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Middle East Wealth Management Forum 2020 - Exclusive Insights - Sunita Singh Dalal - 2

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1. For some GCC based clients Common-Law Trusts may not be a suitable solution for their wealth transfers needs – what alternative structures are being utilised by which client segments?

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1. For some GCC based clients Common-Law Trusts may not be a suitable solution for their wealth transfers needs – what alternative structures are being utilised by which client segments?

Interestingly, I actually cover the regions of not just the GCC, but Southwest Asia and Africa. And you would find that the same trends, and the same concerns, and previously tried and tested formulae are touted around all of the geographies, whereas these aren't actually real robust solutions. So, what we have at the moment is educating clients in relation to what we have available for them for their local portfolios. Common law trusts do not work for families in this region for their domestic assets, and the main reason is, of course, the location of their assets, some of them being intangible assets and not capable of being legally transferred into common law trust structures. That's a fundamental point that people have to get to grips with. The question is therefore, if you are truly putting a succession plan in place, so you're preserving wealth of a family where you have a mixture of assets, be they operational assets, be they real estate assets, what do you do? Do you break up the portfolio? Or, ideally, which is what we do, is we try to provide them with a holistic solution. Therefore, if you dig deep and look at the foundation structures that are available now, the foundation structures actually work beautifully for families in the geographies that we cover, be they Muslim or non-Muslim. A common misconception that a lot of people grapple with is the application of Sharia law. And the point is Sharia law does not come into place or does not get taken into account if, at the end of the day, the patriarch has already devolved himself of his portfolio of assets. So, by depersonalising a portfolio, housing it in a robust, sustainable structure that truly is viable for operational purposes and also succession purposes, the personal elements of Sharia law shouldn't even be taken into consideration. We've seen now families from the GCC, predominantly Muslim families from the GCC, large business families from the GCC, using the foundation structure exactly for these purposes.