Creating a Legacy

Featured Blog Image

As the world's baby boomers contend with retirement and private client advisers are responding to increased demand for estate planning and international wealth transfer, ILS World Private Client Team looks at the trends utilising Isle of Man structures.

Future planning tends to come to the fore as retirement looms, but it is not the only factor. Unexpected life events happen at any age and thoughtful continuity plans ensure the right people inherit, business operations continue to run smoothly, and owners are able to exit under fair circumstances.

In the US alone there are more than 76 million boomers who have seen the physical and mental challenges created by the uncertainty and disruption bought about by Covid-19. For many multigenerational families it has triggered a review of what they do, how they do it and what future priorities should be considered.

Reviews have included deciding how best to look after young children, vulnerable adults, reducing estate taxes and reducing the complications of probate and power of attorney. Increasingly there is an international element involving nationality and residence issues, location of assets and succession rules.

A family charter is often the starting point for succession and estate planning and there has been a growing awareness of their usefulness. It is a vehicle to give all interested parties a voice and together they must work together to set out a long-term vision and goals. They are particularly relevant as families have become increasingly more complex, blended, extended and geographically separated.

The cornerstone in the surge of intergenerational wealth transfers are trusts and foundations – they are essential tools in asset protection. They are established as stand-alone solutions or as part of a larger structure and for many clients the Isle of Man is the preferred jurisdiction as its trust law is both well-established and modern. It has generally followed English trust law, having its roots in English common law principles, but significantly legislative developments provide the protections and flexibility now required by sophisticated, international private clients.

Another driver has been the use of Isle of Man trusts as wealth preservation structures holding luxury assets for future generations. In addition to yachts, art and cars there has also been a considerable increase in their use for holding passion assets and collectibles as part of investment portfolios. This growth has evolved in parallel with the development of eCommerce and social media and the number of auctions taking place online has opened a doorway to many new collectors interested in wine, jewellery, watches, handbags and whisky.

Impact investing has also been contributory factor – it is not new but has gathered energy with environmental and social efforts being integrated into traditional business activities. Gen X and Millennials have shown an affinity for environmental, social, and governance (ESG) factors as part of the desire to look responsibly towards the future. The Isle of Man is well placed in this regard as there is a real commitment to celebrating and maintaining the Island's unique environment and it is the only entire nation to be awarded UNESCO Biosphere status.

Advisers have also seen the links between entrepreneurship and philanthropy grow stronger with many inspiring illustrations combining the two. There are several different options to drive a philanthropic strategy forward with entrepreneurs often fusing together many different combinations including social impact investing, donating a percentage of the sale of a particular item to support a named cause as well as those who establish trusts and foundations.

Find out more about why the Isle of Man is the natural choice for Excellence in Finance.


  • Recent Posts