Second day
The first panel of the day centred around family governance issues. Panellists were Kecia Barkawi, founder and CEO of VALUEworks; Dina Casparis, independent lawyer, advisor and novelist; Etienne D’Arenberg, partner, Mirabaud & Cie; and Nichlolas Jacob, partner, Forsters LLP.

D’Arenberg said that a lot of inheritors need to have training sessions and gatherings to work through financial issues, including understanding concepts and ideas. (With some young adults this might not be such a challenge if they are studying law, finance, accounting or similar subjects in college.) Another big question for family members is whether they have enough people in their lives whose advice they can trust, he said. 

Barkawi gave the example of a family that asked her firm to run a programme to prepare their offspring to be responsible about wealth, as they would at some point have to get involved in running an operating company. To address this, a philanthropic project was created to get them accustomed to understanding budgets, planning and understanding outcomes.

Casparis noted that US and German families often became rich through industry, so there was a tried and tested family governance tradition that arose from that. In Switzerland, this was less the case, so discussing governance and money issues has not been as easy. A challenge for advisors is how they can connect with next-gen inheritors without going behind clients’ backs, Casparis said. 

One topic raised was how families should balance the need for their offspring to be treated fairly and whether this meant equality: not all young people are equally qualified or motivated to run an inherited business, which meant that sub-dividing assets could be challenging.

Second panel
The second panel of the day addressed art assets and the challenges of buying, selling and holding art at a time of heightened focus on money laundering rules. 

Speakers at this event were Sandrine Giroud, partner at Lalive; Michelle Stroube, legal assistant, at Mishcon de Reya; and Willem-Joost De Gier, co-founder, Cadell.

Stroube kicked off the panel discussion by laying out the need for intermediaries, buyers and sellers of art to be clear about its provenance, authenticity, the sources of wealth to buy art, tax, legal title and logistics. And under the latest EU anti-money laundering directive, taking effect in January, artworks worth more than €10,000 are subject to tests and regulatory requirements to prevent money being laundered.

The question arose of how many bidders in auctions for artworks are anonymous and what is going to happen if beneficial ownership disclosure means they can no longer keep their names private? “That information is going to get more and more public,” Stroube said.

Giroud noted that the global art market is worth around $60 billion and cited evidence, such as studies from Deloitte and Art Tactic, showing how high net worth investors have become keener on investing in art in recent years. This has fuelled turnover in the art market and the need to keep it compliant. She mentioned ventures such as the Responsible Art Market Initiative, put together by industry practitioners, to weed out problems and keep the market honest. De Gier noted that the fine art market is now very sophisticated and professional, and no longer amateurish. One factor, he said, is that the market can be driven by emotion, which can create its own challenges for avoiding problems.

Third panel
The third panel examined investing in real estate abroad. Participants were Liam Bailey, global head of research, Knight Frank; Dr Alon Kaplan, advocate and notary, Alon Kaplan Law; and Edward Reed, partner, Macfarlanes LLP. 

Bailey said that investors have to expect a period of lower returns after some strong figures; adding that the UK market post-Brexit was “interesting” because of the slippage of sterling, and the dissipation of some of the uncertainties about its departure from the bloc. Meanwhile, the market continued to be shaped by highly mobile capital flows. “That’s not going away.”

Dr Kaplan spoke specifically about Israel’s real estate market and of how a country that was founded in 1948 had gone from a population of about 400,000 to more than 9 million amid waves of immigration by Jewish people from around the world. He set out the various tax incentives, including a 10-year tax “holiday” - designed to draw in financial inflows - which immigrants can apply for.

Reed discussed the rise in the UK of Unexplained Wealth Orders and how this applied in a few recent cases to holders of property. He noted that UWOs applied to people suspected but not necessarily convicted of serious criminal offences (a fact that has raised some worries about due process of law). 

Fourth panel
The world of foundations was aired in the next panel, with discussion about the differences between trusts – creatures of the common law – and foundations (continental civil law), and the jurisdictions which are known for being friendly to foundations. Panellists were Christopher Jolk, partner at BMH Avocats; Paolo Panico, chairman, Private Trustees SA, Luxmebourg & Advocate, Paolo Panico’s Law Chambers; Dr Natalie Peter, partner, Blum & Grob Attorneys at Law; and Dr Johanna Niegel, senior client advisor, Allgemeines Treuunternehem, committee member of Verein STEP.

Fifth panel
This publication wrapped up its coverage of the conference by hearing panellists talk about the prospect of trust law taking shape in Switzerland, enabling a domestically-driven industry (foreign trusts are already recognised in the country, which is not a common law country). 

Panellists for this discussion were Professor Dr Francesco A Schurr, professor of Law, University of Innsbruck; Professor Dr Luc Thévenoz, Professor, University of Geneva, director, Centre for Banking and Financial Law; and David Wilson, partner, Schellenberg Wittmer.

The participants talked about how there are motions in the Swiss parliament to call for a Swiss trusts law. A key theme, the panel heard, was to be clear about the duties of trustees and beneficiaries. There will be a public consultation on the issue probably in the fourth quarter of this year and then the matter will go to parliament. With respect to the taxation of such Swiss trusts, Wilson noted that Swiss federalism sets limits to what the federal law can impose on the individual cantons of the country. 

To close the event, a “great debate” about trust and estate industry issues was held, featuring Nicholas Jacob, partner at Forsters LLP; Fabianne de Vos Burchart, counsel, Charles Russell Speechlys; Professor Dr Dominique Jakob, Professor of Private Law and director of the Center for Foundation Law at the University of Zurich; and Professor Dr Luc Thevenoz, Professor, University of Geneva, director, Centre for Banking and Financial Law.