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Experts outline offshore solutions at Swiss fiduciary seminar


The value of life assurance as a succession planning tool and the offshore solutions available to high net worth clients came under the microscope during a seminar in Geneva organised by Equity Trust.

The “Staying Ahead of Fiduciary Risk” event took place at the Swissôtel Métropole Geneva and was attended by about 30 of Geneva’s financial intermediaries, plus hosts from Equity Trust, a provider of trust and fiduciary services.

The opening presentation by John Stone, chairman and founder of Lombard International Assurance, focused on the importance of life assurance as an effective tax and estate-planning solution. He outlined the different options for high-net-worth individuals in respect of transferring wealth to relatives and the implications in respect of tax, and was able to answer a series of testing questions from the audience.

Stone warned the audience about “insurance wrappers”, generic offshore life assurance policies that do not comply with tax laws in most European countries.

“I can’t think of anything worse than the heirs of, say, a French or German family to receive the benefits of a non-compliant, non-qualifying Singapore insurance policy – why would they take it out?” he said.

Stone recommended onshore, tax-compliant life assurance policies that could form part of a sophisticated tailor-made succession planning solution. Such a policy could be taken out on the life of children or grandchildren, offering a longer-term solution, with the policy held inside a trust as an asset.

Taking out a life assurance possibility also offers the prospect of incorporating the policyholder’s wishes in the event of his/her death, enabling them to control the flow of assets after their death.

Nigel Bradley, director of private clients for Equity Trust Geneva, examined the future prospects of the offshore world and considered ways of meeting the concerns of a fictional client who is likely to be anxious in respect of estate planning, possible divorce proceedings and forced heirship.

He said domestic structuring solutions are not viable as there are too many potential international issues involving businesses, bankable assets and property in different countries.

“The offshore world has firms specialising in international planning and providing advice on local and international taxes,” he said. “They can help with issues such as an IPO or sale of the business, and offer confidentiality and a means of avoiding forced heirship.”

Solutions outlined by Bradley included Vista trusts owning a business through an underlying BVI company and the establishment of a family trust for the client’s wife and children.

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