Trust Estate
Families Are Becoming More Complex, But Laws Haven't Kept Pace - STEP

The world is becoming more complicated in certain ways, and that includes families and living arrangements. When it comes to financial and estate planning, however, the laws and the language governing them haven't matched the changes, breeding potential problems down the line, so the report says.
Modern families are becoming so complex - often straddling
national borders - that laws and legal terms aren’t keeping pace,
raising the risks of conflicts down the line, according to a
global report.
A study of 613 lawyers, tax advisors, wealth managers and
trustees finds that almost two-thirds (63 per cent) of them say
that “complex” families with cross-border and mixed ethnicities
make up a large chunk or even a majority of their work. Adding
that existing laws and legal language often don't keep pace with
the change.
The report, issued by the
Society of Trust and Estate Practitioners, (STEP) sheds light
on how intricate and varied trust and estate planning work
operates in a world where capital and people remain highly
mobile.
Some 73 per cent of respondents - drawn from around the world -
reported large rises in the number of so-called “blended”
families seeking advice from them in the last ten years, and
now, to some degree, 96 per cent advise these families.
“Families are evolving fast, no longer constrained by creed or
culture, gender or geography. But modern families can be complex,
challenging, diverse and all over the map – often literally.
Planning for their financial futures requires expertise and
collaboration across borders, cultures and professions,” Emily
Deane, technical counsel at STEP, said. “Unfortunately,
legislation has failed to keep pace with the times, especially in
key areas like cohabitation, the rights of non-biological
children and the ways that different countries’ tax systems
interact. The experts who took part in our research reported
increasing conflict and litigation within modern blended families
because of these factors.”
Among the findings, 78 per cent have handled cases of
multi-jurisdictional families; cohabiting families (73 per cent);
and mixed-ethnicity families (61 per cent); and more than half
had seen an increase in same-sex relationships (54 per cent) and
non-biological children (51 per cent) in the families they
advise.
These changes bring increased complexity, with such families
often facing distinctive challenges when planning for their
financial futures and succession. These range from cross-border
legal and tax conflicts between different regulatory regimes, to
generational and cultural divisions within families
themselves.
Participants in STEP’s research are increasingly seeing
disagreement, breakdown in family relationships and litigation
among the families they advise due to this modern complexity.
For the purposes of the survey and report, STEP said it
used the following definitions:
-- Traditional family: Married heterosexual couple with
biological child/children;
-- Blended family: Family unit where one or both parents
have children from a previous relationship and they have combined
to form a new family;
-- Cohabiting families: A family unit where the parents live
together without being legally married or in a civil
partnership;
-- Multi-jurisdictional families: A family unit that is spread
out globally, residing and holding assets in different
jurisdictions; and
-- Multi-ethnicity families: A family unit that combines
different ethnicities and cultures.