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What do you think about when you think about retirement? When it comes to considering your post-career options, there is no end of things to consider. At a recent roundtable in Hong Kong, we met with a number of wealthy individuals to find out what's on their minds. Taking the role of their own advisors, they uncovered a number of important issues - issues that could be of interest to all who are in a similar position.

At a recent roundtable event of clients and client advisors in Hong Kong, we considered the following case study about a wealthy, global family:

Peter (50) and Riya (46) are married with two children, Albert (22) and Sana (19). Peter, Albert and Sana have Hong Kong passports and Riya holds a UAE passport. Their family home is in Mid-Levels and they don’t have a mortgage. Peter comes from humble origins and Riya comes from a wealthy Dubai family.

Peter has his own garment company and has done well until recently. His business partner of 20 year, Steven (63), is slowly reducing work. Their annual turnover is about $100 million, with a net profit of about $2 million for each partner, significantly less than in the past.

Peter and Riya have a managed portfolio of $15 million, trade Asian stocks and hold $3 million in gold. Besides the family property in Hong Kong, they own two rental flats in Dubai. They also have a holiday home in Phuket and several properties in London. The London properties have been financed with the help of a bank.

Albert and Sana both attend medical school in the United States, with high tuition and lodging costs. It’s possible that one or both children will end up making a permanent home in the United States. Riya wants to protect their nest egg to make sure Albert and Sana, and any future grandchildren, are taken care of.

A variety of considerations

We had clients take the role of client advisors in examining the case of Peter and Riya. Here are the three issues that struck them as most critical:

Real estate taxes. Owning real estate globally requires staying on top of changes in the laws of all countries where real estate is owned. Starting in April 2017, UK residential real estate held within an overseas structure will be subject to inheritance tax. Peter and Riya should make sure that they take necessary steps now to prepare liquidity.

Cross-border inheritance. The laws of the country where assets are located have a significant influence on who can inherit them. The tax residence of the owner is also relevant. With Peter and Riya’s children living the United States, and assets globally, special care will need to be taken with planning to make sure that their succession planning vehicles are valid in all relevant countries.

Business continuity. It’s important to be aware of a business partner’s plans for succession. With Peter’s partner heading toward retirement, the intentions of his heirs need to be considered. It’s not only important to be aware of retirement intentions but also to be prepared in the case of death or disability. The possible decreased profits resulting from the death or disability of a key person can be mitigated by the right kind of life insurance.

Planning ahead

Many other issues were discussed during this fruitful roundtable, but these were the ones that stood out to our clients. Although it might seem daunting, the good news is that with proper foresight and expert know-how, all these issues can be managed for Peter and Riya, and others like them.