Private Client Section chair Simon Leney looks at the changes in the air this Spring on a number of fronts: for clients, for solicitors, and for the Private Client Section itself
My comment piece for this edition of PS is on the subject of change, in various respects.
I have noticed a change taking place in relation to prenuptial agreements (or, as they are more commonly known, prenups). Five years ago, these were rare beasts and not regarded as useful, because the courts had traditionally not paid attention to them. But things have changed. There has been significant press coverage about their growing popularity and I, for one, have had a number of clients ask me about them in recent months. So, although this topic may seem out of place in a publication for private client lawyers, I think sharing a little knowledge of the concept and relevance to our clients is worthwhile.
Consider the highly publicised cases of UK individuals being transported to the US to stand trial for alleged breaches of US law, and you will realise why ignoring the scope of FATCA is not the best of ideas!
Interestingly, several of the clients in question have been parents with children who are in the process of getting married. This presumably reflects a social trend of relatively wealthy parents wanting to protect their offspring’s inheritance – because, if my experience is anything to go by, the question does come from the parents rather than the bride or groom-to-be. Prenups, like wills, are mainly of use only when things go wrong, but in at least one case I’ve come across, discussions have been followed by the wedding being called off, as the couple have realised that their life goals don’t match.
Another change exercising many private client groups is the application of FATCA (The Foreign Account Tax Compliance Act) to our work. As a piece of US legislation, it reflects the American approach to the taxation of that country’s citizens: namely, that they must pay US tax on income wherever in the world it arises. The act essentially requires foreign institutions to report income which may become available to a US citizen; and that potentially includes a trust run by you as a solicitor, and of which you are a trustee. Consider the highly publicised cases of UK individuals being transported to the US to stand trial for alleged breaches of US law, and you will realise why ignoring the scope of FATCA is not the best of ideas! Fortunately, help is at hand, because the Law Society’s wills and equity committee will soon be publishing a paper identifying a range of trusts, and how these will be affected. If this change has passed you by until now, you have been warned!
There are also developments afoot closer to home. The relationship between the Law Society’s Section committees and the Society is currently being reviewed, with a view to better defining roles and responsibilities, following an increase in Law Society support. One of the Law Society team with whom I work has described this as an exciting time, and I agree. I believe the result of this process is going to be a more relevant and supportive organisation for you and me in our professional lives, building on what has been a highly successful 16 years since the Section’s foundation. All the Section chairs, including me, will be involved in discussions around governance arrangements, and the Private Client Section committee will also be holding a planning meeting in May, which will lead to our adopting a three-year business plan. We would welcome input from our members on the Section’s offering and focus, so please do email the Section at firstname.lastname@example.org if you have any thoughts or ideas you would like to share.
I am also personally affected by change because, as I write, I am surrounded by boxes as my wife and I prepare to move from our home for the last 20 years. It certainly is a stressful process (we are only moving about 800 yards, for heaven’s sake!) and I now have an insight into what clients go through – even if I do have the advantage of an inside track in respect of the conveyancing process. I have been amazed at the lack of co-ordination of the various service providers, and the levels of communication – or lack of it – between the professionals involved. I now have some sympathy with those who say that there must be a better way (and just in case my hardworking conveyancing partner sees this and thinks this is in any way a criticism of her – it isn’t!).
So, 2014 looks set to be a year of change, which is both exciting and challenging. What I know is that we must continually adapt to survive, and I urge you to remember that fact in the context of the changing business environment in which we operate.
If you want to know more…
… about FATCA, see Anthony Eminowicz’s article in the November 2013 edition of PS.
… about pre-nuptial agreements, see David Anderson and Olga Tabenko’s article in the September 2013 edition of PS.