Sharia planning, trusts and succession

Effective succession planning ensuring peace of mind.

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Our Singaporean resident client had some concerns he wished to address. Specifically, with two daughters from his marriage and a Sharia law family connection, he was understandably anxious to protect his blood line. He wanted the ability to determine who should benefit from the wealth he had worked hard to generate and control the timing and proportionality of future asset transfers. In addition, having built a successful trading business he recognised, at some point in the future, he would wish to step away and pursue other interests. The challenge was how to achieve this, whilst retaining a level of control; protecting the integrity of the business and ensuring independent professional oversight. The final priority was to ensure that his wife and children had someone to turn to in a time of need, who they felt comfortable talking to, understood the complexity and composition of the wealth and could provide direct support. In conjunction with this, he sought guidance as to how best to educate his intelligent, but not financially sophisticated, wife and daughters with regards to the origin of the wealth and how and when it was intended to support their requirements. This included clarifying the purpose of the trusts and the role Affinity play. It was important the children enjoyed a good education and found a vocation in life, not overly influenced by the significant wealth held.

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Our client was able to alter the ownership by settling a number of trusts; thereby providing a clear path for the succession of the wealth, the consolidation of complex and varied assets and – above all else – ensuring peace of mind regarding their protection for future generations.

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A 10 minute initial conversation (he was in the middle of trading!) has evolved into a 10+ year relationship, founded on mutual trust and a clear understanding of the client’s requirements, dilemmas and priorities.

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Initially a Jersey discretionary trust was established and investable assets settled. Today these are managed on a global basis, by two investment managers, one based in Singapore and the other in Jersey. Affinity appointed an independent firm to review the performance of these investment managers, to supplement the trustees’ oversight – several of whom are investment qualified.  Indeed, as investment savvy trustees, ATL have been able to ensure the trust’s assets are appropriately diversified and include allocations to private equity, tail risk strategies and currency hedging; in addition to more traditional listed exposures to equities and bonds.

As the relationship grew, further trusts and companies were established to hold investment properties culminating in the creation of a Settlor Reserved Powers Trust, which now ultimately owns the client’s business assets. Affinity provide directors and non-executive directors to the trading company board, ensuring the settlor’s concerns about retaining the integrity of the business under professional oversight were achieved.

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Affinity are now involved in at every level of the client’s wealth and have complete oversight as to where assets are held and managed. A file of all relevant documentation has been provided to the family, detailing the composition of the wealth and how it is structured, so peace of mind is ensured in case of the untimely demise of the settlor.

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We regularly travel to Singapore to meet with the family, ensuring we understand their changing requirements and priorities, thereby enhancing the relationship further. We purposefully do not charge for the time we spend visiting them, believing this is an integral part of building our shared understanding and rapport. We appreciate the word trust is synonymous with the work we do – it is not expected but rather is hard earned.