Growing the Family Tree (2025)
By Helen Bradford-Swire, News Editor at STEP • January 2025
Helen Bradford-Swire examines the make-up of the ‘modern family’ and asks what practitioners need to consider when helping these families plan.
Asher Noor is quoted at length in the article.
Gone are the days of speaking of ‘the family’ as a married heterosexual couple and their biological children. The definition of a modern family unit has evolved to take into account sexuality, divorce and remarriage, adoption, IVF and surrogacy, cohabitation and civil partnerships, multi-ethnicity and multi-jurisdictional families and more.
The OECD Family Database (the Family Database), which encompasses the 38 OECD member countries worldwide, its enhanced engagement partners and EU Member States, notes a significant decrease in the number of marriages per 1,000 people over the half-century between 1970 and 2020.[1] Accompanying this decline is the increase in the average age of those getting married and an increase divorce rate. Across OECD countries, 10 per cent of individuals aged over 20 who are living with a partner are doing so as a ‘co-habiting’ couple: i.e., not in a marriage, civil partnership or registered partnership. The Family Database also notes that many young adults are now continuing to live with their parents.
At the same time, same-sex marriages are seeing an increase in recognition globally. ‘No OECD country allowed same-sex partners to marry in 1999, but by 2022 same-sex marriages are formally recognised in 24 OECD countries (or at least in some parts of their national territory)’, says the Family Database. ‘Moreover, in nine countries where same-sex marriage is not legal, same-sex couples are granted some form of legal recognition, either via rights and benefits associated with their de facto cohabitation or via the possibility for them to enter into a registered partnership. Only six OECD countries do not provide any recognition of same-sex partnerships.’
So what does these developments mean for the estate practitioner? ‘Things are now evolving at an extraordinary pace in the traditional family structure space’, comments Asher Noor TEP.[2] ‘Historically, what kept the patriarch or matriarch awake at night eventually boiled down to either how to keep it all in the family or how to rule from the grave. In recent times, the rapid pace of change of definitions of family, gender, marriage, parenthood, household structures and relationships mean that families and family business practitioners are now coming up against “out of the syllabus” scenarios.’
Coming together and coming apart
Regardless of current trends, divorce has always played a significant part in wealth structuring conversations, with Charlie Tee TEP,[3] STEP Public Policy Committee member, describing it as ‘the easiest way for a family office to lose 50 per cent of its wealth’.
He comments: ‘Blended families have been an issue to grapple with for a long time. Considerations of how people should benefit, for example a second spouse versus children from a first marriage, have always had the potential to cause tension if not managed well.’
Since the COVID-19 pandemic, the divorce rate in Australia has increased in line with administrative changes that allow divorces to be finalised more quickly. The United States Census Bureau reports that the number of US divorces is down, but this is coupled with a stagnation in marriage rates.[4] According to Eurostat, the number of marriages in the EU has been decreasing and the number of divorces increasing, although both trends have slowed in recent years.[5]
‘Conversations about pre-nups [prenuptial agreements] are becoming more prevalent and normalised: the stigma associated with a pre-nup or marriage contract has very much been removed,’ Tee notes. ‘Increasingly, family offices are undertaking stress-testing exercises looking at existing structures and how they might be vulnerable in the event of a relationship breakdown. Often, these discussions involve a blended team of advisors such as a private client lawyer, a divorce lawyer and a trust litigator, to bring a wide range of expertise to the table.’
Daniel Trimarchi TEP,[6] Co-Chair of the STEP Business Families SIG Steering Committee, focuses on the need for customised estate-planning strategies to consider each family’s unique circumstances.
‘Families are moving away from a binary outlook on wealth transition and are more open to exploring structures that look to find a better compromise between the collective and individual goals of the family’, he says. ‘The potential for divorce and remarriage means that, as generation one plans for the transfer of wealth to generation two, it is crucial to establish governance structures that can accommodate changes in family dynamics and align to the family’s definition of intergenerational wealth. This could include family constitutions, shareholder agreements and trust arrangements that can adapt to new family members and changing relationships.’
Bringing the children in
Although divorce may have been on the table for discussion for many years, an increasing conversation for practitioners dealing with the ‘modern family’ is that of children. Growing numbers of same-sex families and women choosing to have children later in life, along with huge advancements in reproductive technologies, means that different families have different definitions of ‘children’.
The global commercial surrogacy industry grew to an estimated USD14 billion in 2022. The figure is forecast to rise to USD129 billion by 2032. Meanwhile, at least 12 million babies have been born as a result of IVF and other assisted reproductive technologies. The UK’s Human Fertilisation and Embryology Authority reported a 10 per cent increase in fertility service activity between 2019 and 2021,[7] while the same year saw the highest number of IVF cycles on record in Japan.
IVF clinics in the UK have rigorous consent procedures around the use of eggs, sperm and frozen embryos in the case that one partner loses capacity or dies. However, it remains a moral and legal minefield to navigate.
‘Questions about issues such as post-death IVF or egg/sperm donation are increasingly taken into account when it comes to definitions of children, as the law can struggle to keep up at times’, explains Tee. ‘The international nature of many clients adds to this complexity as a child born to one of these methods in one jurisdiction might not be treated legally in the same way elsewhere, making it crucial to understand the exact nature and make-up of each family. It can also impact on older trust structures, which might not automatically include such family members in the definition of children.’
The key for families navigating all these issues – from divorce and remarriage to questions of what a child is – is accessible education, says Cindy Radu TEP.[8] ‘Families don’t know what they don’t know’, she says. ‘If they want to feel empowered in their planning and decision-making, then well-rounded, continual learning is key. When families start “early” and have a regular rhythm of facilitated family meetings, it is much easier to have these conversations proactively.’
The future is now
Such education, Radu says, is also key to cultivating ongoing stewardship of wealth through the generations and creating an ‘ownership mindset’ where all family members understand their roles and responsibilities.
But as practitioners bring in flexibilities to meet the needs of modern families and the clients themselves reflect on what structures are appropriate for a family’s needs in 2025, the pace of change is growing ever-faster.
‘As well as posthumous use of embryos, eggs or sperm, practitioners should brace themselves to deal with unconventional issues such as cryopreservation of bodies/brains; or, for example, where beneficiaries of the estate are family pets, robots or even digital avatars’, warns Noor.
‘The existing structures for estate planning are not fluid enough to cater to the challenges coming through from the extraordinary evolving family dynamics’, he comments. ‘What the future is gearing up to unleash means that the toolkit is already running short on tools. With the fair distribution ethos giving way to equality and now equity, our legal framework and structures are just not robust enough to be judicious in the current socio-economic climate. Imagine the amount of work in the estate-planning realm that now needs to be done to cater to modern families dealing with humanoids, posthumous reproductive rights and cryogenically preserved founders.’
[2] Asher Noor TEP is an Advisor at Odyssey SFO
[3] Charlie Tee TEP is Partner at Withers
[4] U.S. Divorce Rates Down, Marriage Rates Stagnant From 2012-2022
[5] Marriage and divorce statistics
[6] Daniel Trimarchi TEP is Director at KPMG
[7] Fertility treatment 2021: preliminary trends and figures
[8] Cindy Radu TEP, Family Wealth Transition Advisor at Cindy Radu Advisory
Originally published on: https://journal.step.org/step-journal-issue-1-2025/growing-family-tree
