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READING 12: ESTATE PLANNING IN A GLOBAL CONTEXT - Coggle Diagram
READING 12: ESTATE PLANNING IN A GLOBAL CONTEXT
MODULE 12.3 GIFT VS. BEQUEST
https://bit.ly/2A765GF
Gifting
likely gives up control and cannot be revoked if circumstances change.
How to decided gifting vs. bequest, which one is better?
calculate a ratio of a gift now versus bequest at death
A ratio above/below 1 indicates that from a tax perspective it is favorable/ unfavorable to gift now.
https://cutt.ly/TyGeamv
MODULE 12.2 ESTIMATING CORE CAPITAL
Core capital
= lialibilties+ reserve for unexpected
needs
Excess capital = total assets - total liabilities
Mortality Probabilities
Mortality table
https://bit.ly/36K22w7
https://bit.ly/3dijlXG
Safety Reserve
Mortality tables are based on
average
life expectancy. If the amount in excess of the core capital calculated with a mortality table were gifted away
50% chance the gift giver will outlive the remaining capital.
Thus, core capital should be increased by a safety reserve.
Lower initial portfolio returns or more initial spending could create a
path dependency risk
of drawing down the portfolio and diminished chances of recovery later.
Monte Carlo Simulation
commonly used in retirement planning
probability of ruin
differing start dates for retirement
(start of withdrawals)
distribution percentage
MODULE 12.1 ESTATE PLANNING
Estate
Your
estate
is everything you own: financial assets; real estate (a.k.a. immovable property);
Estate planning:
is the planning process associated with transferring your estate to others during your lifetime or at death so that the assets go to the individuals or entities you intend and in the most efficient way
Will
the
legal document
that states the rights others will have to your assets at your death
Probate
A
legal process
that takes place at death, during which a court determines the validity of the decedent 's will inventories the decedent 's property, resolves any claims against the decedent, and distributes remaining property according to the will.
WEALTH TRANSFER TAXES
gifts
referred to as lifetime gratuitous (without the intent of receiving value in return) transfers.
subject to gift taxes
bequests
referred to as testamentary (after death) gratuitous transfers and can be subject to estate taxes,
community property rights
each spouse is entitled to one-half of the estate earned during the marriage
separate property rights
each spouse owns and controls his or her property
Spouses under community property rights, may not receive the assets, but can still get the shares of the assets , under forced heirship rules.
MODULE: OTHER ESTATE PLANNING TECHNIQUES
Generation skipping
Spousal exemptions
Valuation discounts
:green_cross:reduce the value of wealth transfers and the associated transfer taxes
lack of liquidity
minority interest discount
Charitable gifts (tax exempt receiver)
https://cutt.ly/tyGeg4k
Trusts
Revocable
Settlor can resume ownership of the assets.
Irrevocable
the settlor relinquishes ownership and control
Types of trust
Fixed trust
1.the pattern of distributions to the beneficiaries is predetermined by the settlor
Discretionary trust
the trustee determines how the assets are to be distributed
Beneficiaries have no legal right to either the income or the assets of the discretionary trust.
Spendthrift trust
is used to transfer assets to a beneficiary who is too young or is otherwise unable to manage the assets so that the settlor can still manage the trust
Life Insurance
very efficient for
transferring assets
or even helping beneficiaries pay
inheritance taxes
MODULE 12.5 RESIDENCE VS.SOURCE TAXATION
Income Taxes
Source jurisdiction
Kiem tien o dau, tra thue o do
Residence jurisdiction
O dau cung bi danh thue
Wealth Transfer Taxes
Exit Taxes
Relief From Double Taxation
Exemption method
Credit method
Thue can tru .
tong thue phai tra dua tren highest rate tax
Deduction method
Most heavy, trừ đí số thuế đã nộp ở nước A, phần còn lại là thu nhâp chịu thuế ở nước B.
INTERNATIONAL TRANSPARENCY
