A New Year: taking the time to review your Estate Plan now will pay off in the future
Now is a particularly good time to review your estate planning. This is an ideal opportunity to ensure your estate is structured as efficiently as possible, and that your wealth will still benefit future generations in the way you wish.
Here are our 8 tips for making your wealth work best for you and your family.
1. Does your Will need updating?
Your beneficiaries’ circumstances may have changed, so there could be a better way for them to inherit your estate. If you have children, who would you like to appoint as guardian(s) to look after them if you have died before they are 18? Are the current executors still willing and able to act and are they the most appropriate people to appoint?
If you do not have a Will, the intestacy rules under Bermuda law govern who will inherit and administer your estate, which may result in unintended people benefitting and disadvantageous tax implications.
2. Do you have a digital assets record?
It’s a good idea to review the assets and information you hold digitally in online accounts. Store your logins and passwords securely and ensure the executors can access them after your death, along with instructions on how to administer your online accounts.
3. Do you have assets abroad?
If so, do you have a Will in that jurisdiction? If you own property outside Bermuda, it might be affected by local inheritance laws and succession issues, in which case you could need a separate Will for that jurisdiction.
4. When did you last look at your estate/tax planning?
How can you leave as much as possible to the people you want to benefit – without increasing the tax liability? You may be able to restructure your estate to reduce the stamp duty payable on your death, using the various exemptions available and other vehicle efficient options. You might like to consider setting up a trust to protect your wealth and to provide for future generations, whilst still offering flexibility.
5. Do you still have the optimum trust arrangements?
The trustees should review your trust investments, decide what to do with the trust’s income and capital, and complete any compliance for the trust. It may be possible to improve your trust arrangements, by setting up an extra trust as part of your estate planning.
6. Do you know what pension provision you have?
Who should receive your pension death benefits on your death? Should your pension nomination forms change?
7. Do you know whether you have any life insurance policies?
Specifying that you want your life insurance policy proceeds to be paid to a nominated beneficiary or beneficiaries rather than to your estate “executors and assigns” means they likely won’t form part of your Bermuda estate on your death.
8. Have you set up Enduring Powers of Attorney/Health Care Directives?
It’s a safeguard that will give you peace of mind. An Enduring Power of Attorney lets you appoint the people you want to make decisions on your behalf about your property and finances. In the event something happens to you and you do not have an Enduring Power of Attorney in place, a family member or members or a third party would have to apply to the Supreme Court to be appointed your Receiver under the Mental Health Act 1968. This is a very costly and a time consuming procedure and there are yearly reporting requirements.
A Health Care Directive lets you appoint the people you want to make decisions on your health, if you’re no longer able to make them on your own or to communicate them to your medical care provider. The medical directive contained in the Health Care Directive may be changed at any time up until then.
This publication is for general guidance only and does not constitute definitive advice.