Key takeaways from the Private Client Transatlantic Wealth & Estate Planning conference

Farrer & Co partners Bryony Cove and Richard Lane, along with Senior Associate Daisy Tarnowska, recently attended the Informa Connect Private Client Transatlantic Wealth & Estate Planning in New York. The conference covered wealth and estate planning for US citizens or those who have financial interests in US assets.

Bryony, Richard and Daisy share their key takeaways, addressing the UK tax regime changes for US persons, private capital, and emerging trends for the coming year.

What was the most surprising or memorable insight you took away from your trip?

Bryony Cove – Travelling to the US immediately after the recent election was fascinating. The mood in Boston and New York was, as always, one of positivity, even if not everyone is happy with the outcome of the election. It never ceases to amaze me how positive our US friends can be and the cities both felt busy, if a little cold now winter has come!

Richard Lane – For me, meeting with US attorneys, I was struck again by the general level of interest there is and remains in the UK and its institutions. Perhaps that is particular to the North East, but there is a high level of curiosity mixed with concern over the UK’s current economic and political situation.

Daisy Tarnowska – I had not visited New York since my secondment to a New York boutique family law firm in 2018. I was struck again by how open New Yorkers are about their political views (compared to here in the UK) and I gained a real insight into the direct impact of the election result on both the US attorneys’ lives and their clients’ lives.

If you had to pick one topic which resonated on your trip, which one would it be and why?

Bryony Cove – We met with private client, corporate and family contacts on the trip. For the private client professionals tax is the biggest topic, with changes for both US/UK connected clients in the UK following publication of the new rules for long-term residents of the UK and uncertainty about the estate tax threshold for all US persons. 

Richard Lane – We talked about the likely impact of the new administration on transactions and the economy generally. There was a majority view that most investors and corporates will give more attention to the US domestic market than elsewhere in the short term as they begin to understand and evaluate the economic changes that they expect to be introduced early in 2025.

Daisy Tarnowska – It was fascinating being the only family lawyer at a private wealth/tax conference. There was a lot of discussion about wealth preservation from a succession/estate planning perspective, but no mention of how divorce can have a huge adverse impact on family wealth, particularly in relation to family businesses if there are not enough liquid assets. I actually made the point at the conference that having a fit for purpose nuptial agreement which stands up in the relevant jurisdictions is arguably just as important as tax/estate planning considerations.

Which sessions at the Transatlantic Wealth conference (which Bryony chaired) were particularly on point?

Bryony Cove – It was great to have a wide range of topics and the injection of a session on Private Capital and inward investment into the UK was a new one, which the audience engaged with well. There was also a great international tax session (the hottest topic of the week) plus speakers from Spain and Italy on US persons moving to Europe. The opening up of Italy as a destination of choice for the internationally wealthy individual is clearly gaining quite a bit of traction.

The conference addressed UK tax regime changes for US persons — how do you see these changes affecting estate planning strategies?

Bryony Cove – US persons are well used to having to report and pay tax fully in the US and many will welcome the new four year low or no UK tax regime available to them from 6 April 2025, enabling them to move to the UK to try it out before making a longer-term commitment. It is clear that many Americans will still want to live and work in the UK and they will still be made to feel welcome. Other European countries are giving the UK a run for its money, however, especially Italy, Spain and Malta.

If you could summarise the conference’s message to private client advisors in one sentence, what would it be?

Bryony Cove – The Great Wealth Transfer is in full flow now and the multi-faceted issues facing all our clients will continue unabated for some years to come. The collaborative atmosphere in the room reflected for me the wider mood of private wealth advisers in my recent experience, which is to work together where we can, share ideas and maximise positive client outcomes on all fronts. It’s a great and supportive industry to work in.

Looking ahead, what’s a trend you think we’ll be talking about this time next year —something you heard murmurs of but hasn’t quite exploded yet?

Bryony Cove – The ongoing armed conflicts around the world mean that safety can be hard to find for many families with a reasonable level of wealth. Whilst tax seems to be front of mind now, these increased hostilities may lead to more agnosticism around tax being one of the costs of living safely.

Richard Lane – We heard a fair bit about the many US families looking to leave the USA in 2025 and head over to their homes in the UK and continental Europe to stay for the next four years. It’s too early to say if this will happen, but watch this space.

Daisy Tarnowska – I had not realised that Italy was such a hot destination for HNW individuals at the moment (though I can certainly understand the appeal of La Dolce Vita!). But again, wearing my family lawyer “hat”, I would advise them to also think about what would happen if they were to divorce in Italy. For example, if they already have a pre-nuptial agreement in the US or UK, they should take some specialist Italian advice about whether it will be upheld in Italy on divorce.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, November 2024