Etica Wealth Management Pvt Ltd - Estate Planning


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How to Write a Will, How to establish a Trust

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Etica Wealth Management Pvt Ltd - Estate Planning

  1. 1. 28-05-2012 Estate Planning A simple way to invest in equity and create wealthCONCERNS Concerns – Family vs. Business Preservation of assets incase ‘generation next ‘ is not as per expectations Preserve assets and Reputation of Family Bring Love/ Bonding / Togetherness in the Family Business succession (Management & Ownership) Sustainability of Family and Business till Perpetuity Upkeep, education, marriage, etc of ‘generation next’ Fund growth without loosing control on my assetsIn India Judicial and legal framework not conducive for speedy resolution Inter‐generational transfers not planned systematically Lack of uniform laws for geographically diverse assets 1
  2. 2. 28-05-2012WHAT IS ESTATE PLANNING? Estate planning deals with leaving your wealth back to your heirs. Tools for Estate Planning – Nominations, Will, Trust, Power of Attorneys Estate Planning minimizes confusin and emotional strain on beneficiaries of the estate It ensures your assets are distributed in the manner you want to distribute It helps to preserve your assets It ensures minimum or no court involvement It helps to protect your dependentsWHAT IS ESTATE Your "estate" consists of all property owned by you at the time of your death, including: Real estate Bank accounts Stocks and other securities, Life insurance policies, Personal property such as automobiles, jewelry, and artwork 2
  3. 3. 28-05-2012TOOLSWillsA legal declaration of the intention of a testatorwith respect to his property, which he desires tobe carried into effect after his deathTrustsA Trust means vesting or placing property underthe control of a person in the confidence that hewill hold it for the benefit of a third person and/orhimself. Depending on the end objective, a trustcan be public, private or charitableFamily CouncilA working governing body elected by the Familyamong its members to deliberate on family andFamily businessSTEPS OF ESTATE PLANNING Family Information Financial Information Goal Setting 3
  4. 4. 28-05-2012STEPS OF ESTATE PLANNING Legal and Tax Analysis.. Plan Recommendations.. Prepare DocumentsSTEPS OF ESTATE PLANNING Review Documents Execute Documents … 4
  5. 5. 28-05-2012WILLS V/S TRUST • Comes in to existence post demise of the will creator. • Vehicle to pass on the wealth in a T R U S T SWILL planned manner / over a period of time. • Way of passing ownership of wealth to Future Generation. Invariably leads to fragmentation • It provides for management of the estate during one’s lifetime & also provides for distribution & management of wealth post • Does not allow control of end use, monitoring etc. demise in a planned manner • Probate formalities are compulsory in almost all • Provides control for distribution and cases monitoring • Contestability of Will is easy • NIL probate required • Low Confidentiality Structure: Its becomes a public • Contestability is difficult document during probate • High Confidentiality Structure • Can be revisited unlimited no of times, only last tested will is accepted by court of law • Bankruptcy Remote structure: : If assets are unencumbered • Not a Bankruptcy Remote Structure • Cost more to prepare, fund and manage • Cost of Will is lesser than Trust, Cost to probate a but avoid cost and hassles of probating. will can be substantialDIVERSE OBJECTIVES OF A FAMILY TRUST… Succession Planning: Preservation and growth of Family Wealth for future Generations Separate Business Assets from personal assets – Bankruptcy Remote Reduction in Administrative Hassles Ring fencing family wealth and leveraging Management of Wealth - Extremely Relevant for NRI for management of Indian Assets. Confidentiality of Financial Transactions 5
  6. 6. 28-05-2012TYPES OF TRUST…Public Trust Members of an uncertain and fluctuating body and the Trust itself is of a permanent nature and indefinite character. Private Trust The beneficial interest is vested absolutely in one or more individuals or beneficiaries who are ascertainable. 6
  7. 7. 28-05-2012FAMILY TRUST Cash Deposits, Securities, Real estate, loans, Investments, INVESTMENT ADVISORS (Individuals/ Holding Company) TRUSTEE Settlor, Family Members SETTLOR Ownership & administer the trust SETTLOR (Lead Family Member) (Lead Family Member) Achieve objectives as per trust deed. Draft Trust Deed Define Trustees & Beneficiaries Gift of Assets PRIVATE TRUST PROTECTOR PROTECTOR TRUST Distribution of benefits as per trust deed Distribution of benefit as per trust deed BENEFECIARIES BENEFECIARIES BENEFECIARIES BENEFECIARIES BENEFECIARIES BENEFECIARIESWHO NEEDS ESTATE PLANNING?If you own anything or have people who rely on you it is a good idea to havea plan. The more complicated your personal and financial affairs, the moreimportant it is. You should also review your estate plan at least once everythree years and whenever your circumstances change, such as: getting married, living with a partner, separating or getting divorced as soon as you have children or step-children buying real estate or other valuable assets buying, selling or operating a business if you have family members with special needs or children who are vulnerable if you set up a family trust or company 7
  8. 8. 28-05-2012For any further information, please contact:Mr. Gajendra Kothari, CFA, CAIA, ICFAM:+91 98678 24321E: gajendra.kothari THANK YOUÉtica Wealth Management Private Limited501, T-39 Sunshine Building,Shastri Nagar, Lokhandwala Complex Road,Andheri West, Mumbai - 400 053Landmark: Suburban Diagnostics, Near Lokhandwala CircleT: +91 22 2632 9644 +91 22 4264 8740E: 8