For high-net-worth individuals and families with assets across multiple countries, succession planning is no longer a simple matter of drafting a will. According to a Citi Private Bank report, 40%of HNWI families will undergo significant leadership transitions within the next five years, a significant number, yet the legal, tax, and cultural differences between jurisdictions can create complications that, if not addressed proactively, risk disputes, delays, and unnecessary financial losses. In today’s globalised world, a strategic and structured approach to succession is essential.
Succession laws vary significantly between jurisdictions, particularly between common law systems such as those found in the UK,US, Singapore, and Hong Kong, and civil law systems like Switzerland, China, France, and Germany. In common law jurisdictions, individuals enjoy ahigh degree of testamentary freedom, enabling them to allocate assets largely according to personal wishes via wills or trusts. In contrast, civil law systems often impose forced heirship rules, mandating that a portion of an estate must go to direct heirs such as children or spouses, irrespective of the deceased’s intentions.
These legal differences can create considerable challenges. For example, assets located in Switzerland may be subject to forced heirship rules even if the individual resides in a common law jurisdiction. Without careful planning, this can lead to conflicting interpretations and outcomes, freezing of assets during probate, and uncertainty around inheritance tax liabilities.
Testamentary freedom allows flexibility, however the probate process under common law can be both lengthy and complex. Assets are distributed in accordance with the deceased’s will, subject to court supervision. This process can delay the transfer of wealth and it may take sometime before there is clarity on tax obligations.
By contrast, civil law succession often grants heirs their entitlements immediately upon death, offering predictability, also in tax matters, however, it limits flexibility.
When the deceased held assets in multiple countries things can become very complicated – even more so when those countries are governed by different inheritance regimes.
When families hold assets in both common and civil law jurisdictions, they are exposed to a number of risks:
· Inheritance disputes due to varying laws dictating who is entitled to what.
· Delays in probate as courts navigate jurisdictional conflicts.
· Double taxation, particularly when estate planning has not accounted for the tax implications in all relevant countries.
· Risks to minor heirs, as civil law may automatically transfer assets to minors, while common law requires structures such as trusts to manage this process responsibly.
These issues highlight the need for a global, coordinated succession strategy that addresses the nuances of each jurisdiction where assets are held.
One of the most effective tools in international succession planning is the use of trusts. A trust allows individuals to transfer assets to a trustee, who holds and manages them on behalf of beneficiaries according to specified terms. This structure can be particularly effective in managing and streamlining the transfer of assets, and ensuring privacy and control over distribution.
Trusts also provide protection for vulnerable beneficiaries, such as minors or individuals with special needs, and assets settled into a trust during the lifetime of a settlor will not form part of his or her estate on death and will therefore not be subject to probate or similar administrative processes. By placing assets in a trust governed by a favourable legal system, individuals can exercise greater control and reduce the impact of conflicting succession laws.
At Alpadis, we work with individuals and families to craft comprehensive succession plans that reflect their personal wishes while ensuring legal and tax compliance across all jurisdictions involved. Our services include:
· Establishing trusts and foundations tailored to each client’s family structure and asset profile.
· Providing expert guidance on local inheritance and tax laws, including forced heirship rules.
· Coordinating with legal, tax, and financial advisers to ensure that all structures are sustainable and compliant.
· Offering family governance advisory to foster long-term cohesion and avoid internal disputes.
We also support families in identifying potential risks and structuring their wealth in ways that are resilient to legal, tax, and family changes. By integrating succession planning into broader wealth preservation strategies, we help our clients safeguard their legacy across generations and borders.
Succession planning in an international context requires more than a will. It demands careful consideration of diverse legal systems, tax regimes, and family dynamics. With the right planning and structures in place, especially through the use of trusts, families can avoid costly legal procedures, protect vulnerable heirs, and ensure that their legacy is passed on according to their wishes.
Alpadis stands ready to guide families through these complexities, offering tailored solutions and peace of mind.
