Category Archives: Assets

Spotlight Profile – Sanam Ramchandani, LCA Solutions

In this spotlight profile, we are speaking to Sanam Ramchandani, Deputy CEO and Founder of LCA Solutions. LCA Solutions is an award-winning multi-family office based in Hong Kong that services its clients overall needs as a “One Stop Solution center”. Originally focused primarily on financial issues they also provide a forum to discuss and source answers to the numerous non-financial issues clients may face including topics such as succession, generational transfer, matrimonial structuring and family governance.

Sanam, thank you for taking the time to speak with us today.

Can you tell us a little bit about your background and why you decided to create your own Multi Family Office?

For the last 30 years, I have been in the financial industry and actively participated in growing the Asian Private Banking space that we see today. Before founding LCA Solutions in 2010, I had been in senior management roles within international banks directly servicing the needs of High-Net-Worth clients but also answering the requirements of the bank itself.

Following the financial crisis, I felt that a boutique approach was more conducive to offering the style of services I felt was needed for clients and hence started LCA Solutions, which combines the quality of the process driven models of leading international banks with the attention and tailor-made approach that only a boutique can afford to provide by servicing a limited client base. Quality and Passion is not easily scalable.

Can you expand on the link between your service offering and the need for succession and family planning advice?

We believe too much focus is put on investment related topics by Asian families while communication and succession issues are not appropriately dealt with, thus increasing the risk of future destabilisation within the family.

As human beings going through life, we all face issues and sometimes are overwhelmed by them thus procrastinating on our reply.

By facilitating discussions, we provide a forum to source answers recognising that starting the process is not always easy without external help.

In your line of work, you need to take into account various family issues, one of which being marriage and potential divorce; How do you approach these situations with your clients?

Many patriarchs and matriarchs are extremely worried about their sons or daughters getting married to individuals that may be less wealthy than themselves. From our experience, they most commonly ask about trusts, prenuptial agreements or postnuptial agreements to protect their children from potential “gold-diggers”; but also protect the overall family assets from future issues arising through the actions of a specific family member (like Divorce).

This might sound really “unromantic” but parents, especially wealthy ones, will always have a legitimate concern about the intentions of their children’s future spouses.

Our advice is hence to always start these types of discussions early with all family members and not when they bring someone home for whom they have serious feelings or are in the process of divorcing. You need to discuss concepts without a specific person, or event, in mind in order to avoid being perceived as targeting that specific individual or issue.

We advise the family that to succeed, such discussions must rely on the buy-in of all those concerned and must be perceived as transparent and fair (or at least with adequate explanations on the reasoning behind the potential contentious decision) in order to have the highest chance of long-lasting success and avoid future destabilizing issues within a family.

Specifically speaking, I know you focus on assisting women with their respective financial issues. Can you explain more about what you’re seeing especially in Hong Kong and how you’re trying to empower your women clientele to take charge of their lives and give them financial freedom?

During my career, I noticed that many women in general leave financial matters to their spouse as they feel that it is a world that is too complex for them. Many times, women feel that their time is better spent in either raising a family or advancing their career and really burrowing down doing so. That is why women do very well in general.

Although I do not focus on women as such, I have come across various situations and have noticed a common thread of anxiety that women seem to have when they have to deal with financial issues.

It is with this is mind, that I feel that being a woman myself who has been in the financial arena for over 30 years, my experience may be valuable to other women. As a wealth manager, I see my job as someone who can definitely minimize the anxiety as a result of the “unknown”.

Financial freedom stems from the fact that you know you will be able to continue a certain lifestyle that is comparable to what you were used to.

Why do you think it’s especially important to educate women about financial freedom especially in Hong Kong?

Whether it is in Hong Kong or elsewhere, women should feel comfortable when discussing financial issues. To achieve that, it is important that they have the opportunity to understand the various concepts at hand in the financial markets and not be taken aback by the “jargon” used that makes it look more difficult than it is.

As mentioned before, most believe that financial freedom is obtained when your financial income provides enough to cover the needs of your lifestyle.

Since you should not spend what you do not have, it is important to be honest and realistic about financial expectations and hence the most important element is to have the client understand when the capital amount at their disposal is not enough to generate their required cashflow.

Hong Kong is one of the most expensive cities in the world so when talking about the financial impact of divorce, the hardest talks are often the most important ones to have. Discussions such as moving to a less expensive city or, in the case of a housewife, re-entering the workforce in one way or another should always be discussed as a potential solution; even if not the preferred choice for some.

But it is important to have an honest and realistic discussion; only then can someone feel they can make the right decision for them and regain control.

What tips can you provide women who are going through a divorce and how to uncouple in a way that brings financial freedom and independence?

When heading towards a divorce, you sadly need to prepare for the worst and hope for the best; thus, I advise clients to map their assets, so they know what they could expect from the proceedings.

Too often we see that the wife has limited knowledge of the intricate details of the couples’ financial situation. Hence it is important for them to obtain that information, or at least gather as much as possible of the available information.

Emotions, by definition, are always going to be high and as financial advisors, it is important for us to try to defuse the situation as much as possible so the client can focus on the financial facts.

Staying calm and objective, is easier said than done, I know. Once the decision is made then it is imperative to look at the situation objectively and “keep calm and carry on”.

The emotional toll of going through a divorce is bad enough without having to worry about how to manage your finances. But it is important to always remain realistic about financial issues.

Our goal is to ease part of that burden by answering four action points for our clients: understand what level of financial freedom they can expect from their divorce settlement, open new private bank accounts for them to start afresh, formulate the investment strategy that will be required to achieve their financial objectives and finally implement it while reporting back to them in full transparency so they can have peace of mind to focus on other issues.

Independence is also a frame of mind which can only be achieved if one feels at ease and in control. To know exactly how much you have, and how much you can spend, is definitely a big part of that control.

About Sanam Ramchandani:

Born in Hong Kong, Sanam has over 30 years of experience in the International Financial Industry. She co-founded LCA Solutions, an award-winning Hong Kong multi-family office, whose primary focus is providing wealth management services to individual clients, families and their family businesses. As an SFC regulated multi-family office, LCA Solutions provides a complete range of investment services but also a forum to discuss non-financial issues such as family governance, succession planning, matrimonial structuring etc. Through her own experience and network, Sanam can answer all your financial needs as well as help source answers to issues such as prenuptial or postnuptial agreements, divorce proceedings or family matrimonial structuring.

For more information about Sanam Ramchandani and her company, LCA Solutions, you can visit their website: https://www.lcasolutions.asia/

Silver Linings in Divorce

It is a new year and we can never predict what lies ahead, but there are definitely many adventures to be had. If you are going through a divorce, there may be many challenges ahead, but regardless of the challenges, there is always a silver lining in every difficult circumstance.

With that being said, I have listed some of the common challenges you may face dealing with divorce this year, but alongside that I have also listed some of the wonderful accomplishments and adventures you may gain along the way:

1. Heartbreak Over A Failed Relationship. When divorce happens, there is heartbreak, especially if you are the spouse that wanted the relationship to work. Understandably, heartbreak is emotionally and physically taxing and can be magnified in divorce. You and your spouse have invested considerable time into each other and there are many dreams you both had for your family. While it is normal for individuals to go through a grieving process, this is also a wonderful time for you to focus on what is ahead. Set new personal and professional goals, think about some of the hobbies you have always wanted to master and the places you have always wanted to see, especially if Covid-19 restrictions are on its way to being eased in Hong Kong and around the world! For many of you, this could also mean a new start in building new relationships and getting back into the dating scene. Divorce is not the end and there are many wonderful experiences and memories you will encounter over your lifetime.

2. Finance Woes. Divorce can wreak havoc on your finances. For example, a court may order you to pay monthly maintenance for your spouse and for the children, which will cut into your monthly income. In a divorce settlement, you may be required to pay out a significant sum to your ex-spouse to equalize the division of assets and debts. The nest egg you saved in your retirement accounts may also be cut in half as part of a divorce settlement. While the financial pressures associated with divorce can cause great stress, this is also your chance to become empowered to take charge of your finances and create a roadmap for your future financial success. It is during this time that it would be beneficial for you to meet with a financial expert to plan a budget and manage finances following divorce. If you are the receiving party to maintenance, it is not wise to squander your monthly support cheques or your lump-sum divorce settlement with no thought to your financial future. This may also be a good time to think about entering back into the job market and should be discussed with your solicitor about how this will play into your divorce.

3. Co-parenting Rocky Road. In divorce, you and your ex-spouse will begin to co-parent. For some parents, co-parenting is easy with no issue. However, other parents find co-parenting a nightmare and have difficulty communicating with each other. Co-parenting may be difficult for parents, but this “new normal” is also very difficult for children and pets. Remember that this is difficult for everyone involved, especially when you and your ex-spouse are sparring over co-parenting issues. While co-parenting can be rocky, it is a great opportunity for you and your ex-spouse to work on communication skills with one another and with your children. Talk to your children about what the divorce means for them and how it will affect their relationship with you. Ask your children how they feel and what you can do to make the transition easier. Using this difficult situation as an opportunity to build communication bridges with your children will be rewarding in the long-run. Remember that it is important not to use your children as a weapon against your spouse during divorce proceedings. Avoid talking to your children about adult issues related to the divorce. Finally, now that a new family dynamic is being created, this is also a great opportunity to create new traditions and new routines for your family.

With the start of the new year, consult with your attorney about how you would like to proceed in your divorce and the goals you would like to see by the end of the year. Setting goals for your divorce will help you overcome every challenge you face during divorce. Once you get past the challenges, you can then look back and be proud of your accomplishments.

Considerations Before Relocating Your Children

Hong Kong is a cosmopolitan city, attracting many individuals from various countries to live, work and raise children. In the heat of a divorce, many expatriates may decide they no longer want to remain in Hong Kong and many times, individuals decide to relocate back to their home country. Unfortunately, this may be a complicated situation if you and your spouse are from different countries and the neutral destination to raise your children may continue to be Hong Kong. With that being said, if you are set on relocating with the children in the midst of a divorce, there are important things to consider before you make a final decision to move away with your children.

First of all, if your spouse does not agree to you and your children’s relocation, your plan for a fresh start may not be as easy as you think. Relocation applications can be extremely expensive and can result in a long drawn-out litigated process through the Family Court system. While the Family Court will consider your request to move the children out of Hong Kong, it is usually not a quick decision but rather a well thought-out order by the Family Court. Thus, it could be months or even years before you are given the green light to move with your children to another country.

Before you make a decision to remove your children from Hong Kong, here are some helpful tips to consider before you make this life-altering decision:

1. Think About the Best Interests of Your Children
Is this move beneficial for your children? When you relocate your children, you are moving them away from the other parent. That may be appealing to you in a messy divorce, but to your children, this may be a devastating reality. Think about what is in the best interests of your children first and foremost. If your ex-spouse has an equal timeshare with the children, it may not be that easy to move the children away from their current home country. You will also want to consider the fact that you may be moving your children away from the support system (both family and friends) that they are used to. When this becomes a litigated matter, your desire to move away may not happen immediately, so you also need to consider what the best timing is for your children’s transition in this relocation. If your children are old enough to understand your decision to move, you may want to have open dialogue with them as to their wishes on whether they want to move at all.

2. Have a Plan
Have you thought out the relocation plan all the way through? What school will your children attend and is this school up to par with the current school that your children are attending? Who is going to help care for the children when you are unable to be there for them? Do you have family and/or friends who are in the vicinity to help with childcare and be a support system to you and your children? Do you have a job lined up and is this really a better opportunity than the current employment situation that you are facing in Hong Kong? These are just a few questions to ask yourself prior to the relocation of your family. These are also some questions the Court will want you to explain prior to making its decision so it is important to have a plan and not make a decision based on a whim.

3. Communicate With the Other Parent
Communicate with the other parent about your desire to move. You may be surprised that he or she may be willing to work with you in allowing the relocation. This will also help you avoid costs associated with a litigated motion to move. Communicating with the other parent will also help you and your ex-spouse figure out an appropriate parenting plan and visitation schedule, which may include online “virtual visitation” through Skype, Facetime or ZOOM. It is also important to discuss travel expenses for visitation now that the two of you are no longer living in the same city/country. Open communication may reduce conflict between you and your ex-spouse and reassures the other parent that you are not trying to cut him or her out of the children’s lives. It shows the other parent that you want them to be involved despite the distance.

These are some important questions to ponder upon before you make an ultimate decision to move forward with a relocation application. It is important to remember that Hong Kong is a member of The Hague Convention on the Civil Aspects of International Child Abduction and any individual who unilaterally and wrongfully removes a child from the jurisdiction will be subject to the Convention. Thus, it is important that you speak to a solicitor in this process so that he/she will be able to help you navigate the legal system in this life-changing decision. Ultimately, this should not be an impulsive decision but one that is well thought out and planned appropriately.

Clean Break In Divorce

When you divorce in Hong Kong, the term “clean break” may be floated around when discussing ancillary relief or financial provision (or more commonly known as “maintenance” in USA jurisdictions). So what is a clean break in a divorce? Clean Break simply refers to the distribution of property and/or payment of a lump sum to settle all financial matters, allowing the parties to move forward with a fresh start and without having to be reminded of the breakdown of the marriage by being tied to ongoing payments.

Under section 7 of the Matrimonial Proceedings and Property Ordinance (Cap. 192), the courts in Hong Kong are under a duty “to have regard to the conduct of the parties and all the circumstances of the case” including the following matters:

The income, earning capacity, property and other financial resources…;
The financial needs, obligations and responsibilities…of the parties…;
The standard of living enjoyed by the family before the breakdown of the marriage;
The age of each party to the marriage and the duration of the marriage;
Any physical or mental disability of either of the parties to the marriage;
The contributions made by each of the parties to the welfare of the family…’
…the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution…of the marriage, that party will lose the chance of acquiring.

In Hong Kong, the courts are not under any duty to consider whether a clean break is appropriate or not but it may be considered. Generally speaking, a clean break is only an option when there is sufficient monies in a matrimonial pot which would allow the parties to move forward after the payment of one lump sum payment/distribution of property which would settle all financial claims.

In one such case, C v F [2008] HKFLR 1, the parties had a long-term marriage which began in 1965 and a Petition for divorce was filed by the Husband in February 2000. Throughout the marriage, the Husband’s business had grown to the extent that he valued his assets at approximately HK$36 million with an income of approximately HK$800,000 per month. The Husband alleged he had considerable debts as he was heavily indebted to the company and to his business partner. The court ordered a transfer of the former matrimonial home, mortgage free, to the wife and a clean break lump sum to her of HK$15 million.

In YN v NA [2014] HKFLR 517, the court stated that “in big money cases, where the matrimonial assets are sufficient for a clean break to be achieved, a wife with ordinary career prospects is likely to have been compensated by an equal division of the assets and consideration of how the wife’s career might have progressed is unnecessary and should be avoided.”

It should be noted that once a clean break is achieved, a party cannot come back to the court and make an application for maintenance. This in itself is the benefit and advantage with respect to a clean break: it allows the parties to move on with their lives, without being tied to each other by having to make monthly payments to one party and allows each party to live independently without any burdens of the past.

If you are going through a divorce, speak to your solicitor about a clean break and whether it’s the right option for you. If there is a possibility of self-sufficiency, a clean break should be considered an option. If you are concerned about an immediate clean break, discuss alternative options such as a deferred clean break or even consider nominal maintenance which would then allow you an open door to make an application for periodical payments in the future if need be, but at the same time lift the financial burden on the paying party at the current moment.

Misconduct In Divorce

In what will be considered one of the most stressful times in an individual’s life, it is no surprise that many people behave badly during a divorce. It is a stressful life event, that many reckon to be on par with the death of a family member. With that being said, it is important that if you are going through a divorce, your conduct throughout the proceedings is important and it could have an impact on your divorce. To behave poorly is a reflection not only on your character but also affects the actual outcome of your divorce.

In a divorce, your conduct in the course of proceedings can be taken into account by the judge, although generally speaking misconduct during the proceedings is more properly dealt with in an adverse application for costs against you.

What are some examples of “bad behaviour” and misconduct in a divorce? Wanton dissipation/reckless dissipation of assets is one form of misconduct. In KMD v PIB [2011] HKFLR 351, the husband was excessively spending on his lifestyle as well as his hobby of flying helicopters and this was taken into account by the court, resulting in HK$1.2 million being “added back” from his 50% shares into the matrimonial pot for division. In MKKWH v RKSH [2013] HKFLR 540, the husband maintained three (3) other families over a period of years and post-separation the wife sought to add back an equivalent sum of monies that her husband had spent on his other families. In this case, the Court of Appeal refused the wife’s application to add back these funds on the basis that the funds had been received post-separation. In A v B [2017] 1 HKLRD 187, the court held that payments to a girlfriend of HK$1.2 million was “wanton” and “reckless” and “extravagant” in view of the marital assets and the standard of living, and the court therefore added back into the matrimonial pot, the non-marital spending.

Material non-disclosure is another form of misconduct in litigation such as monies being hidden. In SANK v PGN [2011] HKFLR 390, the court considered whether a husband’s non-disclosure and refusal to mediate should result in a costs award to the wife. The court concluded that “[t]here are many reasons which may affect the court in considering costs, such as culpability in the conduct of the litigation; for instance material non-disclosure of documents.” Parties to a divorce have a duty of full and frank disclosure and by failing to disclose, the courts will take this misconduct into consideration.

Another form of misconduct is a refusal to attempt to settle. In LWF v LMF [2015] HKFC 146, the wife’s failure to respond and attempt to negotiate was a relevant factor for the husband being awarded costs. The same misconduct label is also attached to litigants who refuse to provide evidence and/or participate in proceedings such as filing necessary paperwork and/or attending court hearings. By refusing to participate, the court will have no choice but to see the case as one-sided and only make decisions based on the actual evidence in front of the court.

The courts in Hong Kong have a duty to have regard to the conduct of the parties to a marriage. Negative marital conduct can be detailed in sworn affidavits filed with the court and will be considered by the court as a material factor in allowing the court to depart from equality (See LKW v DD). However, it is to be noted that if there is a departure from equality, the courts will look for “obvious and gross” misconduct for it to be taken into account.

Spotlight Profile – Sanam Ramchandani, LCA Solutions

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