Tariq Aboobaker Reshma Chopde

Webinar by Amicorp Group

WITH THE EXPERTS

Topics we will address

Why succession planning is so important and the consequences when it is not taken care of

We will talk about some of the options to plan for your succession

How these tools work both for a family or a business

Our expertise and how we can work with you to achieve what you are looking for

ESTATE & SUCCESSION PLANNINGFOR INDIAN NATIONALS

SUCCESSION PLANNING

Estate planning is the process of anticipating and arranging for the disposal of your estate during and after your lifetime.

An Estate Plan includes:

Estate management;

Estate preservation; and

Estate legacy

SUCCESSION PLAN?

Business Houses, Entrepreneurs & Professionals;

Nuclear family or Joint family;

Family with no legal heir or with a special child;

Family with beneficiaries across globe with different residential status;

NRI family with assets in India;

Multiple marriages;

Inheritance tax planning;

Protection from any unforeseen events;

Any person who would like to distribute his assets as per his and not as per the governed law.

“In other words, every person needs a succession plan”

SUCCESSION PLANNING

SUCCESSION PLANNINGAvoid disputes within or outside the family;

Asset protection – against claims/litigation from within or outside the family;

Asset protection during divorce & separation;

Smooth distribution of wealth as per one’s wishes;

Safeguard interests of the dependents;

Efficient and uninterrupted management;

Preservation of assets & Succession planning;

Demarcation of personal & business income;

Inheritance Tax planning;

Planning for Old age/Medical emergencies or Maintenance of a Special Child;

Philanthropic aspirations.

SUCCESSION PLAN

If one dies intestate, which means without making a Will, Assets will be distributed according to religion based personal law applicable to one, which can be a lengthy

process with undesired results

Christians, Parsis, Jews

Indian Succession Act Hindu Succession Act

Muslim

Sharia Law

Hindu, Jain, Sikh Buddhist

Amicorp

How do I prepare myself for succession planning?

Can I still retain ownership of wealth after the succession?

Can I make a provision to receive periodical income

after succession?

SUCCESSION PLANNING

Where doI start ?

How can I create a strong circle of trust

between various stakeholders?

How can I ensure that future conflicts within the

family are avoided?

How may I effectively plan succession of

business?

Do my family members share the same vision as

I do?

SUCCESSION

TOOLS FOR SUCCESSION

Trust Combination of any of them

Will / Gift

Text

MODES

A WILL?

Will is a Legal document that comes in play on the demise of the testator

It carries the wishes of an individual regarding his / her estate /assets

WRITE A WILL?

Components of a valid Will

He/she must have attained the age of majority (21 years)

The person making a Will should be of a sound mind

Attestation by two witnesses

Each witness should sign the Will in the presence of the Testator

The Will should be signed by the Testator/Testatrix

The Will should be in writing

TRUST?

PRIVATE TRUST

A Trust is a relationship whereby property

Is transferred by one party (Settlor)

To be held by another party (Trustee)

For the benefit of a third party (Beneficiaries)

Governed by the Indian Trusts Act, 1882

PUBLIC TRUST

When a trust is formed for the benefit of the public or any section of the public, religiousor charitable purpose includes a temple, any other religious or charitable endowment

TRUST

Real Estate, Bank Acc., Art etc.

Investment Portfolio

Business , Inherited

Assets

Wife Children Parents Charity Settlor

Settlor

Protector

Trustees,Administrator / Managing Trustee

Trust Assets

Advisory Board

TRUST CAN HOLD

Bank Account & Investments

Portfolio

Art & Jewelry

Holding Companies

Business/Inherited Assets

Real Estate

Beneficiaries

Family Trust

TRUST STRUCTURE

Protector

Trustees

Beneficiaries

Trust Assets

Specifies the terms of trust, trustees, beneficiaries, Protector and conveys legal title to trustees

Supervises the operations of the trust upon the demise of the Settlor and keeps a vigil on the trustees

Trustees hold legal title to trust assets.

Distributions

Family Trust

Investment Advisory Board

Provides guidance in terms of investments, divestments….

Settlor

Family Trust

The Settlor contributes assets to the trust and

receives benefits during his lifetime

REVOCABLE TRUST

The Settlor contributes assets to the trust and the

family members are the beneficiaries to the trust

Family TrustIRREVOCABLE TRUST

TRUST

PROVISIONS

Revocable TrustAll income arising to any person by virtue of a revocable transfer of assets shall be chargeable to income-tax as the income of the transferor. Therefore, will be taxed as per individual slab rate.

Transfer to the TrustAssets settled into an irrevocable trust shall not give rise to any income-tax implications in the hands of the settlor.Distribution to the BeneficiariesReceipt of property by the Beneficiaries shall not lead to any tax implications

TaxationIrrevocable TrustIncome of irrevocable trust is taxed in the hands of the Trust at Maximum Marginal Rate, in case of a discretionary trust or taxed in the hands of the Beneficiaries at their individual slab rate, in case of a determinate trust.

FAMILY VERSUS BUSINESS

Family

Driven by emotions

Bound by love and affection

Selection based on seniority

Resisting change

Business

Driven by task

Bound by profit and growth

Selection based on meritocracy

Exploiting change

FAMILY VS BUSINESS

The head of the family is reluctant to step down

Different working style of the Next Gen

Capability and Competency

Aspirations and Interests of the Next Gen

Outside Talent

CIRCLE MODEL

Tagiuri & Davis 1982

1. Family Members

2. Family Shareholders

3. Shareholders

4. Employee Shareholders

5. Employees

6. Family working in the business

7. Family shareholders working in the business

FAMILY AND BUSINESS

Remember: Managerial ability is more important than birthright.

Develop policies that will help your successors to manage expectations, performance and relationships more effectively.

Identify spoken and unspoken rules.

Deal with emotional issues before emotion becomes the issue.

Bu

llet

Da

sh

Su

b-b

ulle

tBusiness

Ownership

&

Continuity

Exit

Strategy

Dispute

Resolution

Weath

Preservati

on

Family

&

Business

Family

Vision

Estate

Planning

THROUGH A PRIVATE TRUST

Different Trusts for Business Assets and Private Wealth

PFT 1

FamilyMembers

Beneficiaries

Business Assets

PFT 2

Family Members

Beneficiaries

Personal Wealth

Settlor Settlor

WHAT WE CAN DO FOR YOU

SERVICES INCLUDE

Areas to be considered by private family groups

Personal and business vision, goals and attributes

Personal goals ?

Vision for future of family ?

Roles and responsibilities

Formalize and agree roles and responsibilities for family members ?

Should spouse be allowed to work ?

Family strategy

Are the family members able to work together?

Family remuneration

How should it be determined ?

Board and exist strategy

How should the board operate going forward ?

PLANNING SERVICESWill

Drafting & registration of Will

Trust

Drafting of Trust Deed & registration of Trust

Management of Trust as Trustee/Managing Trustee

Family Business Consulting

Articulating the Family Constitution

Building the Business Governance Model

Next Generation Education

Business Restructuring

Arbitration between family members

Executorship Services

Identifying assets of the Testator

Obtaining Letter of Administration/Probate fromthe Court

Recovering dues & paying debt, duties and expenses

Distributing the assets to the beneficiaries

Coordinating the preparation of tax returns

Filing final statement with the Court

Document Preservation / Custodial Services /Escrow Agent

Safe custody of property documents mentioned in a Will or held under a Trust

Acting as an Escrow Agent and a Custodian

AMICORP AS TRUSTEES

Property management;

Overseeing and managing all functions related to the trust;

Transferring movable (i.e. shares) and immovable assets (i.e. real estate) to the Trust;

Pay rent or collect rent on behalf of the Trust;

Assistance in filing of tax return on behalf of the Trust;

Audit for the Trust;

Conducting board/shareholders meetings where the Trust holds shares in a company;

Safe Custody of the Trust Deeds and other related documents;

Distribution of the assets to the beneficiaries as mentioned in the Trust Deed;

Appointment of Investment Advisory Board;

Signing on all investment related documents;

Signing on all Trust related documents;

Applying for Pan Card for the Trust;

Assistance in opening of Bank/Demat and Trading Accounts;

Family welfare and maintenance.

LOCATIONS

TRUST LAWS OFFERED

BarbadosBVI **Bahamas * ***CaymanIndiaNew ZealandMauritiusSingaporeUK * ***USA – South Dakota **

SERVICES PROVIDED FROM

Cayman *Barbados ** Switzerland ***

AMICORP GROUP

AMICORPKnown as a leading global service provider, Amicorp Group offers multi-level and business critical solutions to global corporates, international advisory groups, financial institutions, investment firms and family offices. We provide personalized service, and we tailor our offerings to the needs of our clients.

700+ 30+ 10,000+ 40+

An independent growing global provider of company secretarial and fiduciary services.

Serving corporate but also high-net-worth clients.

Hong Kong based group, establishedin 1992.

Global networked team.

ISO 9001, ISO 27001, SAS 70 type II & ISAE 3402 type II, Six Sigma.

Licensed & regulated corporate, trust and fund provider.

We focus on UBO's in LatAm, Middle East, Africa and Asia.

Strict compliance policies, compliant solutions.

Secure systems with backups in Geneva.

WE ARE

OFFICES

OFFICES

“IT’S NOT WHAT YOU TAKE WHEN YOU

LEAVE THIS WORLD BEHIND YOU. IT’S WHAT

YOU LEAVE BEHIND YOU WHEN YOU GO”

OUR EXPERTS

+91 98705 00786t.aboobaker@amicorp.com

Tariq Aboobaker

+91-22-2431 1621/1522 R.Chopde@amicorp.com

Reshma Chopde

THANK YOU