THE DECADE AHEAD: Challenges in international estate planning and cross-border successions
By Nikola Tomašević, CBSA president
The past several decades have borne witness to migrations on an unprecedented scale.
More and more people live and work in countries that are not their country of birth. Triggers include economic migration, fleeing conflict zones, climate migrations, etc. The result is the same – pre-COVID-19 migration volumes are without comparison in history.
Although currently every corner of the planet is under one form of lockdown or another (a containment measure expected to continue throughout 2020), it would be fair to assume that the world and its workings will simply have to get back on track, albeit adjusted to the “new normal” and at a slower pace. The pace of globalization will slow, maybe even falter, but it will not grind to a halt, as the social consequences and economic price of unwinding the most dominant trend in recent history would be unbearable.
The COVID-19 global pandemic has disrupted the way of life on our planet and may have long-term consequences for day-to-day life as we know it.
From a legal standpoint, in only a matter of years, life and how we live it has changed drastically. From generation X, which usually lived in one city, took occasional vacations, had one job and stayed “local”, we have shifted to mostly technology-driven livelihoods. In a legally very complex new globalized world, people live in several places in parallel, enter into a relationship or marriage (or more of them) with persons from another country, they own multiple homes/boats/vehicles spread across numerous geographies. They invest in corporate shares listed on stock exchanges worldwide and are often owners of the off-shore companies. As a rule, business people hold interests in companies in several countries or have accounts in foreign banks. They pay via virtual wallets, bitcoins or other cryptocurrencies, and do business by way of smart contracts. In addition, they use social media for business and pleasure. All of this presents a huge challenge for regulators and legal professionals. The field of international estate planning and inheritance has become much more complex than ever before. The proliferation of issues regarding the application of law, tax implications, conflicts of law puts an ever increasing strain on professionals.
Could our world become more globalized, even in the aftermath of COVID-19?
A pertinent question indeed. One COVID-19 crisis response trend, which we are already witnessing since the onset of the pandemic, is that the world will be less global, in the more traditional sense, and instead become even more digital. While, on the one hand, that may help the trade sector survive, it may further complicate the life of an international lawyer, or an estate planner.
Try to imagine an Italian citizen who died of COVID-19 without a last will and testament. He was married to a Ukrainian national, and together their child, a German national, they resided in Zurich, while having a second home and a boat in Corsica. His ex-wife lives with his other child in the US, in a house they co-owned (50/50). His business operated through a Hong Kong based company registered for drop shipping. He used his private Instagram and Facebook accounts to market the business and most of the payments were made in bitcoin. And yes, he did not share his passwords with anyone prior to his death.
CBSA strives to the certainty in the less global and more digital world.
Quite the scenario but not to worry! Even the most seasoned experts can find a case such as this perplexing at first glance in terms of which law to apply, who would be in charge of administering the estate, whether documents from one country would be applicable in another, where should inheritance taxes be paid or what should be done with virtual legacy. Particularly in COVID-19 times, when his work travel options are very limited.
Mr. Philip Marcovici, probably the most influential wealth management and tax adviser in the world would say “no one knows everything”.
That is the driving force behind CBSA, a customer centered global service providing comprehensive cross-border succession* solutions.
We support our clients around the globe for the journey that lies ahead. We are committed to providing our clients with sound and sustainable solutions for handing down their wealth to future generations and ensure that clients receive their inheritance with the minimum of effort.
* The long standing practice of and cooperation between the network partners allows CBSA to provide tailor-made solutions for each client with multijurisdictional coverage managed through a single point of contact, guaranteeing around the clock availability, efficiency and flexibility.