Bulletin | October 14, 2021

Preserving Inter-Generational Wealth Through Succession Planning

Bulletins issued by Overseas Trust and Pension Limited (OTAP) provide insights and commentary on topical industry matters. The bulletin and its contents are not intended as advice nor should they be construed, interpreted or used as such.

For use by Professional Advisers only.

An overview of International Pension Plans (IPP’s)

One of the most important aspects of financial planning is ensuring the passing on of wealth to a spouse, family and future generations on one’s demise.

However, this is one area of financial planning that can become very complex when the deceased person’s assets or accounts are in different countries, and this is often overlooked or not provided for adequately.

Foreign Matters

All countries have their laws of succession, administrative processes dealing with the transfer of assets of the deceased and tax laws in respect of such assets. These issues are complicated but can be made more complex where no valid foreign will is held for such assets.

The implications can be significant and range from extensive time to transfer assets and associated administrative costs to unforeseen taxation and even the courts appointing recipients of such assets contrary to the expectations or intentions of the deceased. Such outcomes can be very traumatic and have a negative financial impact, which can be extreme, on people that were not expecting it.

However, IPP’s mitigate the need for foreign wills, executors, and foreign laws of succession. In short, they deal very adequately with the otherwise costly and complex matters raised above. In addition, they offer significant flexibility as to whom can be appointed as a beneficiary which can range from an individual to a trust or second pension for a spouse or dependant.

Consolidating Foreign Assets

Given the many benefits of IPP’s, it is of no surprise that many clients of OTAP have used their IPP’s to consolidate their foreign assets to benefit from the advantages and simplicity their IPP provides at the time of their passing.

Certainty and Peace of Mind

The above shows how IPP’s provide significant certainty and peace of mind to both the member and those that are intended to benefit from them. Furthermore, the death benefits are paid expediently, unlike an estate that takes many months to wind up. This ensures no financial hardship due to administrative processes and gives some reprieve at a time when family members are dealing with the passing of a loved one.

In addition to the topic of succession, IPP’s have many other benefits from asset protection to international portability.

Authored by

Alf McKnight
International Pension Specialist

Overseas Trust and Pension (OTAP) is the brand name of Overseas Trust and Pension Ltd, Overseas Pensions and Benefits Ltd and Overseas Pensions Administration Ltd, (the Companies). They are licensed by the Guernsey Financial Services Commission under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2020. Overseas Trust and Pension Ltd and Overseas Pensions and Benefits Ltd are registered in Guernsey numbers: 55506 and 39935 respectively. Their registered office is Lefebvre Court, Third Floor, Block B, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP. Overseas Pensions Administration Ltd is registered in Alderney number: 1427 and its registered office is Millennium House, Ollivier Street, St Anne, Alderney, GY9 3TD.

Overseas Trust and Pension Limited is an authorised financial services provider in terms of the South African Financial Advisory and Intermediary Services Act (“FAIS”) and is regulated by the Financial Sector Conduct Authority (“FSCA”) of South Africa. FSP number 47261.

The Companies do not offer financial, investment or tax advice, any information provided should not be considered as such. The Companies accept no legal liability for losses, damages or expenses which you may incur or suffer directly or indirectly by using this information.

We endeavour to make sure the information is accurate and up-to-date however, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information.

We strongly recommend that clients take regulated financial and investment advice relevant to their individual circumstances. It is the responsibility of clients and their advisers to review the advice and investments at least annually. The product terms, risks and charges (including: initial, annual and exit) should be considered, understood and agreed with your Financial/Investment Adviser.

Past performance is not a reliable indicator of future results. Investment values and the income from them can go down as well as up and may be affected by changes in rates of exchange. An investor may not receive back the amount initially invested.

Data Privacy Statement: Please refer to our Data Privacy Policy published on the Overseas Trust and Pension website: www.trustandpension.com/legal-and-regulatory