This certainly wasn’t a normal year. The global pandemic ended client meetings and conferences, so trusts and estates work was on pause—or was it?
I contacted my colleagues around the globe and asked: What was 2020 like? Here are some reflections from the four corners of the globe.
Hong Kong
Here are some developments that occurred during 2020:
- The pandemic has Chinese families paying attention to estate planning—typically a taboo subject.
- The escalating China-United States tensions are causing families to look at jurisdictions that might seem financially safer. Singapore is often mentioned.
- The Hong Kong government is working to promote Hong Kong for family offices—but still with a focus on mainland Chinese families.
- Families are reviewing their protocols for risk and governance.
- Lower stock prices are encouraging more privatizations.
- Families are becoming more focused on seeing themselves as business families instead of family businesses.
— Reported by Jeremy Cheng, the Chinese University of Hong Kong
Israel
The Israeli economy had been doing very well prior to the pandemic and related shut downs.
- Trust and estates attorneys, considered “non-essential workers,” were largely restricted from going to their offices or to clients’ homes. Their ability to service clients has been greatly impaired.
- Videoconferencing has been helpful, but not a full substitute for personal meetings, and is difficult for older clients.
- The legislature is responding to the difficulties older clients face: One new law may allow the making of a will without an attorney (although attorneys prefer to review the documents).
- Another law allows those over age 65 to electronically sign an enduring power of attorney.
- A proposed law would allow all clients to sign a will by conference call.
— Reported by Alon Kaplan, advocate and notary, and Meytal Liberman, advocate, both based in Tel Aviv, Israel
England
On the surface it looks like a “pause” with almost no possibility of meeting with clients in person or working in one’s office. Under the surface, though, clients have been busy.
- They’ve had time to restructure private companies.
- They’ve even been simplifying old family trusts.
- Reports from family law departments include a rise in divorces.
- The sense of mortality has prompted new wills, new trusts and new attention on the Next Gen.
- Staying home may become a habit as travel continues to be difficult.
- Finally, negative publicity about the super-wealthy has motivated 83 of the globe’s wealthiest to call themselves “Millionaires for Humanity,” asking to be taxed more heavily.
— Reported by Russell Cohen of Farrer & Co in London
Switzerland
Switzerland is doing well, thank you, and may not be in that much of a pause.
- The opera and cultural activities may have ceased, but the business activity in banks, insurance companies and other financial firms wasn’t very impacted.
- New laws regulating outside money managers came into effect.
- Record amounts of private wealth have been transferred to Switzerland—putting Zurich in the global top 10 for private banking.
- Nearly half of all custody accounts are from abroad, a record-breaking statistic making Switzerland the world’s largest private banking market.
- Due to the perceived good government and health care, many wealthy families want to stay in Switzerland during additional lockdowns, and they’re applying for residency.
- Tax incentives also exist for transfers of intellectual property rights to Switzerland.
- The Swiss franc has appreciated.
— Reported by Ariel Sergio Goekmen-Davidoff, partner at Lindemann Law in Zurich
U.S. Themes
Common themes have also emerged in the United States. The population was unusually preoccupied with the presidential election. Apart from that, we’ve also seen a focus on estate planning, promoted by the impact of the COVID-19 health pandemic. Families had reason to look at their estate planning in a more serious mode than usual. While some multi-faceted trusts increased in number, there was also an increase in simplifying existing trusts.
A number of wealthy families engaged in evaluating and upgrading their risk preparedness. In a conversation I had on Nov. 6, 2020 with Linda Bourn, who leads the Family Enterprise Risk Practice at Crystal, Alliant Private Client in New York City, she told me that her clients faced not only the global pandemic but also damages from wildfires in the western United States and Gulf Coast hurricanes. Her clients were concerned about their risk coverage and recoveries. In addition, with more people staying at home, the online risk of hackers increased.1
Some wealthy families took advantage of the “pause” to spend time strengthening their infrastructure—a specialty of Natasha Pearl, CEO and founder of the management consulting firm Aston Pearl in New York. Many families had lacked a workable disaster plan and were unprepared. Weaknesses included a lack of communication plans with staff, inadequate medical resources and deferred residential maintenance problems. Pearl developed an assessment for those issues: The Wealth Preservation Infrastructure audit.
Personal predictions? We’ve adapted to Zoom (and other virtual) meetings and may not rush to in-person meetings that involve travel. In fact, we may slow down on all rushing. Entertainment from theaters and concerts will be altered to avoid crowded venues. Business travel will decrease; pleasure travel will increase (perhaps even on cruise ships!). Relationships may be more valued. The mood in general will be a more cautious one. With the U.S. election settling down, we may also see a new sense of hope.
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