How private wealth is held

Private wealth is hard to generate and preserve. A popular and established way of holding it is through a trust. A trust transfers control of your wealth to trustees and manages its transition to the next generation. It can be combined with the use of limited companies, partnerships and other types of legal entity. These can be established either in England or in offshore jurisdictions and often a combination of both. Popular offshore jurisdictions include Jersey, Guernsey, the Isle of Man, the British Virgin Islands and the Cayman Islands amongst others. The two main advantages of offshore jurisdictions are that they provide privacy and lower tax rates.

An alternative and increasingly popular way of holding private wealth is through family investment companies. These are private companies, which allow assets to be owned by other family members as shareholders. Control of those assets remains with their original owners who are appointed as directors of the company.

Family charters

A family charter is also referred to as a family constitution or protocol. It is a document that sets out what is important to a family, its outlook on the world, how it wants to govern itself and manage its assets.

A family charter is not legally binding. Instead it sets out principles which help to give guidance when making important decisions. It is most effective when created after a collaborative discussion between family members rather than being imposed by one person.

It will usually comprise the following elements: a mission statement, identification of key members or a family tree, structure chart of the main assets and liabilities, decision-making processes, investment objectives, philanthropy objectives and approach to preserving and transferring wealth. This might include focusing on certain types of investment, donating to or managing a specific type of charity, requiring university education and pre-nuptial agreements in order to receive trust distributions and so on. A family charter is personal and unique to each family.


It is essential to have a will if you want to be in control of what happens to your assets and family. Without a valid will, everything becomes more time consuming and expensive. You need to update your will if your financial or relationship circumstances have changed. On getting married, any previous will you have created becomes invalid.

You can set out in as much detail as you choose who inherits your assets and personal possessions. This can be family, friends, charities and other organisations. If you do not make any decisions then the rules of intestacy apply, which means that everything will be distributed in a set order. If your children are under the age of 18, you can name the people you have chosen to be their guardians until they become adults. A guardian takes on responsibility for raising a child as if that child were their own. A will can also create a trust to control the inheritance of wealth by younger children.

Your will appoints one or more people to act as your executors. An executor administers your estate in accordance with your instructions and distributes your assets to your named beneficiaries. A will is your opportunity to name only trusted people to fulfil this role.

Separate to being in control of your own estate, there are certain tax allowances which you can take advantage of to reduce inheritance tax.

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