During the lockdowns and travel restrictions imposed on the world over the past two years, many of us have become acutely aware of the power of our families. Some of us have spent far more time with them than we ever thought (or wanted to be) possible.
In an ideal world, living in such close quarters would strengthen familial ties. However, for some, being so close for such an extended period of time has created the perfect breeding ground for resentment, animosity and sometimes deep hatred to flourish and thrive. The pandemic has created an environment for conflicts to fester and grow into more than just family squabbles and, in some cases, they have metastasized into something much bigger – divorce, disagreements within the family business or disputes over a deceased family member’s estate. These are situations which can tear families apart.
International families often have multi-faceted businesses, assets and relationships and these are all subject to scrutiny following a trauma (be it personal or business related). In one case, we are acting for trustees of a sizeable BVI trust structure, with beneficiaries and assets located throughout the world. Unusually here, there are minor beneficiaries located in Hong Kong, but born via surrogates elsewhere, in respect of which we have had to tackle issues relating to their parenthood, as part of the restructuring exercise.
Protecting your interests and those of your family can help to minimize the potential impact and prevent further damage being inflicted on strained familial relationships.
A situation that we have seen all too often recently arose when a wife, who had been privy to her high-flying husband’s business affairs, was planning to leave him. She and her eldest son (who worked with her husband to operate the family businesses), were aware of worldwide assets that her husband held in various jurisdictions and she was concerned that as soon as she filed for divorce he would transfer those valuable assets out of her reach. To prevent this, we worked together to obtain mirror freezing injunctions and Stop Notices on the same day in London and BVI to ensure that the divorce could proceed fairly, with an appropriate division of all the family’s assets.
Another common catalyst for relationship breakdown are questions over succession. The management, ownership and benefit from familial trusts, estates and assets can cause rifts in relationships, sometimes where they are least expected. Family businesses are often affected when relationships are undone. This can be particularly complex when businesses are structured through companies and / or trusts in offshore jurisdictions, such as the BVI.
Unfortunately, we are frequently asked to deal with the restoration of BVI companies, which were struck off and/ or dissolved (either intentionally or otherwise) whilst still holding valuable assets. Often the dissolution is only revealed following the death of the ultimate beneficial owner. In one particular matter, we are acting for the sons of a wealthy businessman who died intestate. His business was structured through a BVI company, which was the operating company of the family business. Due to his ill-health, the BVI company was dissolved and so a large-scale investigation has been undertaken to assist with the restoration to enable the business to function once again.
In yet another case in Hong Kong, we are acting for a middle-aged lady, who is the long term financial dependent claiming for financial provision against the estate of her very wealthy boyfriend. In this case, the estate claimed that as the boyfriend’s assets, had been transferred to a BVI discretionary trust there was nothing to pay our client. We therefore had to obtain BVI advice as to the lawfulness and effect the trust had on our client.
Having access to advice around the clock is pivotal in these situations, to ensure matters are dealt with in a timely manner and to put a stop to any untoward actions by disgruntled family members.
Whatever your family dynamic or situation, keeping your family together, and rebuilding it when disagreements arise, is of the utmost importance. Whether that means taking action to ensure your estranged spouse doesn’t remove your children from your home or fending off attacks from outsiders who have spotted a vulnerability in your family’s business (perhaps due to a public family spat). Staying alive to and aware of these issues can help protect you – as even the closest of families has the potential to unravel.
For further information, please contact:
Sara-Jane Knock, Partner, Withersworldwide
sara-jane.knock@withersworldwide.com
Billy Ko, Partner, Withersworldwide
billy.ko@withersworldwide.com
