Asset Protection Solicitors

Mr A is widowed with two adult children from that marriage and approached us as he is due to remarry. Mr A’s children are married with children of their own. Mr A’s son is in a trading business with Mr A. Mr A also has some property businesses which are in both limited companies and partnerships. Some are with his son, and some with his siblings.

Mr A wanted to ensure that if the new marriage breaks down, his assets are protected for his children, as his wealth was built up with his deceased wife. He especially wants to protect the trading business, which is his son's livelihood. Mr A also wants to prevent any claims being made against his estate by his new wife should he die first, but if they are still together, he wants to provide her with somewhere to live and an income for her to live off.

Once the trading business has been dealt with, Mr A wants to equalise his estate between his son and daughter to ensure fairness. The assets in Mr A’s estate total around £12 million and therefore inheritance tax is also a consideration.

Our Private Wealth team collaborated across the disciplines to ensure that the client received cohesive legal advice on both his personal and business assets for the purposes of succession whilst planning for “worst case scenario”. Mr A valued the importance of forward planning to avoid family disputes at a later stage along with associated costs which easily escalate in litigation.

We reviewed and drafted a prenuptial agreement following full disclosure of the financial position of both parties to ensure that a fair agreement was reached if the parties were to divorce. Financial provision was provided to the new wife to meet her reasonable housing and income needs. The wife was legally represented separately to ensure that she understood the impact of the prenuptial agreement upon her.

With regards to succession planning on Mr A’s death, we prepared new Wills in contemplation of marriage to complement the prenuptial agreement. Trusts were used both within the Will and during lifetime to reduce the estate for inheritance tax purposes as well as asset protection.

We also reviewed the structures of the businesses and associated documentation (partnership agreement, shareholders agreement, cross options and articles of association) to ascertain what would happen in relation to the succession of each of those businesses on various life events happening. We updated the constitutional documents incorporating provisions dealing with for example, the transfer shares, valuation and the compulsory transfer of shares by certain shareholders to Mr A’s children in the event of divorce and other change of circumstances. Provisions in the constitution dealing with the transmission of shares on death were also updated to

ensure that there was no conflict with the terms of Mr A’s Will. For example, where business interests were to be gifted under the terms of Mr A’s Will, the relevant constitution of the business concerned was updated to permit this arrangement.

Separately, Mr A also obtained tax advice about estate planning. As a result, Mr A established a family investment company to mitigate inheritance tax and pass wealth down to the younger generations of his family. Mr A, together with family members from different generations, were all shareholders of the new company. The rights on the shares were such that Mr A retained voting control over the company during his lifetime. We advised Mr A on the rights attached to the shares to be held by different family members, the constitution for the new company and we also dealt with the issue of shares to the various family members. The initial funding to the new company was provided by Mr A and the shares were issued as a gift to other family members.