When you mention the high profile names of Dr Stanley Ho and
Nina Wang in Hong Kong, almost everyone will be able to regale you
with stories about how Dr Ho lost his $3bn casino empire and how
Nina Wang's feng shui expert allegedly tried to claim her
rumoured $4.2bn fortune.
In Dr Ho's case, it was suggested that the main cause of the
trouble was when he fell ill, his share of SJM Holdings was then
fought over and divided up amongst his family comprising at least 4
wives and 17 children. According to the media stories, it had
reportedly been Dr Ho's intention to pass his share of SJM to
his second and third wives.
For Nina Wang, media reports described how her feng shui expert
claimed that they had allegedly had an affair for years and it was
Nina Wang's intention, it was maintained, to leave him a
substantial share of her wealth rather than have her family inherit
The problems arose in Nina Wang's case because supposedly
her will made no provision for the feng shui expert. In Dr Ho's
case the ownership of the assets were in personal names rather than
through a more established and reliable asset protection
These two cases illustrate well how important it is for
successful and wealthy businessmen to have a clear and robust
succession plan that lays out how their own personal wealth is to
be divided, when the time arises. With complex international high
value estate planning, structures such as trusts and companies can
be used to ensure that assets are protected and a wealthy
individual is able to determine exactly who inherits which assets
going forward. Such structures offer significant flexibility and
solutions can be designed to accommodate the most demanding of
In the case of the earlier example, one option for Dr Ho might
have been to use a range of companies to separate, hold and protect
his assets. Each company is then owned by a trust.
This structure works from an asset protection perspective and
offers the underlying client many benefits, the first of which is
in the distribution of an estate. Since the assets are separated
into different holding companies, the risk of losing all of them
simultaneously is limited. If an asset is going to be attacked and
a company is sued, only the resources held in that particular
company are under threat.
The owner of the assets will achieve an additional level of
protection using such a solution through the separation of
ownership. With a trust owning all the assets and the underlying
client becoming a beneficiary of the trust, legal and beneficial
ownership is divided. Therefore it makes it difficult to take legal
action against an individual who has settled their assets in this
Trusts can be used to override the local legal and cultural laws
which can be particularly important with, for example some
countries operating forced heirships, which can lead to an
unplanned and unwanted division of assets taking place. Jersey
trusts do not recognise forced heirship regimes and therefore it is
only the named beneficiaries or class of beneficiaries who will
ultimately benefit from the trust's assets as these are
effectively held and controlled from Jersey. It is also possible
with a Jersey trust for a settlor to reserve the power to change
the beneficial class and therefore rule individuals in and out from
receiving trust assets, giving an additional level of ongoing
control and flexibility with planning.
Where estates and legacies are to be protected, robust planning
solutions which go beyond simple civil wills can be essential.
Whilst individuals should always secure tax and legal advice which
reflects their personal circumstances, organisations such as
Vistra, which has an extensive Asian network of offices and are
familiar with providing sophisticated asset protection structures
to a variety of clients, can have a valuable role to play in the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Many people are baffled by trusts, the purpose of which they don't fully comprehend. Some even regard them with suspicion, as tools of of opaque tax evasion strategies of a type favoured by wealthy individuals.
We were recently instructed by a Bank in relation to a regulatory matter. The Bank had made a suspicious activity report to the Financial Investigation Unit ("FIU") due to their concerns about the potential source of funds in an account.
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