How to plan your succession and protect your assets?

What is succession planning?

In short, it is a set of strategies and measures that aim to guarantee the continuity and efficient management of an asset or company after the death or incapacity of the owner or leader.

How important is this tool to protect your assets?

This tool is essential for protecting heritage, ensuring that it is preserved and passed on to future generations in a safe and organized manner.

When there is no adequate planning, succession can certainly become a turbulent and exhausting process for the family, which can result in conflicts, disagreements and even the loss of part of the assets.

However, the succession planning allows assets to be transferred to heirs in a clear and fair manner, thus avoiding possible disputes and litigation between family members.

Furthermore, asset management is kept under control, ensuring business and investment continuity and, consequently, the preservation of assets.

This tool also allows the adoption of fiscal and tax measures to reduce the impact of the transfer of assets, reducing the possibilities of losing assets in taxes.

In short, it is essential to guarantee the security and protection of assets, in addition to promoting a smooth and harmonious transition between generations.

How to do succession planning?

To make a succession planning efficient and protect your assets, it is necessary to follow some important steps.

These steps involve some of the most important and indispensable points of this tool. See below.

1. Identify the goods and assets to be protected

It is important to make a list of all assets, properties and investments that need to be protected.

That is, real estate, bills banking, shares, companies, among others.

2. Define the objectives and criteria for succession

Another important step in this process is to define who the heirs or successors are, what the rights and responsibilities of each are, and how the assets will be divided.

In addition, criteria must be established for the sale or transfer of assets, if necessary.

3. Create a will

A will is a legal way to ensure that the owner's wishes are respected and that the assets are distributed according to their instructions.

It is certainly essential to have the services of a lawyer specializing in succession to prepare an appropriate will.

4. Structuring a family business

If the company is one of the main sources of wealth, it is important to structure it to ensure business continuity in the event of the founder's death.

To do this, you can create a tax planning, build a heritage linked to the company, among other initiatives.

5. Create life insurance

Life insurance is a useful tool to protect the family in the event of the death of the breadwinner.

It can be a good option to ensure the continuity of the company's activities and pay debts or other financial commitments.

6. Inventory

Probate is a legal process that occurs after a person's death and involves the identification, assessment, and distribution of the property and assets left behind by the deceased.

It is an important step in succession planning, which is the process of organizing and transferring a person's property and assets to his or her designated heirs or beneficiaries.

Several reasons make inventory essential in this planning:

✅Proper distribution of assets:

Probate is necessary to identify and distribute the deceased's assets and property in accordance with his or her wishes as expressed in a valid will or in accordance with the laws of succession.

This helps to avoid disputes between heirs and ensures that assets are distributed fairly and legally.

✅Compliance with legal obligations:

Probate is a legal requirement in many countries and jurisdictions, and failure to comply can result in debts and delays in the process of transferring assets to heirs.

It allows the deceased's estate to be considered audited, any taxes due to be calculated and paid, and all legal obligations to be met.

✅Identification of debts and liabilities:

This document also helps identify any debts and liabilities left by the deceased, including credits, outstanding bills and tax obligations.

In this way, these debts are settled from the deceased's estate before distribution to the heirs, avoiding future problems.

✅Tax planning:

When preparing the inventory, it is possible to identify the tax burdens arising from the succession process, including taxes on inheritance, donations and capital gains.

This allows heirs to plan the management and transfer of the deceased's assets in accordance with current tax laws, seeking to optimize the tax burden.

✅Protection against disputes:

A well-documented inventory can help protect the estate process from future challenges and lawsuits.

It provides a clear record of the deceased's assets and property, their estimates, debts and distribution, which can help mitigate potential disputes between heirs.

In short, inventory is a crucial step in succession planning, by allowing an adequate distribution of assets, compliance with legal obligations, identification of debts and liabilities, tax planning and protection against disputes.

7. Make donations during your lifetime

Donating part of your assets while you are still alive can be a good alternative to reducing your tax burden and ensuring that your assets reach your heirs more efficiently.

This initiative is part of the transfer of assets in succession planning, see more details in the next topic.

How to transfer assets in estate planning?

This tool is a legal strategy used to transfer assets or properties to heirs or beneficiaries efficiently and in accordance with applicable laws.

The transfer of assets can be done through different buttons, such as donations or usufruct.

Here is some basic information on how to make transfers of assets such as donations or usufruct in succession planning:

Donations

A donation is the intentional transfer of an asset or property from one person (donor) to another (donee) without the need for payment in return.

In estate planning, a donation can be used to transfer assets to heirs or beneficiaries while still alive, thus preserving the value of the estate subject to inventory and possible payment of inheritance taxes.

It is important to note that donations are subject to specific rules, such as the need to be made by public deed or by private instrument with a recognized signature, depending on local legislation.

Additionally, donations may be subject to donation taxes, which vary depending on the jurisdiction and the value of the donated asset.

Therefore, it is recommended that you consult a specialized lawyer or accountant to understand the tax and legal recommendations for donations in your location.

Usufruct

Usufruct is the right to enjoy an asset or property, even if possession belongs to another person.

In the context of succession planning, the donor can transfer the usufruct of an asset to a beneficiary (usufructuary), while maintaining ownership of the asset.

This allows the donor to continue to enjoy the asset during his lifetime, while the beneficiary of the usufruct has the right to use it and obtain the benefits from it.

Usufruct can be an interesting strategy for transferring real estate, for example, while the donor maintains control and benefits of these assets during his or her lifetime.

It is important to keep in mind that usufruct is also subject to specific rules and may have tax security.

Therefore, it is advisable to obtain legal and accounting advice to ensure that the succession planning be done in accordance with the legislation in force in your jurisdiction.

In short, donations and usufruct are the returns that can be used in succession planning to transfer assets or properties to heirs or beneficiaries efficiently.

However, it is essential to understand the applicable local legislation, tax instructions and specific rules before carrying out any transfer of assets.

In this case, it is recommended to seek qualified professional guidance to ensure that succession planning is carried out properly and legally.

How much does it cost succession planning?

The cost of a succession planning can vary widely depending on a number of factors including, for example,

complexity of assets and family structure;
geographic location;
fees of the professional involved;
extent of services provided and other relevant factors.

This process typically involves consulting an estate attorney or financial planner who can help create strategies for transferring assets and property to heirs and beneficiaries, thereby minimizing taxes and protecting family wealth.

Therefore, it is important to consult this professional to obtain an accurate estimate of the costs involved based on your personal situation and specific needs.

Remember to clearly discuss fees and services included before hiring a professional to ensure you fully understand the costs involved.

Conclusion

As we can see, the succession planning It is a tool that serves to protect and preserve assets, in addition to guaranteeing other advantages, such as:

Reduction of family conflicts;
Business continuity and protection of heirs;
Minimization of tax burdens;
Compliance with the wishes and interests of the asset owner;
Efficiency and agility in the succession process.

It is worth highlighting that this tool must be developed with the help of a professional in the field, to guarantee its efficiency.

By: Nara updated ago 2 years back