The estate is everything an individual or corporation possesses before it is distributed to the beneficiaries.


In the succession process, a specific part of the estate is transferred to heirs or beneficiaries.

But, what is included in the estate? The estate is everything an individual or corporation possesses before it is distributed to the beneficiaries. An estate includes bank accounts, stock, real estate, jewelry, life insurance, investments, and other assets. Debts, any tax burden and pending liabilities are also part of a person's estate.

Upon death of its owner, an estate is distributed among the beneficiaries or heirs, based on specific instructions left in a will or a letter of wishes in a trust fund.

If a will or trust are not set up, succession and distribution of assets will be determined based on legal provisions, which might not necessarily be aligned with the wishes of the owner of the estate. In addition, if the owner of the estate does not have an effective estate planning tool, there might be significant tax consequences.

Goals of Succession Planning

Succession Planning has the ultimate goal of safeguarding wealth for the future. In other words, to protect the greatest amount of wealth possible, which ultimately will be transferred to the beneficiaries. To that end, succession planning takes into consideration variables such as unexpected events, incapacity, taxes, and lawsuits, which might affect the estate's size and succession process.

Having an efficient succession plan can also lessen the financial burdens of property transfer costs ­– attorneys' fees, debts, payment of taxes upon death, and delays caused by legal processes. An orderly succession aims at reducing these costs and delays, as well as simplifying and ensuring the estate transfer.

STL's life insurance policies are an important aspect of succession planning, because they enable beneficiaries to have immediate access to cash to pay taxes, funeral expenses and any other short-term debts, such as legal expenses, among other.

A trust fund can also serve as the beneficiary for life insurance policies or retirement plans. In this case, the trust will be executed based on specific instructions contained within it. This way, the policy and/or plan becomes part of the estate.

Our experience in life insurance enables us to provide our customers with confidential, private consultations on how to use this life insurance in succession planning.

A successful succession plan should meet the following criteria:

Includes Avoids Foresees
Disability Delays in transfer of estate Estate distribution plan including a few generations
Accidental Death Public court litigations Liquidity for short-term expenses
Legal battles

A trust fund is the most effective, flexible method in the inheritance planning process, because death of the trustor has no effect on the estate. Assets continue to be under the control and management of the trustee, according to the trust terms and conditions, which may include estate planning spanning over many generations. Children and grandchildren are protected, while the succession process is simplified and optimized. Given its structure and nature, a trust fund offers a series of advantages over a will.
The following table shows these advantages.

Includes Trust Will
Legal Figure A legal structure A legal document
Asset Transfer Upon establishment Upon death
Asset Ownership Trust Beneficiaries
Flexibility Level High Low
Administrative Costs Medium Low
Tax Liability Low High