monitor the family’s data security.

Confidential information needs to be protected from hackers and humans

Our client wanted to keep information about her family and business-wealth confidential.

We reduced the number of people who had access to this data, and the amount of data they could access. We then put strict confidentiality agreements in place – for both office and household staff. Finally, we brought in a digital expert to tighten up online security.

I want to protect myself from potential creditors.

Retaining powers over trust assets can put them at risk from creditors

Our client had put substantial assets into family trusts, and had retained significant powers over the trusts’ assets. He planned to start a new business and the lenders who were to finance it asked for a personal guarantee. This could have given them – via his rights over the trusts – access to the trusts’ assets.

We reviewed the trusts and the guarantees. We amended the trust documents to limit his powers and were able to limit the amount and duration of the guarantees, to protect the trusts’ assets.

Some strategies will help protect your wealth from creditors’ claims

As an active investor our non-UK client knew that business ventures can end in disputes and claims. He wanted to do everything possible to protect his existing wealth for his family. He set up four companies, one for each venture, to give him the benefit of limited liability, and to separate the business.

How do I work with investment advisers to protect the family wealth?

The right investment advisers for a diversified investment portfolio

Our UK resident but non-UK domiciled client had sold a substantial business. She wanted to find advisers who could build and manage a tax-efficient, diversified portfolio of investments.

We arranged a beauty parade of potential managers – the solution involved three managers for different aspects of the portfolio, and a third party tasked with benchmarking and reporting to make sure the overall mandate was followed and fees were managed. We then advised on the tax aspects of the investments.

The right structures can provide offshore income and clean capital

Our client was a non-UK domiciled long-term UK resident with substantial offshore assets.

We helped him do two things. We set up a non-UK portfolio that would generate non-UK income for offshore use and preserve a pool of “clean capital” (money that can be brought into the UK without incurring UK tax), and we created a separate offshore fund – that was not tax restricted – to make gifts to family members over time.

“Asset protection needs to be part of long term planning, not a response to arising risks.”

Marcus Dearle, Partner and Head of Family Asset Protection - Private Client

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