STEP’s Global Congress, coming up in Amsterdam this summer, will be looking into a number of topical issues, including how wealth is being passed on death to the next generations.

Wills do not represent the only way in which wealth is being transferred on death. A person can use a variety of other mechanisms, including donationes mortis causa, joint tenancies, trusts, life insurance contracts, and nominations in pension and retirement plans.

Indeed, today a significant proportion of wealth is being passed through means other than wills and intestacy. This is not just due to tax considerations but to speed up the transfer on death and to shelter assets from claims of creditors and dependants.

This development questions the role and the scope current succession law rules are having in the transfer of wealth, as many of these mechanisms are not subject to the same policy driven rules applicable to wills. Thus, much of the transmission of wealth is no longer governed by the rules of succession.

In the US, these modes of transfer are grouped under the category of ‘will-substitutes’, that is to say instruments that allow for a transfer of wealth outside conventional probate procedures. Although much has been written about the effect of the use of ‘will-substitutes’ in the US, little is generally known about developments in other jurisdictions. And yet, ‘will-substitutes’ are becoming increasingly popular in many jurisdictions.

The aims of this talk are to provide a comparative overview of the most common instruments used, especially in the US and in Europe, and to explore why people transfer their wealth through alternative devices.

We will also explore the potential problems their use is creating for the operation of current succession laws and discuss the consequences that ensue for creditors as well as family members and dependants.

 

Alexandra Braun, Associate Professor of Law, University of Oxford.