Succession planning for a billionaire Saudi family

Date: 24 Jun 2015

Citywealth

Mark Buzzoni, partner, and Kyra Motley, associate at Taylor Wessing, say in Middle East, Africa or Russia, control is more important to individuals than in certain jurisdictions more familiar with trusts.

Tell us about some interesting cases of succession planning you have been dealing with?

We are currently acting for a billionaire Saudi family on the structuring of their worldwide wealth into a number of private trust company structures. The succession plan also involves the structuring of regional assets in the Gulf Cooperation Council, a political and economic alliance of Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman, into an ultimate holding company incorporated in the Kingdom of Saudi Arabia, and in which each of the family will hold a “golden share” ensuring that the assets pass in accordance with Sharia law.

We have also recently assisted a billionaire Nigerian family who have a number of assets in seven different jurisdictions worldwide. In order to ensure that the wider family are consulted on certain issues we incorporated a family council as a company limited by guarantee to act as “protector” of the family trusts following the patriarch’s lifetime. This ensures that certain decisions of the board of the private trust company require the approval of the wider family.

What lessons we can learn from them?

In nearly all situations one key matter for the family is to ensure that they retain control. This is particularly important for clients who are from regions such as the Middle East, Africa and Russia, amongst others, where control is more important to individuals than in certain jurisdictions more familiar with trusts.

What trends are you seeing in succession planning you can tell us about?

We are increasingly seeing a desire in clients from Middle East, Asia and Europe, to ensure their assets pass to their relations according to the principles of Sharia law whilst some clients want to avoid the application of forced heirship rules. Although we cannot opine on Sharia law, we do work with scholars who assist with this. We sometimes also advise clients to create a separate will for each jurisdiction in which they hold worldwide assets and keep these regularly update, although the position will change from this August for certain clients affected by the EC Succession Regulations.

In terms of trends, we are seeing clients wanting to ensure their wealth is not made public. Also, clients tend to start succession planning earlier in their lifetimes and taking matters more seriously than they used to.

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