How to make a small fortune - as the joke goes - start off with a large one!
There are three ways to dissipate wealth quickly; tax, family disputes and third party claims. But you do not have to just sit back and wait for it to happen - you can plan to avoid it. Let’s look at each in turn.
Tax authorities, until 2018, did not have the information they needed to investigate and undermine offshore structures to tax wealth held offshore. This has now changed! The Automatic Exchange of Information introduced in 2018 by all OECD countries gives them everything they need and want to investigate and claim tax.
GFOS works with a family to explore what it would you do if it received a letter from a tax authority which claimed it owed tax on all the income of its wealth held offshore since inception, together with a penalty of 200%?
GFOS asks how would your trustee, if you have one, respond? It explores with the family whether the trustee is the best person to conduct an investigation? If not, from whom would it seek advice; a solicitor, an accountant, a barrister or a former tax inspector and specialist in resolving investigations? How would it pay for this advice, trust funds or from its insurance? How long would it take to resolve: 3 years, 8 years or 10 years – and how much wealth would be left after the investigation?
As a Fellow of the Chartered Institute of Taxation, solicitor and author of ‘When you are Super Rich who can you Trust?’ GFOS is well positioned to know how tax authorities undermine an offshore structure and what to do to protect the assets. GFOS also knows where to seek the best possible advice, how to save on costs and how to stop an investigation going on for years, if not decades.
GFOS also asks what would happen if one or more members of the family were to die or become disabled? How would decisions be made; how would you choose which family members would be given a voice or vote and how would any dispute be resolved?
GFOS reviews the structure and the family to see where family disharmony could arise and how to deal with it.
What would your trustee, if you have one, do on the death of a family member? Would it take a legal opinion, call a family meeting, divide up the wealth and distribute it, how would it decide who was to get what and when?
GFOS also looks at the family assets and asks how they will be distributed such as the family business, family home, the art collection, yacht and private plane?
GFOS recognises that making a decision is not just a matter of being prescriptive – which rarely resolves disputes. In companies, disputes are often most effectively resolved through good governance. GROS therefore seeks to incorporate good governance into all its structures which seeks not only what should be done – but also how and by whom.
Third party claims disputes or threats
Family wealth can also be eroded by third parties.
What would you do if a creditor claimed against the family assets? Family wealth can be protected by trusts, but some families prefer not to transfer international wealth into trust, because they do not wish to transfer control to a professional trustee or third party.
GFOS is fully aware of this concern and asks the family what control it wants and who should it be given to. It then puts in place a trust structure which provides protection for the assets without losing control and in a manner, which reduces the risk of an attack from a third party.
GFOS has thirty years of experience in working with some of the wealthiest families in the world and in numerous jurisdictions. It knows that wealth attracts opportunistic third parties which can lead to years if not decades of disputes and litigation which can be avoided with careful planning and structuring.
As a tax specialist and lawyer GFOS is well positioned to work with a family, review its structure and put in place mechanisms and processes not only to protect the family and its assets but also to make sure it works with the right people to resolve any concerns as and when they arises, to protect your wealth for you and for future generations.
GFOS: provides you and your family with control, substance, good governance, privacy, protection and preservation of wealth, and puts in place the right people to work with you as and when needed.
Caroline Garnham : firstname.lastname@example.org