Focuses for Trustees with the New Year
The turn of the calendar year hasn't made our global challenges go away. In fact, especially from a US perspective, things seem to be getting all the…
By Francesca Ffiske / February 05, 2021
The turn of the calendar year hasn't made our global challenges go away. In fact, especially from a US perspective, things seem to be getting all the more complicated with events like the riot at the US Capitol on January 6th and President Trump's subsequent impeachment. This is indelibly connected to the private wealth industry as political upheavals impact policies, which in turn impact laws, which impact perceptions and views and will almost certainly lead to more paperwork crossing the desks of lawyers, advisers and trustees.
Connected is the fact that we are entering a phase where inequality is in huge focus as a result of the events of last year. Tax initiatives will almost certainly come into place to address these discrepancies that have become more more apparent. Trustees should be ready for their role within these changes, and be aware of their beneficiaries' opinions on the issues as the wealthy face greater scrutiny.
So, what are some key things that Trustees could be considering as we enter 2021 after such a tumultuous year?
How will trust funds be impacted by taxation in the months ahead? Taxation changes should be expected in several jurisdictions for many reasons, particularly the pandemic. In the US, the Democrats are poised to control both the House of Representatives and the Senate; which leaves huge scope for change. As far as the UK is concerned, there is skepticism surrounding a potential one-off wealth tax, although this might have changed. Trustees need to keep an ear to the ground: tax changes are rarely broadcasted in advance, but it would be remiss for Trustees not to be paying attention to structural changes, consulting their beneficiaries, and looking at their trust funds and considering what steps could be taken to plan ahead.
Consult with the beneficiaries of the trusts themselves. As a Trustee, now would seem to be a good time to consult with beneficiaries to see what the world looks like to them. Have their own circumstances changed? Have they had any changes to their domestic arrangements, relationships or families? How do they feel about enterprise opportunities? Perhaps, given the state of the world, they are more interested in a philanthropic space – could they want their trustees to be thinking that way rather than in a more capitalist vein? What is their appetite for litigation?
Look inwardly within your own organisation. The beginning of the year is a good time for an internal litmus test: especially after such a challenging year for businesses. How is the business operating now, and what's changed? How have relationships with regulators changed, and how are they working these days? What are their priorities within each jurisdiction? A concerted effort must be made, even more than usual, in a world that has been boxed into the virtual sphere – which, while functional, is less than ideal.
With thanks to Craig McIntyre, Conyers Dill & Pearman, for his participation in our Global Elite Membinar in January.