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Baby Boomers is those born after the second world-war,
specifically between 1946 and 1964. Many studies have identified
this time frame, as the greatest boost to the world population,
also the group that accumulated the greatest wealth.
On January 1st of this year, those born on January 1st, 1946
turned 65,and those born in 1961 turned 50. Typically this age
group marks the mind-shift from wealth creation and
accumulation, to preservation and transfer to the next
generation.
Considering that this section constitutes the wealthiest segment
of the global population, this means an unprecedented transfer
of wealth to the next generation.
A study by the Center for Retirement at Boston College indicated
that the Boomers, apart from their own generated wealth, will
also be receiving around $7.6 trillion as inheritance during
their life time. Research amongst affluent baby-boomers in the
US revealed asset protection and wealth transfer to family
members, as the financial issue of most concern.
Wealth encompasses more than money, stocks, bonds and other
financial products: Half of the world’s wealth consists of
nonfinancial assets such as real-estate and privately owned
businesses. The anticipation is that a great deal of this wealth
transfer will go to family members and charity.
Especially Baby-boomers with investments in the USA should make
arrangements because, if you have investments in the US, and you
are not a citizen or resident of the US:
-US Estate Tax, (currently @ 55% would apply to all your US
Holdings. Generally, only your first $60,000 is exempt.
So, in fact the descendants of those who do not plan could
inherit far less than they ever thought!
Estate Planning is the process by which one arranges the
transfer of his estate to the next generation. By applying
Estate Planning, you will decide, who will get what part of the
family patrimony and under what conditions.
Various tools are available that can be applied and used for
Estate Planning. Tools typically considered by professionals are
Trusts and Private Foundations, whereby the Private Foundation
allows for a greater degree of control to be retained during
your life time.
The Private Foundation can be described as a settlement of money
or other assets for the (continuing) support or attainment of a
purpose (objective) described in the articles of incorporation
by which the foundation is created and internally organized also
known as the Foundation Charter.
An designated group known as the Foundation Council is entrusted
to pursuit the objects of the Foundation. The person who creates
the settlement, is known as the Founder and those who will
benefit from the settlement (traditionally the founder and
members of his family) is known as the Beneficiaries.
Typically the Private Foundations are used for:
To own family businesses and avoid inheritance taxes, at transfer to the next generation.
To avoid US Estate Taxes.
To guarantee payments and other asset allocation to family members, for their
subsistence, education and
other living expenses.
To avoid lengthy and costly probate
procedures.
To manage and make distribution to
scientific, humanitarian, religious or
charitable
projects.
To protect weak and disadvantaged
family members.
To organize and administer funds, for
employees benefit.
As a substitute for a will, thus avoiding
complicated inheritance and costly
probate
procedures.
As a mechanism to protect investments
such as, time deposit accounts, stocks,
bonds or
other securities.
As a device to hold and own real estate
or valuable art work.
As a mechanism to protect against
political risk.
As a mechanism to conserve and
protect assets against eventual
future creditors.
Every year, too manyfamilies go through unnecessary nightmares
because, the patriat kept kept postponing arranging his estate
planning affairs, until too late !
If you are a baby boomer, perhaps it is time to contact your
advisor.
For more information about this or other structuring
possibilities:
Email us at: info@sadekya.com
Or visit our web-site at: www.sadekya.com
Sadekya Fiduciary Partners.
Rudsel. J. Lucas TEP, Managing Director
The Triangle Office Building
Hoogstraat 20-22
P.O. Box 4750
Curacao, Netherlands Antilles
Telephone: 599 9 4652698
rudsel.lucas@sadekya.com
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