Changing world for trusts

How will global demographics affect the trust industry? That was the question posed by Andrew Holden of XXIV Old Buildings at the recent BL Guernsey Trusts Conference. Headline information on demographics shows a population explosion around the world and, significantly, more people now live in urban than rural areas.
Wealth is also on the increase, but, there are challenges. Governments are dealing with the squeeze – an aging population, budget deficits and a pressure to raise more taxes -which means that trusts are in the firing line.
However, Holden also noted that this is an opportunity for trusts as a future featuring an aging, wealthy society would have great need of efficient, secure wealth preservation and transfer structures to avoid complex and contentious inheritances.
There will be some challenges, and Holden highlighted three in particular, with freedom of disposition, as practised in anglo-saxon law jurisdictions, set against the entrenched property rights which are more prevalent in other countries. In a world of international clients, this becomes more critical than ever.
There are also the issues of fiduciary versus settlor control of a trust and the expectation of transparency from regulators set against the expectation of privacy demanded by clients. Many trust practitioners would like to find a middle ground, with disclosure made at the appropriate level to a trusted regulator or enforcement agency a very different prospect to a public register of beneficiaries.