Digital legacy, which encompasses electronic data such as social networks, online accounts, and cloud storage, can be included in wills by nominating someone to manage accounts in the event of a death.

Currently 43% of clients have their financial planners take care of their digital legacy.

Over 80% of clients have been advised to consider their digital legacy by financial planners, according to St James’s Place, but still half of clients have not connected a family member to their financial services, which could create issues for accessing digital legacies after one’s passing.

To read more on this topic, visit: Professional body warns industry about ‘cowboy’ Will writers

A relatively new element within will planning, most clients have found that gaining assistance from a financial planner has alleviated some of the difficulty around digital legacies.

Some 80% of clients said they found it helpful to discuss that element of their will with a planner, and 80% also said they found the discussion made the process “less daunting”.

Eddie Grant, director at St James’s Place, said: “Thinking about legacy planning can be daunting, and tackling this alone can make an already difficult process even more isolating.

“As the world’s digital footprint grows – with notable spikes in digital uptake following the dot.com boom and the pandemic – managing one’s digital legacy becomes an increasingly important part of this process, but is often overlooked.

“It’s important that clients connect their financial planner or accountant with their loved ones or trusted individuals, so they can contact them in the event of your death or incapacitation as this is one of the non-financial benefits of advice.

“Often, we see many people fail to pass over details of their planners, which unfortunately adds an additional layer of distress during an already difficult time.

“As our research has shown, financial planners can help to not only alleviate some this burden, but also offer food for thought, and highlight areas of your digital legacy which you may not have considered having to pass on.

“Having an expert there to walk clients through digital legacy plans can be a considerable help, for individuals and their loved ones.”

This comes after the acquisition of Greystone Trust by Charterhouse Lombard on 2 October 2020.

The merger, which will take effect from 1 October 2023, “represents a pivotal moment for both companies as we unite to form a stronger and more expert financial services team”, the firms added.

The united company will offer a range of trust and wealth management services. In due course, the offices in the Isle of Man will be rebranded as Charterhouse Lombard.

“This merger will significantly enhance our capabilities, and we look forward to leveraging the collective expertise of our teams to continue delivering exceptional solutions to our clients worldwide,” said Chris Broadhead, group chief executive of Charterhouse Lombard.

In a report published today drawing on the experiences of 329 STEP members, it reveals the impact of unqualified advisors in the estate planning sector.

Some 79% said they had come across cases of Wills with errors with 54% coming across firms making false claims about the Wills they are selling to clients.

Of those, 71 people mentioned that advisors had wrongly told their clients that they could avoid care home fees by putting their homes and other assets into a trust.

A third of respondents had seen cases where incompetence has led to significant tax bills with some charges in the tens or hundreds of thousands of pounds.

Further independent research commissioned by STEP revealed that 49% of Brits aged 18 and over do not have a Will, increasing to 65% amongst those aged 45-54.

Sarah Manuel, head of professional standards at STEP, said: “These findings are sadly not surprising. There is no regulation of Will writing in England and Wales. Anyone can set themselves up as a Will writer leaving unsuspecting members of the public without protection. All too often, people don’t realise that they have been a victim of rogue Will advice until it is too late for themselves and their families.

“STEP members have reported many examples of rogue firms and cowboy Will writers charging hidden fees and even appointing themselves as executors to exploit vulnerable clients for financial gain.”

Since its launch in Guernsey in 1977, the firm has further expanded its presence internationally to Switzerland, Dubai and, most recently, the Cayman Islands – providing private client and company services to wealthy individuals, families and corporate entities around the world.

The rebrand to Saffery Trust will bring together the firm’s three core operating businesses – Saffery Champness Registered Fiduciaries (Guernsey), Saffery Champness (Suisse) SA (Switzerland), and Saffery Trust (Cayman) Ltd (The Cayman Islands) – under one unifying brand.

The rebrand is aligned with the name change of UK accountancy firm Saffery Champness to Saffery.

Nick Batiste, managing director of Saffery Trust, said: “Our business has transformed significantly since we first launched in Guernsey almost fifty years ago. Guided by our fundamental focus on client service we have created a modern, multi-jurisdictional firm that is operating at the cutting edge of some of the most dynamic asset classes developed and owned by globally mobile, wealthy individuals and their families.

“It was important for us to evolve our brand in line with this journey – leveraging our heritage and the trusted Saffery name while providing us with the platform to continue to meet the needs and expectations of our clients, and our people, as an independent trusted adviser and leading provider of trust, family office and company services both today and in the future.”

It is far from uncommon, for example, for successful businessmen or women to have been married more than once (or even twice) and to have had several children from multiple marriages. In such families, where status can be of as much importance as the wealth itself, sibling rivalries will often exist to one degree or another. Events within the family can often cause tensions to boil over, not least on the death of a patriarch or matriarch who was also the principal beneficiary of the family’s wealth.

Settling family wealth on inter vivos trusts is generally an effective means of succession planning. By effectively divesting oneself of a substantial part of one’s wealth during one’s lifetime, the settlor can help protect assets against the various claims that can potentially arise on death, for example under the Inheritance (Provision for Family and Dependants) Act 1975 or a challenge to the validity of the testator’s last will.

Trusts also allow settlors to put structures in place that exert a significant degree of ongoing control over how their personal and business assets are administered long after their death in order to minimise the extent to which their wealth is dissipated by future generations.

But the settlor’s control is by no means absolute. Whilst they may continue to seek to influence the management of the trust during their lifetime, it is the trustees who are ultimately responsible for deciding how the trust assets should be applied in the best interests of the beneficiaries, both before and after the settlor has passed away. Between them, the beneficiaries may have vastly differing views on how their individual interests are best served. When conflicts amongst the beneficiaries arise, trustees face the unenviable (and often impossible) task of navigating difficult decisions whilst seeking to preserve their relationships with each of their beneficiaries.

The relationship between trustees and beneficiaries is often finely balanced: over-familiarity with some can lead to allegations of bias; whereas too much distance can give the impression of being out of touch with the family’s needs. Fault lines are easily exposed when difficult decisions need to be made, such as whether to make substantial distributions from the trust fund or whether an important trust asset should be sold. Trust assets, such as a family business or landed estate, commonly hold as much sentimental value as they do in financial terms (if not more), often leading to vehement and competing views amongst the beneficiaries.

Without careful management, disagreements can swiftly lead to a breakdown in relationships and trustees can even find themselves exposed to court proceedings, such as an application for their removal or a claim for breach of trust. Trustees owe their beneficiaries substantial fiduciary duties which it is the inherent jurisdiction of the courts to oversee and supervise. For example, when considering whether or not to exercise their powers, trustees owe a duty to (a) act reasonably and in good faith, (b) take only relevant matters into account and ignore all irrelevant matters, (c) act impartially, and (d) not to exercise their powers for an improper purpose. Any perceived failure by the trustees to comply with their duties can expose them to court proceedings and potential liability for their actions.

Members of the family who are also potential beneficiaries under the trust are particularly exposed to such allegations and possible claims. Even in the most functional families, having family members as trustees can lead to dispute. By way of example, where a trustee has a discretion in the exercise of their powers, we often see two patterns emerging where that trustee is also a family member. The family trustee can feel obliged to be generous to other family members, perhaps feeling awkward in benefitting themselves even though they are entitled.

Conversely, the family trustee can view their role as ‘guardian’ of their other family members which can lead to them overly protecting assets and not releasing funds where there is a disagreement about their proper use. There will also inevitably arise situations where a family trustee faces an inherent and unavoidable conflict between their own self-interest and the interests of the other beneficiaries, which can lead to family disharmony or worse a dispute over the trustee’s conduct.

The influence of other family members, such as spouses and children with differing financial outlooks or status, can also be very difficult to manage whilst seeking to preserve good relations. Should relationships break down altogether, this can lead to deadlock amongst the trustees (who usually must all act unanimously) and ultimately result in costly and potentially protracted court proceedings that can swiftly become out of proportion to the issue at hand.

It is for this reason that families are often well-advised to procure the appointment of an independent professional trustee (commonly a trust corporation), who will generally be better placed to seek to preserve the proper management of the trust and minimise areas of conflict. Depending on the situs of the underlying trust assets and the beneficiaries, there may also be sound fiscal reasons for appointing an independent trustee offshore.

Professional trustees are truly independent from the family and will not have any interest in or personal agenda regarding the trust assets. This in itself can take the pressure off family relationships and reduce the risk of power struggles arising.

This is particularly the case where the settlor of the trust, who kept members in line whilst they were alive, has passed away and left behind the next generation, who may be less willing to cooperate with each other than they were before.

Having a professional trustee to make the difficult decisions and be the one to say ‘no’ to beneficiaries’ requests can allow family members to all blame the professional – this can be a uniting experience for them. Even if there are family members alongside a professional, because trustee decisions usually need to be unanimous, these family members can still hide behind the professional trustee and thereby preserve their relationships with other family members.

Additionally, in certain circumstances, professional trustees may have had the opportunity to take instructions from the settlor or testator direct on the purpose of the trust and their wishes in particular scenarios. This allows professional trustees to understand the ‘spirit’ of their intentions, making it easier for them to know what actions the settlor may have wanted them to take (subject, always, to any relevant changes in circumstance and the trustee fiduciary duties).

Where any decision being made is a significant or controversial one, it is essential that the trustees – professional or otherwise – ensure they obtain the appropriate specialist legal, tax and/or investment advice, not only to inform their decision, but also so that they may demonstrate to their beneficiaries that there is a sound and reasonable basis for their decision.

The beneficiaries are usually also encouraged to take their own independent advice which may then also feed into the professional trustee’s decision making, if relevant. Good communication, sound advice and a strong relationship between the trustees and the beneficiaries will often go a long way to minimise areas of dispute, diffuse potentially emotional situations and ultimately achieve a consensus amongst all the relevant stakeholders.

Nevertheless, there will inevitably be situations where agreement on the trustees’ proposed course of action is not achievable. In those circumstances, the trustees may find they have no option but to initiate court proceedings of their own to seek the court’s blessing of the decision they propose to take. If the trustees’ have exercised their decision-making powers reasonably and in accordance with their fiduciary duties, the court may not interfere in the decision itself and should give its blessing.

In which case, the trustees are effectively protected from potential liability or an application for their removal as a result of carrying out the decision they have made. Whilst court proceedings of this nature should not be embarked on lightly, they can be an effective means of resolving deadlock and allowing the management of the trust to proceed on a more even keel.

This article was written for International Adviser by Sally Ashford and Oliver Auld of law firm Charles Russell Speechlys.