inheritance – wealth management cern d. garioud – f. campagne
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Inheritance – Wealth Management
CERN D. GARIOUD – F. CAMPAGNE
18 mars 2010 CERN : Présentation Prisme Conseils. 2
Plan
InheritancesQuestionsWealth management (estate
development)Questions & answers
18 mars 2010 CERN : Présentation Prisme Conseils. 3
Inheritance
French inheritanceInternational inheritanceIdentification of the Marriage SettlementCase studies :
DivorceCohabitation
Our advices
18 mars 2010 CERN : Présentation Prisme Conseils. 4
Example used
English man married with a french woman, without prenuptial agreement.
They live in France, in a house they purchased together.
They have 2 children, both live in France. Wealth :
House : 500 K Savings : 300 K
18 mars 2010 CERN : Présentation Prisme Conseils. 5
French inheritance
After death, 4 steps :Who are the heirs ?What is part of the estate in case of
inheritance ?Tax returnShare the inheritance
18 mars 2010 CERN : Présentation Prisme Conseils. 6
Death – opening place of the inheritance
Main residence of the deceased and his spouse,
Not necessarily the place of death…(hospital, holidays…)
18 mars 2010 CERN : Présentation Prisme Conseils. 7
French inheritance – Who are the heirs ?
Is there a Will ? Devolution of property
Rule : depends on country
Privileged heirs or not (in case of will)
Rank heirs France Other
Spouse 2 1
Children 1 2
Others 3 3
18 mars 2010 CERN : Présentation Prisme Conseils. 8
Legal – Three key words
Usufruct : Ability to live or rentBare ownership : own the object, without
the right to use it.Full ownership : both !
18 mars 2010 CERN : Présentation Prisme Conseils. 9
French inheritance – what is part of the estate in this case?
The assets :The real estates,The liquid assets,The investments (not investment policies
insurance)The liabilities :
The debts The anterior gifts
18 mars 2010 CERN : Présentation Prisme Conseils. 10
French inheritance :what is part of the estate ?
Our example : Real estate 500 K / 2 = 250Savings 300 K / 2 = 150
Total : 400 K
18 mars 2010 CERN : Présentation Prisme Conseils. 11
French inheritance : Share of heirs
Remember example : one spouse, two children.
Without will With will
Option 1 Option 2 Between And
Spouse 100 %
USUFRUCT
25 % FO 0 75 % Usuf. +
25 % FO
Each child
50 % Bare Ownership.
37,5% FO 50 % FO 37,5 %
Bare Ownership
18 mars 2010 CERN : Présentation Prisme Conseils. 12
French inheritance : Tax return
Inheritance taxes depend on the part of each heir,
6 months to pay taxes after death’s month.
18 mars 2010 CERN : Présentation Prisme Conseils. 13
French inheritance : the share of the estate
take into account the wishes of each heirPossible compensations, rewards.Can take a long time, even few years
depending on the agreement between heirs
18 mars 2010 CERN : Présentation Prisme Conseils. 14
Inheritance
French inheritanceInternational inheritanceIdentification of the Marriage SettlementCase studies :
DivorceCohabitation
Our advice
18 mars 2010 CERN : Présentation Prisme Conseils. 15
International inheritance
Situations linked to international inheritance
Principles
18 mars 2010 CERN : Présentation Prisme Conseils. 16
International inheritance : definition
An inheritance is international when : There are estates in more than one country,ORDeceased and at least one heir do not live
in the same country.
18 mars 2010 CERN : Présentation Prisme Conseils. 17
International inheritance : principles
The same as for France,2 steps : Civil and fiscal (aspects)
Legal topics : Who are the potential heirs ?What is part of the estate in case of inheritance?
Fiscal topics : How much is the inheritance tax ?
18 mars 2010 CERN : Présentation Prisme Conseils. 18
Inheritance
French inheritanceInternational inheritanceIdentification of the Marriage SettlementCase studies :
DivorceCohabitation
Our advice
18 mars 2010 CERN : Présentation Prisme Conseils. 19
Which marriage settlement
Is there a prenuptial agreement ? Otherwise, one has to refer to « The Convention of La
Haye » : Wedding location First location of the newly weds
Example : France : Community of all wealth created since
wedding inception UK : Existence of 2 distinct estates Switzerland : 2 distinct estates with an indemnity
process in case of termination.
18 mars 2010 CERN : Présentation Prisme Conseils. 20
International inheritance : tax
Existence or not of a bilateral tax agreement between the 2 countries.
Generally speaking : Real estate : in the country where it is located, Non real estate is taxed in the country of the
deceased person
Rates : Variable depending on the countries and the
relationships with the heirs
18 mars 2010 CERN : Présentation Prisme Conseils. 21
Inheritance
French inheritanceInternational inheritanceIdentification of the Marriage SettlementCase studies :
DivorceCohabitation
Our advice
18 mars 2010 CERN : Présentation Prisme Conseils. 22
Case of divorce
The situation will depend upon the existence of prenuptial agreement and upon the marriage settlement
What is the origin of the assets ?
18 mars 2010 CERN : Présentation Prisme Conseils. 23
Case of cohabitation
Civil partnership (or similar) It depends on the country, and the way
they consider the partnership.Persons in cohabitation :
Generally speaking : Not concerned by the inheritance,Max inheritance tax if there is a will !
18 mars 2010 CERN : Présentation Prisme Conseils. 24
practical advices
Organize your inheritance before you die (share, will…)
For the will : write it alone, or with the help of a notary.
Organize proxies before you have need it, Protect your spouse with an investment policy
insurance or life insurance. And if you need advices…
18 mars 2010 CERN : Présentation Prisme Conseils. 25
Our advice
Wishfull thinking is not a legal right !Think, And be proactive !
18 mars 2010 CERN : Présentation Prisme Conseils. 26
Questions ?
18 mars 2010 CERN : Présentation Prisme Conseils. 27
Plan
InheritancesQuestionsWealth management (estate
development)Questions & answers
18 mars 2010 CERN : Présentation Prisme Conseils. 28
Wealth management
Estate planningRealistic objectivesPossible keysConclusion
18 mars 2010 CERN : Présentation Prisme Conseils. 29
Estate planning
Establish desired objectivesAnalyse the current situationWealth management proposedImplementation
18 mars 2010 CERN : Présentation Prisme Conseils. 30
Desired objectives / 1
Create additional revenuesNowLater (post retirement)
Dispose of savings :Graving safely,With additional risk
Develop your wealthOptimize taxes (rent, wealth tax…)
18 mars 2010 CERN : Présentation Prisme Conseils. 31
Desired objectives / 2
SCI : Spousal protection, Then children. Can have a tax advantage in international asset More binding
The investment policy insurance Very advantageous, Especially before 70 years old Can protect a partner or the person of his choice
18 mars 2010 CERN : Présentation Prisme Conseils. 32
Possible keys
Conceivable keys
Imm
ediate revenues
Futures revenues
Savings
Wealth
Less taxes
Protect the spouse
Real estate :
Acquisition of the main residence
Real estate :
Investment in rental property
Investments :
Insurance life products
Financial assets
Beneficed tax exemption regime
18 mars 2010 CERN : Présentation Prisme Conseils. 33
Conclusion
Enjoy your life !Each case is different,Better act than take the burden…
18 mars 2010 CERN : Présentation Prisme Conseils. 34
Questions ?
We remain available after the presentation,
Thank you for your attention.
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