The chances of wealth being transferred successfully to the next generation, especially in the heat of economic pressure and COVID-19 pandemic, without incurring liabilities are more complicated now than ever before.
This is ironic given today’s world offers many accessible tools and estate planning vehicles such as Wills, Trusts, and Foundations. In breaking down this claim in today’s world, owning valuable assets does not guarantee the value of the assets will be preserved when transferred to the next generation. In worse cases where there is intestate succession, i.e. no Will or mechanism in place to pass on wealth, this function is left to the state to decide.
Even if an estate plan is in place, it would also need to provide adequate asset protection and future growth. One also needs to guard against excessive professional fees charged against an Estate that is fraught with complications on death.
I was asked at an ARM Trustees webinar recently that if your claims are indeed valid, how does one ensure that wealth is transferred and enjoyed by one’s next generation? First, we must be willing to leverage estate planning tools like Wills, Guardianship documentation, Trusts and Foundations, and the utilisation of relevant co-ordinated structures for larger and more complex estates.
An Estate Plan, be it local or international, includes having strategies in place to manage: the effect of inheritance tax, ease of wealth transfer and business succession relating to investments, real-estate, your pension fund, and other assets, which could form a significant portion of your wealth.
An estate plan will help individuals and families with both local and international assets, investments, and business operations give careful consideration and properly document their holdings to ensure the assets are protected and passed on to future generations.
This is effective, legally robust, practical and efficient. Estate planning offers you protection without borders, especially considering potential shifts in Residency and Citizenship, which may impact one’s wealth. Effective management and ownership of a business operation can also be safeguarded by setting up a Succession plan.
In conclusion, families who seek to get started on understanding what is required for an estate plan or indeed would like to set one up should consult a Trustee firm with years of experience in this field and one that offers international solutions.
Article was written by Henry Hollingdrake, an Investment Banker and Consultant to ARM Trustees