Estate planning is a tool used to reduce the impact of a possible tax burden on assets, such as, for example, any inheritance tax levied when the policyholder dies.
Tax planning begins with an investigation of the client's financial situation. This helps design a structure that adjusts to their individual needs, meets all legal requirements, and protects the estate, through tax exemptions or deferred taxes.
Several countries in Latin America, Europe and Asia have tax transparency laws that regulate the disclosure asset ownership abroad and require payment of taxes on income earned abroad.
StateTrust Life & Annuities together with tax experts will design the ideal structure to help customers reach their financial goals in harmony, while meeting applicable tax requirements in their country.
These structures are established in jurisdictions that offer political stability, efficient administrative processes, a solid legal system, and reasonable costs; and may take the form of:
- A Trust Fund
- A company with personal assets
- A private foundation
Some of the taxes that must be taken into account when conducting estate planning include:
- Estate Taxes: Taxes applied to the estate, which are applied upon transfer of the inheritance at the time of death of the asset holder. The amount of tax is determined based on the price a buyer would pay for assets included in the succession process.
- Inheritance Taxes: This is a tax levied on a portion of the estate left to each beneficiary.
- Transfer Taxes: All property transfers, whether as gifts or at the time of death of the asset holder, or while the owner is still alive, are subject to this type of tax.
Each jurisdiction and country have unique taxation structures regulating the entire succession process, including other types of taxes that may be levied in addition to or in lieu of the aforementioned types.