What’s next for the Starks and Lannisters in terms of tax planning to preserve family wealth? Private wealth lawyer and GOT-fan, Corinne Staves, explains
Winter has finally arrived, and after seven gruelling series, Jon, Sansa, Arya and Bran find themselves back at Winterfell for a family reunion.
Having lost their parents and two siblings, and facing imminent battles with House Lannister and the White Walkers, not to mention three grumpy dragons if Jon fails to woo Daenerys, the family is facing challenging times. Jon and Sansa seem to have developed into mature individuals with natural leadership abilities, whereas Arya is more of a wild card; she coped admirably on her own as a teenager but has an alarming penchant for ruthlessly slaughtering her enemies and Bran the Three-Eyed Raven is now wheelchair-bound and a bit of a dreamer.
How can the Stark family tackle these challenges and pull together to protect their family home and legacy to emerge victorious and united?
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These sorts of challenges are not news to international high net worth families who have grappled with difficult family dynamics. What options are there for the Stark family?
In an ideal world, before their early departures Ned and Catelyn would have instigated a discussion about a family constitution or family policy. Although rarely legally binding, agreeing the terms of such a document is an invaluable opportunity for family members to agree on and ‘buy into’ the family’s collective objectives. The content will vary from family to family, but they usually cover contentious issue such as whether wealth can be spent or whether current family members are custodians for the next generation. They can also broach what the family consider is fair.
Should everyone be treated equally? Jon Snow might be alarmed to hear that distinctions are sometimes drawn for illegitimate or step children. Equally, it might be agreed that there should be more support for family members with disabilities, or a lower likelihood of succeeding on their own, like Bran.
Family constitutions can also address in advance tricky issues such as agreeing that everyone will have a pre-nuptial agreement, before an offendable, prospective spouse is on the scene. Luckily Sansa’s late husband Ramsay Bolton is out of the picture now, but it seems unlikely he would have responded positively to pre-nuptial discussions, with the requirement for full disclosure and separate legal advice for both parties.
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Finally, mechanisms to help resolve tricky succession issues, such as choosing the next leaders of a family business, or who should be King (or Queen?) in the North, could be addressed in a family constitution.
A family constitution might ultimately be unnecessary for the Starks, who all seem to get along pretty well at the moment and have restrained spending habits. By contrast, Cersei’s attempts to execute her younger brother Tyrion and his subsequent decision to slaughter their father and flee, have led to an understandable rift among the Lannister siblings. They also now share very different social groups, with Kingslayer Jamie literally caught in the middle.
We know the Lannisters pay their debts, but it would be interesting to understand how they share their wealth. A family trust might have been wise, leaving the difficult decisions about how to provide for family members with different needs to impartial, independent trustees. In the earlier days, trustees might have protected Tyrion from frittering money away on wine and female companionship, and helped Jamie with expensive medical bills. Golden prosthetics are not cheap.
If the Seven Kingdoms share a similar inheritance tax system to the UK, a trust could also have protected the Lannister’s dwindling fortune from the 40 per cent inheritance tax bill on the untimely deaths of Myrcella, Joffrey and Tommen, although the latter two may have benefitted from the full inheritance tax exemption by passing their assets to wife Margaery. If so, Cersei’s decision to blow up Margaery (and everyone else within the Red Keep) was fiscally questionable.
Either way, families should not overlook the importance of putting wills in place for family members after they have turned 18. Lasting powers of attorney in the event of loss of mental capacity are also simple but vital planning steps for all family members, old or young, although in Westeros everyone seems surprisingly sane, and indeed Bran seems to be coping admirably with excess mental capacity.
So what’s next for the Starks and the Lannisters? Ideally, a sensible discussion about family objectives leading to the formulation of a robust family succession and estate planning strategy, but probably more of the same: deception, fighting, intrigue and death.
Corinne Staves is a partner at boutique private wealth law firm Maurice Turnor Gardner LLP (and spends too much time watching Game of Thrones).
