Simplifying your wealth structure is primarily about consolidation says South African Director

Director within the Stonehage Fleming South African Family Office division, Michael McLeod, says that knowledge of the consequences of these standards is generally low in South African.

“The main attractions of multiple structures are estate and tax planning, succession planning and privacy. In many cases, privacy can still exist without the need for cumbersome structures, while retaining data protection and data security with regards to private wealth,” says McLeod.

“Historically, the motivation behind complex wealth structures for high and ultra-high net worth families was linked to secrecy and tax mitigation. The regulatory environment is becoming increasingly more stringent, which means transparency is non-negotiable and secrecy is not an option.”

McLeod also cautions that many wealthy families’ existing structures no longer serve their original purposes and should be reviewed by a trusted financial partner to ensure that their needs are being met to safeguard family wealth for current and future generations, and the management of family assets.

“Simplifying is primarily about consolidation; a process of combining multiple structures into a single, more coherent whole; an entity that will be the primary vehicle for your family moving forward. In terms of modernisation, a consolidated structure will also prove more cost effective due to the rising administrative and professional costs associated with such structures. If your wealth structure is user-friendly for you, it means it will be user-friendly for the regulator and this knock-on effect is an important consideration.”

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