Faced with the global pandemic of COVID-19, billions of people are confined, fearing contagion and economic paralysis, and waiting for the discovery of a vaccine that contains the virus.
In times of crisis like this, those who own wealth may be wondering if it is time to implement a plan for the protection and / or succession of the estate, or to review it if you already have it.
For this analysis it is convenient to ask the following:
- If we fell into a global recession, would my assets be properly protected from creditors, from higher tax burdens in the future, and from information exchanges between countries? Will it be enough to cover my old age and that of other older adults in the family?
- If I lose my abilities to manage the wealth, do I have someone suitable and reliable to supply me and take care of my basic needs? Would there be family consensus for someone else (a family member or a third party) to manage the estate? Should the protocol to be followed in writing in case of absence due to disability?
- If he died, could an inheritance process be the subject of a family dispute due to lack of liquid resources to cover the expenses of the process (i.e. attorney and notary fees and taxes)? Or because of unresolved differences between family members? Or for lack of consensus on how to distribute the goods? Is it advisable to transfer the estate while I am still alive, legally reserving control and enjoyment of the assets until my death?
Unfavorable answers to these questions can motivate an estate planning whose solutions will vary according to the needs of each case. It will depend on the country of residence and the marital status of each member of the family; the type of goods that make up the heritage; the location of the assets that make up the heritage; the degree of exposure to loss or impairment of equity; and the degree of cohesion and family harmony, among other factors.
With all this in mind, it is convenient to evaluate the convenience of protecting, and / or managing, and / or planning the succession of the estate through various legal vehicles and contracts. For example, through simplified joint stock companies, private interest foundations, commercial trusts, Trusts , life insurance, voluntary pension funds or pension insurance, wills and donations, among others.
By Ignacio Rafael Vélez , Partner of the Practice Group Tax & amp ; GPA Customs .