We recognize the importance of ensuring the wealth of clients is preserved and seamlessly passed on to their loved ones. Often, Estate Planning is considered a requirement for individuals with complicated asset holdings. It has been observed, however, that complications can occur irrespective of the quantum of the wealth.
Lack of know-how and failing to plan inheritance may lead to troublesome transmission of wealth to the families of clients. Further, with families going global it is imperative to devise a plan that takes into consideration international laws and its nuances to avoid any adverse ramifications for clients’ interests.
Families are keenly considering options to diversify their assets internationally given the fact that their loved ones are spread across the globe. Investment into ‘second homes’ or as a logical step towards business expansion plans through citizenship and residency programs have become increasingly popular. However, one needs to carefully conduct a thorough due diligence of such options by evaluating various factors such as cross-border laws, taxes, etc. to make an educated investment.
The Estate and Immigration Planning Series aims to provide clients with insights on various aspects of estate and immigration planning to enable them to take a well-informed decision for a secured future for their families. After all, passing on wealth in a considered manner is a critical step to build safeguards to ensure legacies continues to benefit your next generation.
While you focus on creating your wealth, let us help you plan for preservation, protection and seamless succession of your wealth.
What is Estate Planning?
A proactive plan to meet your specific objectives revolving around asset conservation and transfer of your wealth.
Why do you need an Estate Plan?
1. To ensure your wealth is distributed according to your wishes.
2. Reducing procedural legal delays in accessing, distributing and using wealth by your loved ones.
3. Consolidation and preservation of your assets in a suitable structure, especially for future generations.
Estate Planning is a very crucial step to ensure seamless and hassle-free distribution of your wealth to your loved ones. Contrary to the common myths of estate planning that makes one postpone such decisions, it should be considered as soon as you have an asset and an intention to pass it to a beneficiary as desired by you.
Wealth Planning Services at Sanctum
Our Wealth Planning Services enable you to preserve and distribute your wealth to your loved ones and for purposes you choose, in the most efficient way, both during your lifetime and beyond.
A good Estate Plan is designed to bring reality in line with your wishes to the maximum possible extent.
MYTH: Estate Planning is only for people of a certain age.
TRUTH: Individuals in their 20s and 30s also may find estate planning useful. Unfortunately, we cannot predict our last day, hence it is better to plan today.
MYTH: Estate Planning is only meant for people with complex assets and families.
TRUTH: Every asset matters! Even if you feel your assets are not worth a lot or are fairly simple, having an estate plan can help determine who in your family gets what and more so as per your wishes.
MYTH: My family members have very good relations, we do not need a formal plan.
TRUTH: When relations are good, it provides the best opportunity to plan. Without a plan, intestate succession laws will prevail whereby assets will be distributed as per law in a predefined manner to your family, that may lead to complicated ownership of assets & possibility of family friction.
What is Will?
It is a legally binding document that lets you determine how would you like your estate to be handled after your lifetime.
Absence of a will
• Your wealth will be distributed as per intestate succession laws and not as per your Wishes.
• Complicated ownership of assets.
• Possibility of family disputes leading to deterioration of relationships.
Some common terms used in will planning
• Testator/Testatrix- A male/female who has made a will
• Executor/Executrix– An individual appointed to carry out the wishes as stated in the will of the deceased
• Legatee/Beneficiary- A person who inherits under a will
• Codicil– An addendum to your original will to include modifications/additions.
• Probate– Judicial process to confirm if the will is valid and authentic post demise of the testator/testatrix
Will planning is arguably one of the most important things you can do for yourself and your family. Absence of a will can lead to transmission loss of your wealth, chaos and confusion for your family while a well drafted will can lead to the following benefits:
1. Distribution as per your wishes
It can legally protect the interest of your family in your estate.
2. Make life of your loved ones easier
Avoid delay and lengthy processes to ensure seamless transmission of your wealth to your loved ones.
3. Provide for financial needs of your loved ones
Through your will, you can provide for members who are financially dependent on you.
4. Ensure your children are cared for
If your children are minors, you can decide who will raise and take care of them as guardians.
5. Appoint your Executor(s)
You can decide who will wind up the affairs of your estate and carry out the wishes as stated in your will.
6. Mitigate legal challenges
A well planned will has the potential to avoid costly and lengthy legal battles.
7. Avoid transmission loss
Will Planning ensures that there is no loss of wealth during transmission to your loved ones, especially due to lack of knowledge.
8. Take care of your pets
A will lets you plan as to who should take care of your pets.
9. Provision for charity
You can make bequests to charitable causes that you believe in.
10. Contingency planning
Make provision if the primary beneficiaries are absent, then who should inherit your wealth.
When drafting your will make sure you just don’t limit it to an exercise of putting pen to paper but adopt a holistic approach to will-planning to ensure your wishes see the light of the day.
Before you begin drafting your will, please ponder on the below questions:
Will Planning at Sanctum
It is essential to have a 360°approach to will-planning to ensure seamless succession of your assets to your loved ones.
Top Reasons for a ‘Second Home’
Citizenship-by- Investment (CBI)
It can confer on you the same rights as ordinary citizens whereby you are provided with the right to vote, usually the ability to pass the citizenship to future generations and international visa-free travel, subject to the passport strength.
Residence-by- Investment (RBI)
It provides you the right to live, work, travel and study in a particular country. These programs usually come with certain conditions or requirements that you need to meet to qualify for the program.
Whether you choose your second home address in the European landscapes of Portugal or the picturesque countryside in the United Kingdom, it is important to choose the right advisor who can facilitate comprehensive advice from pre-migration to post-migration!
One of Europe’s historically influential countries, Portugal, offers you the opportunity to have a ‘second home’ with a high quality of life, fantastic local cuisine, rich culture and mild climate.
The Portugal Golden Visa programme offers you residency in exchange for investment in sectors as designated by the Portuguese government.
The most popular investment option is purchase of real estate in Portugal where the investment ranges from €280,000 – €500,000 with a lock-in period of six years.
Some benefits of the Golden Visa Programme:
Investment migration emerged as an important consideration for affluent families in the wake of the pandemic. Initially, the primary motivations for relocation centered around access to superior healthcare facilities and an improved quality of life. However, the emphasis then shifted towards securing quality education and ensuring a stable life for children in foreign countries. Recent government data reveals that in 2022, more than 770,000 Indian students embarked on international study journeys, marking the highest figure in six years. Presently, parents are actively seeking investment visas to provide enhanced opportunities for their children, surpassing the traditional student visa route.
While families are exploring various sought-after destinations such as the United Kingdom, United States, Canada, Portugal, Singapore, and Dubai, the favored choices appear to be the United States and Portugal. Both the US EB-5 program and the Portugal Golden Visa program have undergone significant transformations throughout the years. In this context, we provide the most recent updates on these programs.
Portugal Golden Visa
After the housing crisis discussions held on 16 February 2023 in Portugal, the Portuguese Parliament received the initial draft of a law aiming to make changes to the Golden Visa Program on 14 April 2023. The draft encompasses the following key points:
The EB-5 program has become a favored choice among students aspiring to pursue higher education and build a life in the United States. Despite the increase in investment limits from USD 500,000 to USD 800,000, the popularity of the EB-5 program persists. Moreover, with the program’s re-authorization in March 2022, the introduction of the Concurrent Adjustment of Status (AOS) rule enhances its appeal even further.
Under the previous regulations, applicants for the EB-5 program had to wait for their application to be approved before applying for a work permit. However, the introduction of the new concurrent Adjustment of Status (AOS) rule now allows investors based in the United States to commence working while their green card application is still in progress. Once the AOS is submitted, applicants can anticipate receiving their work permit within approximately 3-5 months and their travel permit within 10-12 months. This significant reduction in permit-wait-times from 2-3 years in the past to just a few months is remarkable. Moreover, this eliminates the need for these individuals to depend on the H1-B lottery system or maintain alternative visas while awaiting their green cards.
This development proves particularly beneficial for students already residing in or planning to move to the United States, as well as for working professionals holding H1-B visas in the country.
It is key to recognize that migration decisions have long-term implications, including their impact on taxation. Therefore, it is essential to evaluate your background and objectives to assess the suitability of the program. Furthermore, the aforementioned changes necessitate individual case evaluations, and it is vital that you fully comprehend the program, its processes, and its requirements before making ‘the move!’