The idea of what a ‘family’ looks like has drastically changed in the last two decades going from a singular nucleus to a more complex structure.
So-called ‘blended families’ – with adopted children or children from previous relationships – have skyrocketed since 2011, resulting in much more detailed needs and advice required when it comes to their wealth and succession plans.
The Society of Trust and Estate Practitioners (Step) found 63% of advisers said that complex, cross-border, mixed-ethnicity and cohabiting families now make up a significant portion, if not the majority, or their clients.
More specifically lawyers, tax advisers, wealth managers and trustees from around the world all agree that there has been an uptick in these types of clients:
- Multi-jurisdiction families, up 78%;
- Cohabitating families increased by 73%;
- Mixed ethnicity families have grown by 61%;
- Same-sex couples/families up 54%; and,
- A 51% increase in the presence of non-biological children.
The changing picture of what a family looks like in the 21st century also comes with greater complexities when they need to set out a wealth and succession plan.
‘Adapt and modernise’
Step found that this has become even more difficult, as laws have not kept up with the evolving family structures.
“Antiquated legislation and out-of-date language” have meant a rise in disputes and disagreements among family members, often leading to litigation and breakdown of relationships.
Emily Deane, technical counsel at Step, said: “Families are evolving fast, no longer constrained by creed or culture, gender or geography. But modern families can be complex, challenging, diverse and all over the map – often literally. Planning for their financial futures requires expertise and collaboration across borders, cultures and professions.
“Unfortunately, legislation has failed to keep pace with the times, especially in key areas like cohabitation, the rights of non-biological children and the ways that different countries’ tax systems interact.
“The experts who took part in our research reported increasing conflict and litigation within modern blended families because of these factors. Step is calling on advisers and legislators globally to adapt and modernise to keep up with the needs of today’s modern families.”
