How to structure luxury assets as part of private wealth planning

Luxury assets often form part of a much wider picture encompassing businesses, investments, property and family wealth across multiple jurisdictions. 

Yet while considerable attention is given to the governance and administration of investment and business interests, luxury assets can sometimes sit outside that thinking. 

For the owner, a useful question to ask is: you have people managing your investments, businesses, and property, but have you applied the same discipline to the valuable assets that you and your family use and enjoy? 

As the number, value and complexity of those assets increase, managing each independently can create unnecessary fragmentation. A yacht may sit within one ownership structure, artwork may be personally held, cars registered elsewhere, and an aircraft managed through another provider, with different advisers, insurers, accountants and administrators involved along the way. 

The individual arrangements may be sound, but without consolidated oversight, owners can be left with duplicated reporting, multiple billing arrangements, unclear responsibilities and limited visibility over what these assets collectively cost to own and operate. 

The appropriate structure will depend on the asset, where and how it will be used and the owner's wider circumstances, with questions of liability, privacy and regulatory compliance also requiring consideration. 

Beyond the structure itself lies corporate administration, contracts, accounting, insurance, VAT and customs considerations, expenditure management, regulatory requirements and, potentially, crew and operational matters. 

Art, aircraft, classic cars and other valuable assets bring their own considerations, from provenance, insurance and storage to ongoing administration and reporting. 

For owners, the objective should not be to become experts in each of these areas. It should be to ensure the right expertise is coordinated around them, with clear ownership, administration and reporting from the outset. 

There is another question that is easily overlooked when an asset has been acquired principally for enjoyment: what happens to it in the future? 

Luxury assets can have significant financial value and often carry considerable emotional value too. A yacht associated with years of family holidays, an art collection built over a lifetime or cars intended to pass to the next generation can present very different considerations from those of an investment portfolio. 

Bringing these assets into wider wealth and succession discussions can help families consider future ownership, governance, use and administration well before decisions need to be made. 

At Praxis, our private wealth and specialist yacht services teams work alongside owners and their advisers to bring these different elements together. We can establish and administer appropriate ownership structures, coordinate specialist advisers and manage the ongoing corporate, fiduciary, accounting, reporting and operational requirements that sit behind significant assets.

Luxury assets should not sit separately from the family wealth architecture. In our view, the ultimate luxury is being able to enjoy the things you have worked hard to acquire, without having to manage all the complexity that sits behind them.