Sometimes people don’t make the proper arrangements for their assets until it’s too late. This means that their assets may go to unintended beneficiaries or even the state. Proper planning for old age and inheritance allows one to have peace of mind for the future. These are 5 important reasons why to plan your estate.
1. Preventing assets from going to unintended people
Everyone wants to provide for the people he or she loves after the inevitable happens. However, forced heirship rules in Cyprus may provide for a family member to benefit even if the relationship between the deceased and that person is no longer on good terms. Passing away young is also something unexpected and it is important for people to make proper arrangements for their young children.
In addition, people may have children from different marriages, a secret affair or their spouse may remarry and disinherit their children or an accident may happen that takes away the lives of both spouses.
Proper planning also allows for people to give the proportions of their estate to the beneficiaries they wish, such as for example leaving less to a child who has benefited from lifetime gifts or more to a child with a disability.
2. Avoiding family conflicts
There is probably nothing worse than a family fighting over properties, money or jewellery and planning your estate protects against family conflicts from ensuing. It’s prudent to explain the reasons for leaving the specific assets to each of the beneficiaries or leave a letter explaining them.
3. Tax advantages
No one likes to pay tax. People are working hard enough in their life to give it to taxes when they can make arrangements to legally avoid or mitigate taxation. Proper structuring of the assets, businesses and income from any country means that people can enjoy the benefit of their hard work and leave it to the people they want instead of the state.
The favorable and extensive double tax treaties of Cyprus with other countries (including England) means that there is tax to save whether income is arising from renting properties in the UK, having an overseas pension or otherwise.
4. Care expenses
People grow fragile, both physically and mentally. It is important to make provision for any care expenses that may be needed in the future. If money is needed to cover those expenses one can rest assured that one will be taken care of and only the remainder of the assets (if any) will go to the intended beneficiaries.
5. Asset Protection
Lastly, estate planning may protect the assets of people who are involved in a risky business or profession. When times are good, profit generates. But when times are bad, that profit should be shielded against creditors, the taxman and any other person wanting to take it away. Even for people who have smaller estates proper planning may mean that they avoid the probate (administration of estate) process in Cyprus that will probably take longer and cost more than planning before the inevitable.