Capitalism, consumerism, possessions… we’re so swamped chasing what new items we want, but do we ever stop to think about what it is we are buying, especially those online? And worse, what will happen to them once we are gone?
In recent years, complexity surrounding inheritance issues has increased exponentially. More than ever careful consideration is required by all individuals to decide not only what their wishes are, but crucially what is the best way to ensure that their wishes are met?
We’re all guilty of ticking the terms and conditions boxes without much thought, but what do they actually reveal on closer examination? An example which has raised its head recently is that of Bruce Willis and his alleged ‘fury’ over his inability to leave his iTunes purchases to his children. The reason for this is clearly stated in the Apple Licensed Application End User License Agreement, “The Products transacted through the [App Store] Service are licensed, not sold, to You for use only under the terms of this license.” And it doesn’t stop there, ‘You’ may not copy distribute or make available over a network, or rent, lease, lend, sell, redistribute or sub-license the Licensed Application.
The message is clear, ‘You’ have effectively rented these books, movies, songs etc. for your lifetime and they can’t be passed on to anyone else. Before you buy any of these via Apple, you’ve agreed that, “[this] material that is owned by Apple and/or its principals, and is protected by applicable intellectual property and other laws, including but not limited to copyright.” It’s not only Apple materials, all of your music including CDs and vinyl and even your Gmail, Facebook, and Twitter accounts are all licenses too.
Trusts and Foundations have always been aspirational vehicles for estate planning, but they’re no longer viewed as only the entitlement of the upper classes. Trusts are one of the oldest ways to ensure assets are delivered to their intended recipients. In its simplest form, a trust is formed when someone places their assets in the legal custody of someone else for the benefit of a third party. Privacy and asset protection are key advantages of a trust, for example the terms of a will are in the public domain, and trusts are not. They are governed and utilized in common law jurisdictions, and historically the most popular jurisdictions are those where there is the most case law history, such as Jersey or Guernsey.
Foundations also offer privacy, succession planning and a high level of asset protection, but they also afford a higher level of control to the Founder. They have a special legal status based on civil law, which mix the legal components of a trust and a company. They have their own self-governing legal status, but no shareholders. The assets transferred from the Founder are owned and controlled by the Foundation. The use of Protector in a Foundation structure provides a more hands on role for those concerned about the potentially unlimited powers of Trustees to control assets.
The question is how can these licences be held in a Trust or Foundation for the benefit of someone else? In this legal minefield someone could die hard finding out.
(Written by Paul Hymers, Finance Director at Atlas Corporate Services)