Substantial wealth is always under threat
In the ever-changing financial environment, wealth planning plays a vital role in preserving and transferring wealth to the coming generations in an orderly and well controlled manner.
The wealth you have accumulated open doors and create possibilities for you and your family, your business and the causes you support.
Wealth also attracts interest from governments and authorities, the media and the general public. With careful planning, unwanted attention and the problems that might arise from such attention, can be avoided or kept to a minimum.
Three generations and your wealth has vanished
Wealth is often generated by only one generation. Research shows that without planning that wealth properly, it on average completely disappears over the next three generations. Taxes such as wealth tax, estate and inheritance tax and income tax can for example take quite a big bite out of your family’s wealth. But there are also regulatory and legal challenges and in certain countries increased political, religious and economic risks and instability to be taken into account.
Potential threats to your wealth
Other potential threats to your family’s wealth are e.g. assets being frozen on death, matrimonial disputes or disputes over the devolution of your estate. Non-financial reasons to implement wealth planning solutions are e.g. disputes over the control of the family business. Protection from creditors must also be taken into account. The list of possible future creditors includes your own creditors and the future or present creditors of your companies, fellow shareholders, family members and beneficiaries.
A solution aiming for transparency and compliance is the sound approach given the aggressive approach of tax authorities and the wind of transparency sweeping over the developed world.
Outdated wealth structures such as holding companies, trusts and foundation no longer serve any purpose and may instead expose and put your wealth at risk.
Opting for an insurance based wealth structure is in our experience the best, and possibly the only way, to achieve this. By choosing a Private Placement Life Insurance (PPLI) policy as part of your wealth structure, you obtain the following benefits:
- Portability – No need for pre-migration tax planning and restructuring if you move to another country. The PPLI will work in most countries in the world.
- Confidentiality – Only a few parties have knowledge of your wealth and what investments you make.
The insurance company appear as the investor.
- Optimised taxation – All gains and other income is tax free for the PPLI. Withdrawals and payments to beneficiaries are tax free or have preferential tax treatment in most countries.
- Wealth protection – Your wealth is safe from creditors and fraudsters etc. and cannot be seized by creditors.
- Estate planning – The most advanced and flexible estate planning tool available
- Stability – Insurance laws rarely changes
- Transparency – PPLI is a legal and complaint wealth planning tool available in most countries in the world.