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Estate and Succession Planning

Trust, Estate and Family - 17 Feb 2016

When considering succession planning, there are many variables that may mean the best tax answer may not always be the best answer to achieve the wishes of the individual and wider family.  Such planning must include an understanding of current assets, future plans and the status of your beneficiaries.

There are many unknowns when considering succession planning that means where possible tax planning undertaken today can offer some flexibility tomorrow.

One of the greatest uncertainties is what further changes may occur to tax legislation in the US, UK and beyond.  We can’t predict the future but we can help you plan.  When dealing with cross-border issues, a position that works in multi-jurisdictions rarely happens by accident.  And whilst a subject that is not always comfortable to focus on, this can provide peace of mind that your wishes will be carried out.

Although tax is one of many considerations it is an essential part of wider planning. It is also a very personal matter and in many cases consideration is given to the tax planning for the estate in isolation. However, when dealing with cross-border matters it is important to consider the tax situation of your beneficiaries as planning which was appropriate for your needs at the time it was put in place, may potentially create personal tax problems for beneficiaries in future which could be avoided.

For example, trust planning is commonplace in both US and UK estate planning. However, there are significant US Federal income tax issues in respect of US persons receiving benefit from a foreign trust. The same is apparent for a UK resident settlor or beneficiary of a US trust structure.

It is important that the beneficiary is aware of what they are receiving as there are very distinct differences between an inheritance and a distribution from a trust.  This can then lead to unexpected tax liabilities and after taxes are paid, the value of the benefit received may well be significantly less than originally hoped for.  Estate planning can also implement your wishes beyond the next generation, as well as providing asset protection in contemplation of such issues as divorce or dependency.

Frank Hirth are able to provide US and UK tax advice that considers your wider plans and is coordinated efficiently with other factors within your own world and for the beneficiaries.

In many cases, an often overlooked step is putting appropriate wills place. These can be an important part of tax planning and in order to implement your wishes, but are also essential for many other issues including guardianship of children.  Wills should also be reviewed and updated regularly to take into account any change in circumstances and future plans. If a Will is not updated or revoked to reflect these changes, it remains in force which could certainly create problems.

Please note that whilst we can provide tax planning advice we are unable to prepare wills but can certainly provide details of appropriate lawyers to assist in ensuring your estate plan is fully in line with your wishes. 

To discuss further, please contact our Trust & Estates Team:

Iain Younger                     David Foster                     

Private Client                   Private Client                     
Tax Director                     Tax Director                      

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Iain Younger

Iain Younger


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