Murray Beith Murray LLP is a leading Scottish private client law firm.
For 175 years we have specialised in meeting the legal, financial and administrative needs of individuals and families, family trusts, charities and private companies.
Murray Beith Murray LLP is a leading Scottish private client law firm.
For 175 years we have specialised in meeting the legal, financial and administrative needs of individuals and families, family trusts, charities and private companies.
Murray Beith Murray Partner, Peter Shand, writes in The Scotsman today. Read the full article below, republished by kind permission of The Scotsman:
Go on, admit it, you’ve probably had that family discussion about how you would divvy up a huge lottery jackpot win. And as you argued about what those in your wider circle should get from your largesse, I suspect you didn’t then take the next logical step and assess how the lucky recipients could cope with your offering. Let’s not forget that tremendous responsibility can be the tag team partner for great wealth.
In fact, in all likelihood you won’t have thought about how you yourself could actually deal with unexpected wealth either, as you wallow in initial thoughts of what car to buy and where your overseas holiday home will be.
Playing the key advisory role for people who have suddenly and often anonymously burst onto the UK’s rich list doesn’t just revolve around our technical knowhow in legal issues and matters of tax and wealth management. For example, despite all your dreaming, a lottery win is not something you are really prepared for, but vast sums are dished out to lucky winners every week. Shakespeare said that some have greatness thrust upon them, but if your numbers come up the same applies to great wealth. If you aren’t surrounded by the right people, both in a professional and personal sense, it can take a great toll – having money comes with a considerable number of potential pitfalls.
As an organisation that sets up and co-ordinates family offices, we are often called on, almost as relationship counsellors, to deal with potential fallouts and conflicts in financial dealings. For someone new to money, zero knowledge and lack of experience is a dangerous combination and a guiding hand is essential. An unfortunate statistic is that 70 per cent of lottery winners will later be declared bankrupt.
The chances of winning the lottery may be rather slim, but more of us than ever before are coming into large sums of money. Typically, we may associate quick wealth with the sporting world, especially football, where young men barely out of their teens can earn tens of thousands of pounds per week. The player’s car park at many training grounds resembles a supercar showroom.
However, just think of inherited wealth and in particular when it involves a property that has soared in value. In some areas of the UK, homes routinely attract seven-figure sale prices. Even if your share doesn’t reach that scale, you can still be left with a considerable sum to deal with.
And what about those who have built and sold a business? The old adage that the first generation of a family creates wealth, the second generation maintains it and the third blows it is worth highlighting.
Without proper stewardship the ‘blowing it’ phase could come earlier and the benefits of a family office – a multi-disciplinary team of lawyers, accountants, tax specialists and wealth managers – looking after all affairs are clear to see in preventing an erosion of wealth.
Many of new and unexpected means – think young lottery winners – will not have the experience or knowledge to work their way around a balance sheet or profit and loss account, properly risk assess their decisions or put in place suitable succession planning. A family office also provides a holistic view offering objective and neutral advice that can help bridge different views and aspirations between generations and different family members.
Those aspirations may include an element of philanthropy, a given for the super wealthy in the US, but less part of the culture in the UK. That said, we are advising about and setting up more charitable foundations and trusts than ever. Of course, there is an overriding element of altruism in this, but foundations also present an opportunity to educate the younger generation on business and boardroom matters and on the value of money, especially if they didn’t actually earn it.
Spending excessively is a behavioural trait, perhaps even an addiction, that can be passed onto the next generation. The Bible warns us that the love of money is the root of all evil, but to that we could perhaps add that taking care of it is simply sensible.
Peter Shand is a Partner with Murray Beith Murray and specialises in acting for high-net-worth individuals in relation to complex matters.
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Murray Beith Murray was established in 1849, as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day as does our commitment to be here when you need us.
