Private Client Review of the Year

Many of our clients have had to contend with the physical and mental challenges created by the uncertainty and disruption bought about by Covid-19. For many it triggered an assessment of what they do, how they do it and what future priorities should be considered. Increasingly there is an international element involving nationality and residence issues, location of assets and succession rules.

A family charter has often been the starting point for succession and estate planning and there has been a growing awareness of their usefulness. It is a vehicle to give all interested parties a voice and together they must work together to set out a long-term vision and goals. They are particularly relevant as families have become increasingly more complex, blended, extended and geographically separated.

The cornerstone in the surge of intergenerational wealth transfers has continued to be trusts and foundations - recognised as essential tools in asset protection. They are established as stand-alone solutions or as part of a larger structure and for many clients the Isle of Man is the preferred jurisdiction as its trust law is both well-established and modern. It has generally followed English trust law, having its roots in English common law principles, but significantly legislative developments provide the protections and flexibility now required by sophisticated, international private clients.

Another trend has been the use of Isle of Man trusts as wealth preservation structures holding luxury assets. Besides yachts, jets, art and cars there has also been a considerable increase in their use for passion assets and collectibles as part of investment portfolios. Growth has evolved in parallel with the development of eCommerce and social media and the number of auctions taking place online has opened a doorway to many new collectors interested in wine, jewellery, comics, stamps, watches, handbags and whisky.

There has been a great deal of interest around Impact investing which isn't new but has gathered energy with sustainable practices being integrated into traditional business activities. Gen X and Millennials have shown an affinity for environmental, social, and governance (ESG) factors as part of the desire to look responsibly towards the future. The Isle of Man is well-placed in this regard as there is a real commitment to celebrating and maintaining the Island's unique environment and it is the only entire nation to be awarded UNESCO Biosphere status.

Our private client team has also seen the links between entrepreneurship and philanthropy grow stronger with many inspiring illustrations combining the two. There are several different options to drive a philanthropic strategy forward with entrepreneurs often fusing together many different combinations including social impact investing, donating a percentage of the sale of a particular item to support a named cause as well as those who establish trusts and foundations.