Succession
Nominated for 25 Emmy Awards this year, the HBO series ‘Succession’ has captivated audiences and may well have prompted clients to contemplate how best to plan for succession to their estates.
Drafting a Will for lead character, Logan Roy, would require a bespoke approach, to take account of his vast wealth across multiple countries. Here we consider an appropriate Will structure, together with some other key points to explore when creating a fitting testamentary writing for Logan.
Discretionary Will Structure
A traditional Will is very prescriptive and leaves assets to particular named beneficiaries, e.g. to your spouse whom failing your children. Nowadays Wills can be far more dynamic. In particular, a discretionary Will structure means that rather than naming set beneficiaries, you direct your entire estate (or part of it) into a discretionary Trust following your death, to be managed by your Trustees for the benefit of a named group of beneficiaries. None of these beneficiaries has any fixed entitlement and it’s up to the Trustees to decide who receives what and when. If Logan opts for this format of Will it is therefore vital that he gives detailed consideration to who he appoints as Trustee.
Wills incorporating a Discretionary Trust can have particular value to clients for multiple reasons, including, for example:-
- Allowing significant flexibility, particularly where the financial position and circumstances as at date of death are unknown.
- Allowing a more tailored approach to inheritance whereby it may be suitable to benefit children and grandchildren, rather than passing the estate to the surviving spouse. This can also help safeguard a portion of the deceased’s estate from exposure to financial assessment for care home fees – an issue of great concern to many.
- Protecting wealth from falling into children’s estates where there is concern that it may later be caught by provision on divorce or bankruptcy.
- Various tax planning advantages.
In Logan’s case, all of the above could be potential motivations for engaging with this type of planning. There are, of course, a few things that could be added regarding Logan’s potential situation but they would be #spoilers …
Further Considerations
Foreign Property
As viewers will know, Mr Roy has heritable property in more than one country. It should never be assumed that a Will properly executed in your country of residence will be given effect abroad and so finding out if and what foreign assets a client owns is important.
Under international law, it is the law of the country in which the heritable property is situated that will govern its succession. It is therefore crucial to create a further Will in that jurisdiction. Failure to do so may incur cost and difficulty for a family members following the death of the testator and ultimately lead to the property passing to unintended beneficiaries.
Where there are multiple Wills in different countries, it is also important that the solicitors work together to ensure that the latest Will does not inadvertently cancel out the existing Wills already in place. Clients are therefore encouraged to seek appropriate legal advice in each jurisdiction where assets are held.
Domicile
Modern Wills can often contain a declaration of the testator’s domicile and practitioners should explore this with the granter before a Will is signed. Whilst such a declaration can be of assistance, it is not absolute. In the show, we know that whilst Logan was born in Dundee, Scotland, he now lives in New York, being the headquarters of his business empire.
Letter of Wishes
It is strongly recommended to clients that a non-binding Letter of Wishes is drafted to sit alongside any discretionary Will, to set out the granter’s preferences and wishes for the division of their estate to their Trustees, along with any particular considerations or circumstances to be navigated. For example, Logan may wish to include his thoughts on who he would like to become acting Chair and COO of his American conglomerate, Waystar Royco, in the event of his demise, or simply state his preference for the inheritance of his luxury superyacht.
While Logan Roy’s lifestyle and business interests may be hard to reconcile with your own experience, it should be remembered that Succession Planning is not just for the super-wealthy and many would benefit by talking to a professional adviser about ways to plan for the future.
For more information on bespoke estate planning please contact a member of our Private Client team.
