Wealth preservation

Holistic strategic financial planning, tax, estate, pensions & investment.

Providing control and certainty in Legacy Planning

As we get older we tend to think more about our legacy, and how it will pass to our loved ones. No matter your age or health, you should have a will in place that specifies who will receive your assets on your death.

enjoy a comfortable retirement and not have to worry about medical costs in later life.

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However, good estate planning is about much more than just having a valid will. Expatriates have to consider the tax and succession rules of two or more countries and many people have complex family structures to cater for.

Gifting with control

There are many situations where you would want to retain some control over your legacy after death:

• Perhaps you want to leave money to your children but worry how they will handle it at this stage in their life. You may have concerns about whether their marriage will last and where your gift could end up. You might prefer to leave a flexible income rather than a lump sum so it cannot be spent all at once.

When it comes to grandchildren, you might want them to receive your gift when they reach a more financially mature age or earmark it for a particular purpose like university fees. You may like them to have access to a certain amount of capital while studying, say, and receive the rest when they look to buy their first property.

Whatever the reasons for wanting control and certainty, you need careful planning with tailor-made solutions for your goals and family circumstances.

Tax considerations

Traditionally, gifting with control often involved the use of a trust structure. While this approach can still offer advantages, the tax-efficient benefits in Portugal have diminished in recent years.

There are alternative ways of structuring your capital that enable you to meet your estate planning objectives whilst providing tax benefits for both your heirs and yourself. Ideally, you would receive tax-efficient income and investment growth throughout retirement, combined with certainty of succession without the need for probate.

Remember that you could remain UK-domiciled and liable for 40% UK inheritance taxes on your worldwide assets. While the Portuguese equivalent will not apply to your spouse or descendants, other heirs could be liable for 10% stamp duty on Portuguese assets.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

Sharon Farrell, Blevins Franks Partner

T+351 289 350 150

E Sharon.farrell@blevinsfranks.com

W blevinsfranks.com

In cases where marriages have broken up or estranged family members have legal guardianship of your heirs, you may want to protect their inheritance and defer access until they can inherit as adults at 18.

• Maybe you would like to delay an inheritance further, to ensure an heir can

Portuguese residents are also affected by ‘forced heirship’. This automatically allocates a fixed proportion of your worldwide estate (excluding non-Portuguese real estate) to your spouse and direct family on death.

Legacy planning

Inheritance planning is a specialist area and each family is different, so take professional advice to ensure the right money passes to the right hands at the right time, while minimising taxes during your lifetime and beyond.