Don’t Die Intestate



Brian Johnson

Otherwise your loved ones may be left to untangle your legacy, giving them months or even years of aggravation instead of remembering the good times you shared with them. This was brought home dramatically to me recently after the death of a long-term client of the company. Although I had asked on several occasions if his will was up to date it turned out that he had never actually prepared one. His former partner in the UK and his new partner here in Russia are now fighting over the remains of his assets both no doubt being helped by lawyers eager to have their share of the spoils. It’s a distressing time for all the people involved and instead of celebrating his life and achievements they instead have to argue and fight over the remaining assets. There are also children involved in both countries which complicated the situation even more.

Keeping hold of your accumulated wealth and making sure that it is ultimately distributed to those you had intended are the two main objectives of fiduciary services.

Many Specialist asset protection companies have been established to make sure that your assets are appropriately sheltered and efficiently passed to your nominated beneficiaries. It is also important to set out what you want to happen in the event of severe illnesses or life changing events that leave you unable to make decisions for yourself. With this in mind we at PFS offer three levels of assurance, which start with the most basic, and fundamental of documents – the Will.

STEP 1: Why do I need to make a Will?

A Will makes it much easier for your family or friends to sort everything out concerning your assets and family when you die – without a Will the process can be more time consuming and stressful. If you don’t write a Will, everything you own will be shared out in a standard way defined by the law – which isn’t always the way you might want.

A Will can help reduce the amount of Inheritance Tax (IHT) that may be payable on the value of the property and money you leave behind. Writing a Will, which includes instructions on Guardianship and offers a Power of Attorney, is especially important if you have children or other family members who depend on you financially, or if you want to leave something to people outside your immediate family.

Do I also need a Living Will?

The simple answer is Yes. A Living Will allows you to take care of ‘end of life’ decisions about care, medical treatment etc. This lasting power of attorney comes into effect if you are unable to make decisions for yourself and remains in effect until you die. Once you have made a Living Will, appointed Guardians as necessary and executed a Power of Attorney all of your basic asset protection needs have been taken care of. Dependent on your nationality and the complexity of your affairs, you may well have also mitigated IHT on certain assets, which can now legitimately by-pass your estate. The next step of asset protection is to consider the creation of a Trust.

Step 2: Do I need a Trust?

This depends on your asset base and the complexity of your estate. Not everybody has the need for a Trust, but it should definitely be carefully considered, rather than dismissed because you think that Trusts are only used by wealthy aristocrats. Assets such as investment portfolios and property may be put under a discretionary Trust. This Trust is legally owned by the Trustees who you appoint and give direction to. With you as Settlor, and whoever you want to have the asset as the ultimate ‘beneficiary’, this structure will guarantee that the assets are passed to the right people and avoid the many potential problems that often arise as a result of insufficient planning. The Trust can also make sure that your assets are kept away from governments, lawyers, ex-partners and spouses. In summary the Trust allows a good measure of asset control and protection.

If after analysis with your Platinum Consultant it is deemed that a Trust is useful then you should also consider an ORSO Trust.

Step 3: Consider establishing a Hong Kong ORSO

ORSO or the Occupational Retirement Scheme Ordinance offers a tax-exempt Hong Kong pension vehicle, which works in a similar way as the Trust described above. The ORSO goes even further and is a solution is for anybody who has UK or OECD assets.

Created under British rule in 1993, the ORSO is recognized and quoted on Her Majesty’s Revenue & Customs (HMRC) website as a tax-exempt pension. The ORSO is able to hold UK and overseas property and exempt it from Capital Gains (CGT) and Inheritance Tax (IHT) which is now more crucial than ever following the introduction of CGT from April 2015 for anyone who owns UK investment property. The UK is also bringing in an annual tax on properties valued over £500,000 and owned by a non-natural person. In addition UK IHT, which is charged at 40% on estate values over £325,000, can be legitimately mitigated by using an OR SO.

An ORSO goes one step further than a simple Trust and can more than pay for itself because of the huge tax savings that it affords its owners.

Platinum Fiduciary Services

P.F.S. International’s office in Moscow is at Office 1909, Imperia Tower,

Presnenskaya Naberezhnaya 6,

Moscow City International Business Centre, Moscow 123317

+ 7 495 660 8887

[email protected]

Platinum Financial Services are affiliate members of the Society of Will Writers