Succession, Asset Protection & Family Governance

WEALTH PLANNINGSuccession, Asset Protection & Family Governance

Objectives

Wincore advisory Group help families to articulate their objectives and principles to establish the foundation of a sound succession planning, robust inter-generational wealth transfer and efficient family & business governance.

In particular, Wincore advisory Group provide end-to-end and tailored made solutions to successful families related to acquisition, governance, risk management and preservation of their businesses and wealth through generations.

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With over 50 years of combined international experience our private client’s team offers a winning combination of protection techniques for private individuals and corporate clients including:

Solutions to insure confidentiality in high-standing jurisdictions
Advice on asset protection plan prior investment
Governance structuring of underlying businesses through generation
Sharia law mitigation
Estate and gift tax planning & Business succession planning
Assets and business protection planning to preserve confidentiality, privacy and wealth in the event of bankruptcy, divorce or incapacity
Safeguard assets for younger generations
Provision of fiduciary services & Set-up of asset protection vehicles including trust, foundations, companies, fund etc.

DIFC WILL

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A Will encompassing Dubai assets (bank accounts, jewellery, works of art, cars, investment policies, shares of companies, real estates…) only, located or registered in Dubai, could be registered in the Dubai International Financial Center, a Common Law Jurisdiction based on the UK Estates Act and Probate Rules excluding the Sharia law , Wills and Probate Registry (“WPR”) by Non-Muslim individuals over the age of 21 years UAE resident or not under full testamentary freedom (except some restrictions depending on the testator’s citizenship and/or residency) and covering guardianship matters related to minor children habitually resident in Dubai with the testator.
The execution of the will takes place at the time of registration in the presence of a registry officer and one testator’s witness. The Will shall be electronically stored of the Will as a preventative measure against any possible allegations of forgery and to avoid the risk of tampering, loss, and theft.
DIFC Courts adjudicate any contentious probate matters and issue Grants of Probate (legal instrument allowing the executor- the family member, lawyer, friend…-to handle the disposal of the deceased’s assets and debts), court and guardianship orders.

Wincore advisory Group help families to articulate their objectives and aspirations to establish the foundation of a sound succession planning through the establishment of a DIFC Will to mitigate Sharia or foreign succession laws at the dismissal of the testator / legator.

TRUSTS (LOCAL & FOREIGN)

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A Trust is an entity allowing a Third party, the Trustee which could be a private trust company controlled by the settlor (the donor, the client who is vesting his interests into the Trust for the beneficiaries’ benefits; beneficiaries amongst which he could be), to hold assets for the benefit of beneficiaries appointed as per a Trust Deed is the legal framework: The Trust deed instrument specifying the terms governing the Trust, can be drafted in several ways to specify the conditions under which assets should pass to the beneficiaries.
Trust could be used for estate planning, business governance planning, confidentiality planning, investment fund planning, asset protection planning by segregating the family’s private assets from the business ones to limit the reach of the business creditors, securitization purposes, off balance sheets purposes.
Succession, asset protection, and Governance planning could be designed through the use of STAR and Vista Trusts.

Mechanism

The Settlor, the person transferring assets into the Trust, will transfer his property into the Trust by vesting his legal ownership into the Trustee. The Trustee will hold and manage it for the benefit of the beneficiaries by holding the legal ownership over the property called the Trust Fund. The beneficiaries will be holding an economic or beneficial “ownership” depending on the nature of the Trust (revocable, irrevocable, discretionary, fixed interest….).
The Beneficiaries will receive distributions from the Trust and enjoy all the profits and benefits of the Trust. A protector (settlor himself, a family member, a trusted advisor…) could be appointed to protect and watch over the Trustees.

Merits & Main uses of Trusts

A Trust usually avoids probate applicable in case of a will, allowing the beneficiaries to still enjoy the benefit of the Trust despite the death of the settlor (who created and settled property into the Trust) without being subject to obtain probate from a court on the demise of the settlor.

The main benefits of Trusts are :

Protection of your estate
Protection of privacy and confidentiality
Save estate duty
Avoiding probate
Charitable purposes

Avoiding forced heirship rights
Mitigating Sharia Law reach
Protecting Family wealth
Control of your wealth
Business succession planning

Protection from creditors
Tax Mitigation
Reflects your wishes ad literam

Comparative Chart- Trusts & Foundations

FOUNDATIONS ( LOCAL AND FOREIGN)

Parties to the Foundation and Terminology :

Founder person or a corporation that forms the foundation and then transfers assets to the foundation. Can be a beneficiary or a council/board member.
Foundation Council / Foundation Board. The body managing/administering the foundation.
Beneficiary person(s) or group of people who benefit from the foundation. The founder can identify the beneficiary by name, by class or by relationship.
Assets normally called the endowment and are the assets/property endowed (put into/donated/gifted) to a foundation. The endowment does not have to be cash and can include real and intangible assets such as real estate, copyright, patents, jewellery, art, insurance policies, or shares in a company. It is possible to increase the endowment at any time, and by persons other than the founder. There is a minimum value of the endowment.
Secretary Foundations MUST have a secretary (maybe non-resident), Registered Agent / Registered Office.
Guardians are optional safeguards’ or positions in the foundation. They serve as watchdogs’ of foundations and may be granted more powers than the management board. It is a position that can be held by the founder (so that the founder retains ultimate control).
By-laws this is an optional and private document that specifies how the foundation is to be managed. This is not filed for public scrutiny. The By-Laws of a foundation may include instructions for the management board that pertains to the management, distribution or application of assets. Guardian or Protector or Supervisory Board.
Foundation Charter / Memorandum of Establishment contain name of the foundation, name and addresses of the founder, Type of foundation, Name and address of registered agent, initial capital or value of assets to be transferred into the foundation. The charter may be amended during the life of the foundation.
The life of the foundation (foundations normally have indefinite life, but maybe limited in duration).

Merits & Main uses

A Foundation usually avoids probate applicable in case of a will, allowing the beneficiaries to still enjoy the benefit of the Foundation despite the death of the founder without being subject to obtain probate from a court on the demise of the founder.

The main benefits are :

Protection of your estate
Protection of privacy and confidentiality
Save estate duty
Avoiding probate
Mitigating forced heirship rights
Limiting Sharia Law reach or applying Sharia Law principles

Protection from creditors
Tax Mitigation
Charitable purposes
Reflects your wishes ad literam.

Wealth planning & inter-generational legacy structuring
Long term holding structure of income generating assets (businesses, real estate portfolios)
Asset protection (forced heirship rules, creditors, divorce, hostile takeovers)
Charitable and non-charitable purposes

ADGM foundation

DIFC foundation

Rak ICC foundation

Comparative Chart between Trust and Foundation

Current Structuring

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Mechanism

The Founder will transfer his property into the Trust by endowing his properties into the Foundation. The Foundation will hold and manage it for the benefit of the beneficiaries by holding the legal ownership over the property called the endowment.
The Beneficiaries will receive distributions from the Foundations and enjoy all the profits and benefits of the Foundation. A guardian (founder himself, a family member, a trusted advisor…) could be appointed to protect and watch over the Council of the Foundation.

Improvement

Asset protection by ring fencing all operative companies’ assets and liabilities under one Holco umbrella and thus protecting Family’s directly owned assets toavoid probate or creditors’ actions.
Governance planning through consolidation of operative companies under single HoldCo umbrella structure –(DIFC SPC or ADGM SPV, held by DIFC/ADGM Foundation)
Governance planning by maintaining full Family and Patriarch‘s operational control
Cost effective and fast decision implementation of decisions under a single common law jurisdiction
Distribution of income in compliance with Sharia principles or freedom of disposal

Wincore advisory Group help families and businesses to establish succession, asset protection and Governance vehicles through its employees who have been administrating and establishing Foundations for over 10 years and are holding the best STEP (UK Society of Trust and Estate Practioners) qualifications in estate planning.

Outcome of restructuring

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ADGM FAMILY OFFICES

Family offices are arguably the fastest-growing investment vehicles in the world today, as families with substantial wealth are increasingly seeing the value of establishing a centralized function to manage their family wealth and business interests. There is no obligatory product or structure. The term refers more to a concept encapsulating a variety of structures established to manage family wealth, and in each case, a bespoke solution should be applied.

The core activities of a family office arrangement involve the centralized management of wealth derived from one or more families. Nuances arise with distinctions in the decision making hierarchy and how influence is distributed throughout the family structure. Often these family structures will have a broad range of business interests, with management responsibilities and ownership entitlement spread across multiple family members, which can make them complex.

Key Features and Benefits

100 % tax exemption on corporate income, for more than renewable 15 to 50 years period.
100% free repatriation of capital and dividends.
100% tax exemption on capital gains.
Large network of double tax conventions.
No withholding taxes, No inheritance tax, No exit tax.
100% transactions confidentiality.
No public register of Directors and Shareholders.
Corporate Shareholders allowed.