Foreword - November 2019

One might reasonably ask, what is the significance of all this planning and preparation? When I work with clients, I find the variety of my answers to common issues is dependent on the simple question of which law applies and why. As readers are aware, the most fundamental legal concern of our globetrotting clients is that they may become impacted by the legal system of a jurisdiction that operates very differently from their home jurisdiction. As I have heard people say, almost everything our clients do could have some economic implication around the globe.

Broadly speaking, the possible divergence between legal systems affecting our home jurisdiction in the area of trust and estate planning very often causes complications as our clients move, have families and invest internationally. We are all well aware of the transparency and reporting standards and challenges of advising multi-jurisdictional clients, many of whom may not understand the rules. This month’s regional focus on the US and Canada highlights these complications and keeps us aware of potential issues.

In a thoughtful article, Daniel Frajman TEP explores the new rules concerning the political activities of Canadian charities and their impact on public policy. Not surprisingly, another underlying theme is the growing number of clients finding themselves with domicile and residence issues. Shlomi Steve Levy TEP and Sergei Titorenko highlight tax-planning issues for Americans departing Canada to return to the US for retirement. Additionally, the analysis of the Hallyday case by Diane Le Grand de Belleroche TEP is well worth a read; this case is a battle of the estate’s proper jurisdiction versus testamentary intent. Knowing there was potential for warring jurisdictions, I wonder whether bringing in counsel from the opposing jurisdiction would have helped with the testamentary intent.

The trustees among us should find James Hoare’s article interesting as he explores ideas to consider when developing investment policy statements. It is imperative that all parties understand how investment management decisions are made. Additionally, this month’s Journal features an article by Charlotte Thorne that explores how private equity is becoming a more predominant asset class and how trustees (and investors) need to be prepared for the consequences of this asset class. I know many of my trust and individual clients are investing more in private equity, or at least asking if it makes sense to make those types of investments.

As always, court rulings can give us surprising results. Stephen Sweeney TEP provides commentary on Marley about the loss of the right of survivorship in Ontario. This article had me raising questions about what happens to jointly owned homes, testamentary intent and the need for careful drafting.

I previously mentioned the complications of jurisdictional issues when clients invest internationally; an ongoing theme in the US is the (potentially ugly) tax consequences of foreign non-grantor trust distributions. Shelly Meerovitch TEP and John F McLaughlin discuss the default method as a technique to help solve this issue.

There are many more articles well worth reading and filing away as needed for our clients. As I wrote earlier, the Journal helps us to plan and prepare. It is really the wealth of knowledge of our contributors that gives us this opportunity. The Journal helps prepare its readers to take appropriate action. Of course, STEP will continue to help practitioners by providing examples of challenges brought by wealth transfer to future generations during a time of greater global mobility by our clients.