With the recession now in full swing, we are all being more careful than ever when it comes to protecting our hard earned cash. This is certainly ringing true for our clients, whether they are going through a relationship breakdown and are seeking a settlement, or whether they are just starting out and want to protect what is theirs in the event that things go wrong later on down the line.
We are often asked, when dealing with financial settlements on behalf of our clients, to arrange for a proportion of their assets to be placed into a trust, most commonly on behalf of their children until they reach majority and beyond. In doing so we will work closely with our private client team, who are experts in the setting up and administration of trusts.
In carrying out this sort of work on behalf of our clients, however, it is of great importance that we bear in mind the implications of some recent changes that were introduced to the Proceeds of Crime Act 2002. From the perspective of family work, in addition to the familiar aspects of money laundering checks such as asking for 2 forms of identification, we must now give careful consideration to the purpose for which the trust is being set up, being alert to any unusual structure to the trust and also the jurisdiction in which it will operate. The risk of money laundering is greatest when at the time when the trust is actually put in place, because if the money that is put into the trust is "clean" money, then if there is a chance that the trustees are going to use that money for criminal purposes, it is they who will make those monies into the proceeds of crime.
On the flip side, we do come across clients who have unwittingly fallen foul of the proceeds of crime legislation and our Business Crime and Regulatory department are happy to provide specialist advice and assistance in this respect.
Justine Osmotherley is a Senior Associate in the family team and is happy to discuss any aspects of this. She can be contacted on 0113 3363323 or by email on firstname.lastname@example.org
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