Financial, Estate and Succession Planning

We help to analyse the financial situation of our clients considering their income and expenditure, assets and liabilities, taxes, real estate, retirement planning and pensions and inheritance law situation and assist them in creating an individual financial plan.

Effective structuring of the client’s business and investments during his lifetime is an integral part of any estate plan.

  • Who will look after my affairs if I am unable to?
  • Do I need a will?

A business succession strategy, providing for management and ownership of the company, partnership or trust, is important for many business owners and drafting and implementing an estate and succession plan will provide several benefits to owners and partners. Always considering the legal framework, Estate and Succession Planning allows the client to protect his wealth and transfer it to future generations.

Trust Services

IAP offers a broad range of strategies and products to seamlessly transfer the client’s assets to the next generation according to their wishes, and continue their legacy. If the next generation is still young, professional trustees can via a trust ensure the administration of the estate in the best interest of the child or children. Trusts, foundations and other wealth structures can help the client to manage his complex family wealth. They can help protect his family business and allow his wealth to be managed privately and independently. They can also provide continuity, preserving capital and helping family members enjoy financial benefits across generations. Our trusts and other solutions are designed to suit the client’s particular needs and ambitions, giving the client a global solution for managing his wealth.

A trust is a mechanism whereby one person (the ‘settlor’) may give away the enjoyment of assets to a group of individuals (the ‘beneficiaries’) while control and decisions on the administration and investment of those assets lies with others (the ‘trustees’).

The settlor is the person who provides the assets of the trust. Unless he is a beneficiary or reserves powers to himself in the trust deed he has no rights over the trust assets once they are transferred to the trustees.

The beneficiaries are the persons entitled or potentially entitled to the benefit of the capital and income of the trust fund. The extent of their entitlement depends on the precise terms of the trust.

The trustees hold the legal title to the assets upon trust for the beneficiaries. Their duty is to administer the assets in the trust and, eventually, to distribute them in accordance with the terms of the trust deed. They are in a strict fiduciary position vis-à-vis the beneficiaries, i.e. they must always exercise their powers in the best interests of the beneficiaries and, in particular, must not allow their own interests to conflict with those of the beneficiaries.

In law, the trustees are the legal owners of the trust assets and have effective control of them. The beneficiaries, as beneficial owners, merely have rights against the trustees. While these rights give the beneficiaries full power to enforce the trust in their favour, the fact that a particular beneficiary cannot be said to own or have control over the assets can be very useful in tax and estate planning.

Choosing a Trustee

Trustees ultimately accept personal responsibility and legal liability for the financial welfare of the trust fund, so selecting a responsible trustee to protect, manage and distribute the assets in a trust is a key decision that will have lasting implications. It is essential to have a trustee with professional legal knowledge and financial expertise, as a trust may involve generations of work, detailed record-keeping and coordination with lawyers, accountants and other advisers. Trusts and other structures may also involve complex management, in addition to challenging financial and investment decisions. Throughout their history, trusts have been used for a wide range of purposes:

Avoidance of Probate

Where assets are transferred to a trust, they are outside the estate of the settlor. This avoids the need to deal with those assets in the event of the settlor’s death.

Trusts for Children/Grandchildren

Parents or grandparents often create flexible trusts for the benefit of children or grandchildren who may be too young or financially unsophisticated to benefit from an outright gift. Trusts provide a mechanism for the long-term retention and control of assets.

Trusts for Those Under a Disability

A trust can be used to hold and administer assets for those who are unable to hold assets themselves, e.g. minors or the mentally disabled.

Family Company Shares

A settlor may wish to encourage his or her children to become involved in the family company but is perhaps unsure of the relative extent to which one child or another should benefit. If he or she transfers the shares to a trust, the settlor can remain in control of the company (subject to tax considerations) by acting as one of the trustees and can thereby continue to exercise voting control over the shares gifted into trust. The settlor may also continue to exercise management control as a director (but their salary as such must be restricted to commercial levels).

Trusts to Protect Assets

Trusts can be used in certain limited circumstances to protect the settlor’s assets from creditors, disinherited heirs, claims by the ex-spouses or former civil partners of children or grandchildren and the risks associated with political instability. Often it is sensible to use trusts based in a different country from the settlor for this purpose. How far they are effective to protect assets will depend on the law in the settlor’s country of domicile or residence and the law under which the trust is established.

Benefits

  • Preserve family businesses for future generations
  • Adapt plans to changing family circumstances and avoid disputes
  • Minimize taxation for multinational families with world-wide assets

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