Inheritance Law and Estate planning
In the event of death of your partner/spouse, parent, or another (family member) to whom you are related, you may have to deal with the law of succession and the Inheritance Tax Act (inheritance tax).
A civil-law notary will in many cases play an important role in the settlement of an estate. When settling an estate, a difference of opinion may arise between the parties/persons involved about the manner in which the settlement of the estate should be handled or about the manner in which the estate should be divided (who is entitled to what). To safeguard your interests in the best way possible, it may be advisable to have your interests represented by a lawyer, even if no legal proceedings are brought
Matters which may give rise to discussion and disputes when an estate is settled are:
- The manner in which you are willing to accept the estate or otherwise
- The role and powers and duties of an executor and administrator
- The question of whether a last will and testament can be challenged
- The size of the estate and the manner in which the estate is divided
- Claiming and determining the statutory share
- The position of the surviving partner
In addition, an inheritance tax return must be filed on the inheritance from the estate (in principle within eight months after the death of the testator). The manner in which an estate is settled can have an impact on the amount of the inheritance tax payable. When filing the inheritance tax return, tax valuation issues may arise. And in the event that foreign assets are involved which form part of the estate or if there are beneficiaries residing abroad, specific issues will arise in relation to which country is entitled to impose inheritance tax on the estate and the possibilities of avoiding double taxation.
If the testator is an entrepreneur, or a shareholder or co-shareholder in a company, specific issues concerning valuation and the possibilities of using business succession facilities are often a factor regarding income tax as well as inheritance tax.
On the death of the deceased (testator), his/her property will pass to his/her beneficiaries. If the testator is married, the size of his/her estate will initially be determined by matrimonial property law.
By making your will and a prenuptial agreement in advance, you are able – to a large extent – to structure the manner in which passing of that property will take place. Various aspects and considerations are contributory factors to the manner in which the structure is established.
In addition, the key focus area is often the position of the surviving partner (spouse) with respect to the surviving partner’s or spouse’s children, whether or not they are his/her own children.
The manner in which a will and a prenuptial agreement are structured may lead to significant differences in inheritance tax payable, whereby the tax payable on the estate must be taken into account on the death of the predeceased partner/spouse as well as on the death of the surviving partner/spouse.
When the assets are transferred to others, in particular the next generation, use is usually made of the 'gifting' option. By taking advantage of the exemption from gift tax and on account of tax rate differences, substantial tax savings may be realised in some circumstances. In addition to the fiscal aspects of a gift scheme, a scheme needs to fit in with the asset planning. And issues concerning the manner in which the acquiring party is left the right to dispose of those assets can also play an important role.
In addition to the issues concerning inheritance law issues and fiscal matters (whether or not substantial interest levy, business succession facilities, etc.), the question for owners of enterprises is how succession of the board and control should be shaped.
The lawyers and tax advisors at Delissen Martens have extensive experience in advising and conducting legal proceedings in succession matters and in the fiscal aspects thereof.
Delissen Martens lawyers tax advice mediation have widely experienced mediators who can provide mediation, if required, between heirs in order to try and resolve a dispute by consultation. In brief, we can assist you in every aspect of succession and provide you with advice.
/ Team Inheritance and Estate Planning