How to #PersonalFinance Mario Di Stefano, lawyer and managing partner at the law firm DSM
the outcome to chance. If not addressed, the assets of the deceased will be administered under common law. You may have some objectives upon your death, such as maintaining control over a company instead of its break-up by favouring some heirs. The structuring could also account for intra-family relationships and/or the expertise of some heirs in managing the company. The wills are key elements of the structuring of the estate, which is itself also fundamental. The marriage contract is also a crucial constituent in the planning. What are important goals for an estate plan? It depends on many factors, such as the family situation and the philosophy of the people wishing to structure their estate. It is often reported in the press that some wealthy families decided to pass over a considerable part of their estate to charitable organisations instead of their heirs whereas others elect to preserve the value of the estate or the going concern of a company.
Is a notary or lawyer best placed to prepare estate planning in Luxembourg? Both roles are complementary. The notary is a public official that writes acts. Contrary to the lawyer, the notary is not the representative of one party and must advise all parties in a neutral fashion. The lawyer can’t advise the other party. The notary will 102
administer the succession, while the lawyer may be involved upstream in estate planning, such as structuring the estate and tax matters. What exactly is an estate plan, and do I really need one? It is not absolutely necessary and can leave
Should one choose an estate trustee? It is not mandatory. Should there be no trustee or will, the notary will administer the estate. If you want to designate someone, it should be a trusted person, lawyer or notary, someone familiar with the law and the wishes of the deceased. The goal is also to avoid conflicts between heirs.
Andrés Lejona
Mario Di Stefano at DSM Avocats à la Cour provided high-level guidance on the roles of the lawyer and the notary and suggested that it is not a good idea to leave estate planning to chance. Not making an estate plan nor writing a will may have unintended tax consequences and even result in conflicts between heirs.
I already have a will in my home country. Is that enough? It depends on the applicable law of that country. Is it compatible with Luxembourg law? In some cases, there may be “law conflicts.” A European regulation harmonises these matters for European countries. When residing in Luxembourg, it may be sensible rewrite the will and have it signed off by a Luxembourg notary. The will then supersedes all prior wills. Avoid having too many active wills and be clear about the last valid one.
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A well-designed estate plan is vindicated afterward
What makes up a well-designed estate plan? We always see that in hindsight. First, one must set objectives. You may not achieve all your objectives as the estate planning may sometimes clash with tax issues. One should therefore set priorities and expect to make compromises. Second, one should collect information about the estate and the persons involved and anticipate how their status may evolve. Depending on the residency of the heirs, the administration of the estate and the tax impact may vary greatly.
EXPAT GUIDE 2024-25
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04/07/2024 15:26