Patrick Lim
Partner at Raj, Ong & Yudistra
As you may well have heard, during the divorce proceedings of the PSG and Moroccan defender, Achraf Hakimi, it came out that he had been placing most of his fortune in his mother’s name for a long time, reportedly even before his marriage to his now ex-wife.
While we are going to steer clear of the causes of the divorce, we are going to take a look at the management of his assets (estimated to be worth €70 million) from a Malaysian legal perspective. Our examination is based on what we could gather from news reports.
Is it legal?
At the moment, there are usually no laws preventing you from gifting anyone else money or assets, provided that the gift is not for an unlawful purpose (bribes, money laundering, etc.) or used as a mechanism to defeat the law (disposing assets to avoid creditors, etc.). In determining this, timing and intent matters. If you start gifting your money and assets after you find out you are in trouble, then it is only logical that those gifts would be called into question. In Achraf Hakimi’s case, it appears he has been placing his assets with his mom for a long time now and because of this, it would be hard to argue that he did it solely to defeat his ex-wife’s claim.
Is it safe?
Provided that the mother of Achraf Hakimi has a will bequeathing the monies and assets to him, the money and assets would eventually return to Achraf Hakimi. If the mother passes on intestate, then things may get dicey. This method also relies very heavily on trust and familial ties, and would not be ideal for individuals who do not have such close family relationships.
Why do it?
We do not know his intent when he first started managing his assets and monies through his mom. What we do know is that it is highly advisable for high net worth individuals to outsource the ownership of their assets and monies. Apart from the obvious utility in the case of Achraf Hakimi, this practice usually serves the following functions:
- tax efficiency
- asset preservation that is not affected by your lifespan
- legacy and generational wealth preservation
- protection against creditors
- prevention of collateral damage or fallout from bad decisions (or as seen recently, #bankruns)
What other ways are there?
There is a wide selection of alternative arrangements, ranging from #trusts (living or otherwise), #foundations (onshore and offshore), #insurance arrangements (we are referring to the bespoke private arrangements and not the usual life insurance policies), and the “if you know, you know” kind of arrangement, #familyoffices (look it up, it is very interesting).
If I want to protect my assets, where can I go to find out more?
Apart from asking Google, a good place to start is by getting in touch with us.