INTRODUCTION Contributed by: Basil Zirinis, Elizabeth Kubanik and Megan Eitel, Sullivan & Cromwell LLP
However, in 2025, FinCEN significantly narrowed the scope of the reporting requirements. Under the final rule, the definition of “reporting company” generally only includes foreign companies that are registered to do business in any US state or tribal jurisdiction. US companies are no longer required to report ben - eficial ownership information to FinCEN, and foreign reporting companies are not required to report any US persons as beneficial owners. The substantial reporting burdens imposed by these types of regulations have had a notable impact on the offshore trust world. Many smaller trust companies simply do not have the resources to comply with the complex regulations, and the risks of incorrect report - ing often outweigh the benefits of taking on clients from certain jurisdictions. Some commentators have questioned the privacy implications, as well as the efficacy and fairness of the burden placed on individuals, families and advis - ers by these expansive transparency and oversight frameworks. In particular, practitioners are increasing - ly challenging the requirement that court proceedings relating to trust administration or related intra-family matters be kept open to the public where not spe - cifically requested by the parties. These proceedings generally involve non-contentious petitions, brought with the consent of all the interested parties. Under such circumstances, the public’s general interest in transparency may not justify the impairment of the liti - gants’ privacy. Commentators suggest that the norm of public access to court proceedings in the UK and other jurisdictions is likely to drive trust administration business to offshore forums. Rise of estate and trust litigation The world is in the middle of the greatest generational transfer of wealth in history, and cross-border estate and trust litigation has never been busier. Trustees find themselves entangled in a rising number of complex and costly cross-border disputes, often serving as the target of aggrieved beneficiaries (or excluded family members) in jurisdictions that have forced inheritance laws or that do not recognise trusts. A global reces - sion would likely increase the occurrence of such disputes as, for example, trustees must determine whether or not to distribute assets to beneficiaries
in difficult financial positions, and make investment decisions in a volatile market. Litigation in the areas of bankruptcy and fraud may also increase. The issue of requisite capacity in the execution of documents such as wills and trusts has become a dominant consideration. With increasing frequency, lawyers are ensuring they have evidence of their cli - ents’ requisite capacity at the time of execution, as well as emphasising the importance of planning for a client’s future incapacity, such as with powers of attorney and succession planning. Whether representing fiduciaries or challengers, anticipating litigation can go far towards increasing the likelihood of obtaining a favourable result (wheth - er through the courts or via a negotiated settlement). The greatest risks in multi-jurisdictional trust litigation come from the potential clash of laws and procedures of the different countries, yet these inconsistencies also create opportunities for surprise and victory. The litigation team that truly understands the intricacies in each jurisdiction and appreciates the contrasting cultural forces can exploit the gaps that are created to its substantive and procedural advantage. Artificial intelligence (AI) Rapid advances in AI technology have dominated headlines over the past several years, particularly with the rise of widely accessible AI chatbots. More so than ever before, companies are incorporating AI technology into the workplace, and such technology is quickly transforming the way people work and live. However, many commentators have also raised con - cerns about the impact of such rapid advancement and whether AI technology could also be harmful as it progresses. The rise of AI technology raises potential issues in the legal sector as well. Many lawyers and law firms have started to harness the power of AI in their day- to-day work, but questions remain as to whether AI will eventually be able to replicate certain skills of legal professionals. While AI may aid lawyers in the future, lawyers should evaluate the skills that may not easily be replaced, such as emotional intelligence and the personal relationships they have with their clients.
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