As per family business advisors, Wealth planning refers to the whole process of structuring, preserving your wealth while building it and then safely transferring it to the next generation as tax-efficiently as possible. It is an integral part of an individual’s life and is an essential step to safeguarding your legacy. Wealth planning is a combination of tax planning, wealth protection, estate planning and business succession planning.
It relates to an individual’s overall worldwide wealth. A proper family office is a must in these cases to plan your wealth and safeguard it. It will provide excellent wealth planning services that will be most suitable for your situation.
Substantial Wealth is Always Under Threat
Circumstances are constantly changing especially for families with more wealth and assets. These families continuously go through instances of international relocation, divorces marriages and divisions in the business. So as more family members are added to the family, the preservation and management of the family’s wealth come into question. Every individual has different opinions and views on this. It generates constants threat to wealth as well as privacy concerns. So it is essential to implement proper regulation-compliant wealth planning services to neutralise most of these threats. Hence this is one of the core services provided by any family office. It is crucial to hire an experienced family business advisors or set up your own family office for these services.
Three Generations and Your Wealth has Vanished
In most cases, only one generation is the main contributor to the family’s wealth. If not planned properly, this wealth will vanish over the next two generations. When the wealth is transferred to the next generation, because of entailment, it is divided among several individuals. It automatically results in fewer assets per person. On top of that, various taxes such as wealth tax, estate tax, inheritance tax and income tax are levied. And they take a significant portion out of the wealth. Family business advisors can minimise these challenges and safeguard your assets for the forthcoming generations.
Potential Threats to Your Wealth
In addition to all the challenges mentioned above, there are other threats to an individual’s wealth as well. Some of these include freezing of assets on an individual’s death. Matrimonial disputes, disputes over the devolution of the estate, etc. apart from the obvious financial reasons, there are many non-financial reasons to implement wealth planning as well. These include avoiding disputes over the control of the family business, preventing an invasion of privacy, protecting the family’s reputation and ensuring the family’s safety. These issues should be dealt with soon and managed adequately. But Indian families and family businesses often ignore them until it is too late.
Wealth Planning Services
Wealth planning involves building and structuring wealth while preserving it for the next generation. It includes tax planning, wealth protection, estate planning and business succession planning and relates to the total wealth. Wealth is always under threat. So wealth planning schemes and services are becoming more and more critical every day. The services provided by us in this regard include:
- Structuring of assets as well as investments to aid tax planning.
- We are providing advice on ownership, management and distribution of assets.
- We are ensuring privacy and wealth protection structures
Taxes / International Tax Planning Services
Our tax planning services include:
- Planning a double tax treaty for family-owned companies and real estate.
- We are providing local as well as international tax advice to the clients.
- Providing advice and support regarding fiscal company migration.
- We oversee the preparation of tax returns.
Wealth Planning Structures
The average wealth planning structure consists of the following:
- An international business company to act as a foreign holding company for the family business.
- A trust to safe keep and transfer assets to the next generation
- A foundation to be active in philanthropy
- Life insurance solutions to set aside wealth for specific family members.
- A professional investor fund to invest in a controlled and optimised manner.
- Wills and prenuptial agreements to safeguard assets from the family by marriage
Bespoke Wealth Planning
Usually, a family office will only implement these structures together as part of a holistic planning process rather than individually. Some of these structures are more suitable for wealth creation, while others are more inclined towards intergenerational wealth transfer. Many times, these structures are implemented without prior consultation of experts such as tax lawyers. It might cause issues now. Undeclared assets will bring in significant problems and unwanted situations. Therefore it is crucial to structure the asset in a tax- and regulation-compliant way.
