Why is it essential, especially for overseas asset owners?
Having an estate plan can help you control your affairs now to maximize your net worth. Your loved ones can also take over in the event of your death or incapacity if you are unable to do so.
The more money you have, the more problems you seem to encounter, especially when you:-
- Would you like to retire. Where is it, and how much tax will you have to pay? What is the amount you want to leave? Do you have enough money to last the rest of your life?
- Consider your will. What assets do you own, where are they located, who should inherit them, how do they receive your valuables, and whom should you entrust with your affairs?
- Considering moving to another country – should you keep my existing assets? What are the tax implications of your new residence?
- Returning “home”. Even after living overseas for years, will you have to pay wealth taxes if you return home?
- Take a look at your wealth. How can you maintain control of your empire for the long term?
It is easy to get overwhelmed by these thoughts (which don’t affect us right now), so we stop thinking about them and put everything on hold.
This article aims to show you exactly how to think about your estate plan in simple steps.
You can also learn how to mitigate or remove wealth taxes but watching https://go.careysuen.com/VSL.
What consists of your estate plan?
- First and foremost, it isn’t just for your loved ones when you die. It creates tax efficiency while alive and provides a simple succession path when you’re gone.
- Where do you want to live in the future? It may not just be about retirement. You may want to move somewhere in the interim (through work or children’s further education).
- It may have a financial impact on your long-term plans. Many countries have wealth taxes in the form of capital gains, gift taxes, or estate taxes such as inheritance.
- Tax rules constantly change. Each country learns about additional taxes other countries impose through reporting mechanisms such as FATCA and CRS.
Starting your estate plan now could protect you from changes in the future.
Your money – create a list of all of your assets and liabilities. By doing this, you will be able to focus on each of your support for at least 5 – 10 minutes and consider what you want to do with them now. Either keep invested, maintain the property, appoint beneficiaries (to pensions or life plans), update addresses, etc.
Millions of dollars are left in financial institutes as no one knows these assets exist – this list is good to be kept with your will so that everyone knows what you own and owe.
Additionally, you must direct how they are distributed after your death if you have been collecting assets (crypto accounts, investment schemes, properties (under different names), etc.). Wealth taxes (capital gains, gift taxes, inheritance taxes) may affect the value of your estate now and in the future.
If you would like to know more about maintaining your highest net value through efficient planning, you can also visit https://go.careysuen.com/VSL.
Your people – while we primarily consider who we want to give our assets to (called beneficiaries). It is equally important to consider who you trust to handle your affairs when you cannot. When you die, this is an executor, but if you become mentally incapacitated, this is an attorney. If you set up a trust, you leave trustees in charge of the trust contents.
So consider your people in this order:-
- Executor. Who do you trust to handle administration and communication matters? Many people nominate their spouse for ease as they are collecting assets. Few would nominate a law firm, as the clock starts ticking when you die. Consider someone who can look after your affairs with a clear head.
- Beneficiaries – plan a considers who should inherit and in what order, whereas plan b is in case plan a cannot go ahead. Many people leave assets to their spouse and then their children – if your children are minors (under 18), you should also consider trust and your will.
- Guardians – if your children are under 18yrs, you should nominate guardians to look after them if something happens to both parents. It allows you to keep your children’s care private and immediate.
- Trustees – the people in charge of trust assets (who can help distribute in stages for young heirs and can keep your assets tax-efficient).
- Charities – the ONLY way to ensure that your causes or charities receive some of your wealth when you die is through a will.
Your estate plan
Will
Regardless of other instructions or arrangements you have in place, you need the will to collect all of your assets (called residue), such as your property and bank account contents.
A will must be read in the court of probate and provide details of your assets and who they will receive. When the court is satisfied, they issue a grant of probate, a letter to permit your executor to claim your assets.
Trusts
You may wish to include trusts in your estate plans; however, they can be separate if you want. It may be ideal to set up a trust for the distribution of assets over time (if your children are too young to inherit) or to receive income tax-efficiently (if you move to a state with high taxes). Or you may want to protect some assets in the future.
Living (inter vivos) trusts allow immediate distribution of assets to named beneficiaries as you have instructed in your Letter of Wishes. Pension trusts allow a steady tax-efficient income stream in many cases and can carry on being paid to beneficiaries after you go.
To learn more about trusts and estate planning and how to save wealth taxes, feel free to watch https://go.careysuen.com/VSL.
Legal Guardians
If your children are young, you should create guardianship instructions for dependent children or any other dependents under your care when you create your plan.
Nominated Beneficiaries
Apart from naming beneficiaries in your will or trust, you should consider your life insurance, savings plans, and pension schemes to nominate your beneficiaries. The companies nominated as beneficiaries will receive your death certificate and pay directly to your named heirs – no court interferance.
Assets and Liabilities
Don’t leave anything behind! Keep a list of all your assets and debts so that you can keep track and your loved ones can collect them if needed.
Attorneys
These people act in our stead in case we become mentally incapacitated. They can make financial or medical decisions on our behalf.
Company Protection
If you run your own business or have (private) shares in a company, then it is essential how you nominate the distribution to either keep the business running or the value of your shares.
So, although it takes a little thought processing, estate planning does not have to be complex or complicated once you know what you’d like to achieve.
Let us help you craft a plan that will be flexible, adaptable to any changes, and above all, easy to understand so that you can maintain it for as long as possible.
To help you maintain the highest net value, watch our video on how to save US$000’s in wealth taxes: https://go.careysuen.com/VSL.
