Sunday, October 6, 2024
Wealthy Families Increasingly Question Where in the World to Keep Their Assets
Ultra-wealthy families are increasingly faced with the challenge of deciding where to locate their assets as their businesses and family members spread across multiple countries. Traditionally, these families managed their wealth through a single-family office in the country where their business was based. However, globalization has introduced new complexities, making it necessary to professionalize decisions regarding asset location. A report by Citi Private Bank, which works with 1,800 family offices, highlights this growing trend.
Citi's clients are often global, with 53% having assets in multiple countries and 44% having family members spread across various nations. Changes in tax regulations, particularly in Europe and Latin America, could further drive this global movement of wealth. Citi emphasizes four key criteria for selecting a family office location: political and economic stability, financial and legal infrastructure, access to talent and cost efficiency, and convenience based on where family members live and work.
Wealth centers like the U.S., Switzerland, and Singapore are commonly favored for their robust infrastructure, but other jurisdictions, such as Monaco and the Bahamas, are also popular due to their favorable tax systems and strategic locations. Some ultra-wealthy individuals adopt "tax nomad" strategies, legally managing their residency across different countries to minimize tax liabilities. As the global landscape becomes more unpredictable, families are advised to plan for contingencies, including securing backup locations through residency programs in countries like Spain and New Zealand.
For more information see Abby Schultz, "Wealthy Families Increasingly Question Where in the World to Keep Their Assets" Barron's, September 24, 2024.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
https://lawprofessors.typepad.com/trusts_estates_prof/2024/10/wealthy-families-increasingly-question-where-in-the-world-to-keep-their-assets.html