BY MARCOS ALMEIDA
COVID-19 . Before March it was hard to imagine that a pandemic in such scale would affect lives and business throughout the world like it has. Although it is expected for a global financial crisis to happen every couple of decades, as an endless cycle of ups and downs, gains and losses, rises and falls, the COVID-19 pandemic was without precedent in modern times and brought not only companies and families, but whole countries to unsustainable positions.
In such extraordinary conditions, it is unlikely that anyone can predict how the world will be after the pandemic is controlled. However, it is certain that a considerable amount of businesses won’t be able to rise again, jobs will be lost and the economy will have to go a long way to recover. All of this will have a significant impact on family wealth and planning, including the need for protection of assets that, in the midst of crisis, should be preserved for the sake of families and to sustain the wellbeing of beneficiaries.
You can put in place the best asset protection that you can get using the strongest asset protection laws available, but there is more to it than laws, court cases or expert analysis. There is unpredictability. Unpredictable events can make precautions useless and there is no way you can avoid it. This is something that we have to live with.
There are, nonetheless, tools to avoid the effects of the unpredictable. It is the caution to look further and visualise every possibility that can impact your life, your business or your family. Going to the “limit of caution” is what wealth planners should focus on when setting up plans for their client’s wealth. This “limit of caution” should not only be observed by the wealth planner, but should inform the whole structure and be considered by other providers connected to this planning.
The jurisdiction where you form a trust or a company or any other wealth planning structure should not only be analysed by its laws, reputation or geographical location. Additional factors should be analysed such as economic stability, government stability and the ability for the jurisdiction to overcome difficulties and unpredictable factors such as the Covid-19 pandemic. It is useless to have a trust if the trustee is located in a jurisdiction that is not safe from unpredictable interferences and becomes incommunicable in difficult times. It is careless to have a trust in a jurisdiction where political instability may jeopardise the existence of the structure or the assets held by it. Laws and paper may keep you safe but the “limit of caution” lies on the analysis of all factors and, as everyone knows, a lot of unpredictable factors can occur when we talk about legacy, succession and long-term wealth planning.
The “limit of caution” takes us to Southpac’s jurisdictions of the Cook Islands, Nevis and New Zealand.
The Cook Islands is located between French Polynesia and Hawaii. It is self-governing in ‘free association’ with New Zealand. Since 22 January 2020, the Cook Islands Government has implemented mitigating measures to protect the Cook Islands population from Covid-19. On 16 April 2020, Prime Minister, Hon. Henry Puna, declared the Cook Islands “a COVID-19 free zone”. The country had a total of zero infections during the pandemic and it’s destined to remain as it is, considering that the restrictions will remain until circumstances around the world improve.
As part of the Federation of St Kitts and Nevis, Nevis took aggressive measures at an early stage, including border closures and a national lockdown, in an attempt to remain Covid-19-free, which have so far paid off: on 10 May, the Nevis Premier Mark Brantley announced that Nevis was free of Covid-19, having had only 11 cases, all of which had recovered.
On 23 March, one month after New Zealand’s first case, Prime Minister Jacinda Ardern announced a strict national lockdown with only 102 active cases and zero deaths. Stores, restaurants, offices and schools closed. Only companies that were able to implement home office remain active, other than supermarkets, gas stations, hospitals and other essential services. As a result New Zealand has had a total of 1,504 cases and 21 deaths to date. On 14 May New Zealand moved to Alert Level 2 where most business and schools are open and operating normally where possible, while managing public health risks. The economy is moving again after 2 months and has started its recovery.
In a turbulent world, New Zealand stands out as a reassuringly sturdy beacon of economic, political and social stability. It was ranked the world’s third most stable country in the Fund for Peace 2016 Fragile States Index. In 2017 New Zealand shared number one spot on Transparency International’s Corruption Perception Index measuring the trustworthiness and good functioning of public institutions like the police and judiciary. It ranks comfortably among the world’s top 10 countries for adherence to the rule of law according to the World Justice Project (WJP) 2017 Rule of Law Index, and it brings Cook Islands along with it, due to their free association and geographical location.
In between the above extraordinary numbers there is Southpac. With offices in New Zealand, Nevis and the Cook Islands, all employees were safely working from home continuing to provide services to its clients with no alterations. Southpac employees are now back in office and, although there’s still a lot going on in the world, it is business as usual at Southpac.
The world may be collapsing for many, but trusts and companies with Southpac remain safe. The successful steps taken by New Zealand, Nevis and the Cook Islands in dealing with the recent unprecedented circumstances provide an additional incentive to what are already the best jurisdictions available for wealth planning and asset protection structures.
Southpac continues to provide its services, making it available to clients whenever needed.
Unpredictable circumstances affect anyone, wherever they are, but being prepared for unpredictability is something that only the best wealth planner can do. Southpac takes the “limit of caution” as a serious factor. We pride ourselves on offering the best asset protection structures and services in the world, not only because the jurisdictions that we work in are the most recommended or have the strongest laws in place, but also because we know that whatever happens in the world, our offices, services, trusts and companies will be safe, and so will your assets.
If you want to discuss your assets, or your asset protection structures you can reach us at email@example.com