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Can you tell me a little about your work and what your day to day looks like?

It’s quite varied. It certainly changes every day. One aspect of my role is presenting the work of my department internally within Julius Baer, as well as externally, so that people within and outside of the business know we’re there and what we do. My core focus is the set of services provided by our two trust companies. We’ve got one in Switzerland and one in Singapore. I’ve got a background in fiduciary services, in trust services, going back 40 years.

I’m sure there’s a very personal aspect to what you do. You and your team are seeing clients at some of the happiest moments of their lives and perhaps the less happy moments. One of those, unfortunately, can be divorce. When it comes to succession and how spouses can or should be involved, what should people be aware of?

I think the most important thing is to start by recognising that, even though it seems unromantic, it is a simple fact that 40% to 50% of marriages end in separational divorce, and that’s fairly consistent across the world. Before going into a marriage, I think it’s a good idea to discuss the possibility that this could happen. And we mustn’t think of this sort of planning as being negative. If it’s approached correctly, it gives both parties certainty in the future. And that’s a positive thing. I think too often, particularly in the media, things like prenuptial agreements are described in the wrong way – as though they’re some sort of ‘poison pill’ planning, almost – so that if one party has more wealth, the other party is left penniless in the event of divorce or something like that. That is, in my experience, not the way to approach such planning, and it can even be quite vulnerable to legal attack. So that’s not the way forward. I am focused on key clients. These are clients who have had a relationship with Julius Baer. Sometimes it’s new, but we have many clients who have been with us for decades.

Part of my role is to offer continuity to families, and there are families that I’ve worked with now for 20 years. But we also need to institutionalise how we deal with families, because, of course, wealth lasts a long time – or we hope it does. And so that’s why I’m always working as a team with colleagues. It’s not a one-person show. We’re always adopting a team approach to what we do.

What trends are you seeing when it comes to modern families and their wealth? And do you see divorce becoming even more of a prominent topic?

Several trends have been emerging over the past few decades. One of them is that there is a high level of separation and divorce: as said, 40% to 50%. It’s lower in some countries, but in others it’s as high as 60%. Another trend is that families are very international. Most families that I come across nowadays have members in different countries. In the past, people were less mobile. And that mobility also presents a challenge, because when you plan the succession of wealth and things like the possible breakdown of a marriage, it always is more complicated when there are multiple countries involved.

Asia is an important part of our business as a private bank. And over the past 15 or so years, there has been a high level of contentious divorce in Asia, and that’s been prominent in the media. I don’t have an opinion as to why it occurs, but it’s another major trend. It’s causing an increasing demand amongst our clients in Asia for succession planning.

What are some common issues that might come up for those trying to navigate these matters?

First, let’s deal with a couple wanting to plan the succession of the wealth between them in the event of a separation or divorce. That’s a tricky issue, though there are tools available. As mentioned, prenuptial agreements are the most obvious tool of choice. Both parties need independent legal advice. If they don’t take that, it can make the agreement vulnerable to attack at a later date. It’s also very important to remember that the objective of a prenuptial agreement is to give security and predictability to both sides. It’s not about leaving one party penniless in the event of a breakdown of a marriage, and good lawyers will explain that to both parties. There’s also a possibility of postnuptial planning. Let’s say, for example, that one party builds up substantial wealth, substantial earnings or earnings potential over the years – in that kind of situation, they might choose to enter into an agreement during the marriage.

If a marriage does sadly break down – and assuming there’s no prenuptial agreement at play – any notion of shielding any party’s wealth from consideration by the divorce courts is completely flawed. And it is important to remind clients of this, because most people in the world are honest, decent people. But if a marriage breaks down, it’s emotionally charged. And the parties might consider last minute measures to shield their wealth – in the emotionally charged situation, it seems justifiable. But of course, that sort of planning is improper. And so sometimes our clients need someone independent to just drop them the hint that that is an unwise way to go.

How can a high-net-worth family, for example, mitigate the risks of losing wealth over generations from spousal disputes?

Whoever has possession of the wealth has the right to plan it using different planning tools. The most regularly used are trusts. But there are other mechanisms as well: for example, foundations or insurance planning. And one mustn’t generalise, because each plan will be different for each family. Where do they live in the world? What are the fiscal rules that they have to abide by? And you have to individually design the solution for those clients. But I would say trusts are the most often used tool.

And a straightforward example is that someone with substantial wealth can establish a trust that will exist for potentially indefinitely or 100 years or 200 years. The beneficiaries are their descendants, but not the spouses of their descendants. So that’s an obvious way of potentially planning the succession of wealth. However, one must be careful about unintended consequences. Somebody might set up a trust for future descendants, and at some point one of those descendants passes away, leaving minor children.

Now, if the spouse is excluded, could that have unintended consequences? The remaining parent won’t be able to access those financial resources, and it won’t be a very happy family. There are ways of designing around this – is it has to be done carefully, with a lot of thought.

And what about cases, then, where there might be a committed relationship and it’s come to an end, but there was no marriage that took place, so less of a legal tie? Maybe people might have children together, they might have been cohabiting, or perhaps they were in same sex marriages. And civil unions, for example, might not be recognised in certain countries.

There’s a trend across the world of cohabitation, civil unions, same sex relationships, et cetera, all being recognised as equivalent to marriage. But of course, in a country that doesn’t recognise these things, it normally follows that there is also no protection in the event of a breakdown of a relationship. So it varies from country to country. I would say, though, the general trend is towards all of these things being equivalent in the eyes of the law.

A separation is going to spark high emotions in a family. So how might a patriarch or matriarch broach this topic with their children without causing a rift? Without making it look like they don’t trust their children’s romantic choices?

I think, first of all, the matriarch or patriarch should take the lead. There’s nothing wrong with doing that; they have possession of the wealth and they’re concerned about the future of the family. But they should resist the temptation to bully the family into anything. By definition, if you do that, it’s not a long term solution. Table the core principles transparently, even if it might be uncomfortable. If the core principles – for example, protecting wealth from spouse of future spouses –  aren’t stated transparently, then no good will come of it. That’s another important principle. If there are legal claims in existence in a family, maybe because of inheritance laws or something like that, these will present obstacles to the whole thing. Try to settle them reasonably before conducting the planning. And after hopefully reaching a consensus, make sure that the agreement is enshrined legally. Maybe it’s a will, maybe it’s a trust, or maybe it’s some form of other inheritance contract. Either way, if it’s going to be effective into the future, it can’t just be a conversation.

One of the mechanisms available is a so-called family constitution, which has been widely discussed in the media. These are documents which shows the shared values of a family at a given point in time when it’s signed. Generally, they’re not legally enforceable – they are more of a record of the philosophy of the family. But the most important thing about a family constitution is not the document itself. As T. S. Eliot once said, the journey is the way. And the point about a family constitution is that the family have a conversation. It’s often the case that when wealth dissipates during the succession process, it’s because the family haven’t actually talked together properly about the future and what their values are. I think there is a place for family constitutions, particularly when families are globally diverse.

We always like to ask our guests for their key wealth insights. What are the main takeaways you’d like people to consider?

With a forthcoming or existing marriage, plan in advance if at all possible. In advance of a marriage, consider a prenuptial agreement. Remember that such an agreement should be fair to both sides, otherwise it won’t be effective. The purpose is to give both parties to a marriage predictability in the future. If, sadly, a marriage does break down without a prenuptial agreement in place, forget any notion of shielding wealth from the consideration by the court. It won’t be effective, and it’s not right to do, even though it might be tempting in an emotionally charged situation. Wealth planning for future generations, meanwhile, is in general easier than planning for a marriage.