What is Estate Planning

Estate planning is the fiscal and legal guidance of relationships, with the aim of transferring assets to surviving relatives in a tax-friendly manner. This form of guidance is particularly important for people who have large assets. Estate means legacy in Dutch. This therefore concerns advice regarding the inheritance. The goal is to look for options where as little capital as possible is lost to taxation. By considering the transfer of assets to surviving relatives during your lifetime, this can be done in a tax-friendly manner. After death, the entire estate is transferred to the surviving relatives. With large assets, it is advisable to start estate planning at a young age.

Inheritance law

After death, inheritance law stipulates what the consequences will be in terms of assets and possessions. The heirs are normally the husband or wife and the children. Deviating wishes can be recorded in a will. Within Estate Planning, the options offered by a will will also be examined. After death, the tax authorities will collect inheritance tax on the inherited amounts from the heirs. There are high exemptions for the husband/wife, but for other people there are hardly any exemptions and the tax percentages will be higher. The amount of inheritance tax can be as high as 68 percent of the inherited amount. Estate Planning by an expert advisor can save people with large assets a lot of tax money. The best advice in this area can be given by a notary.

Making donations

Donations are a permanent part of the plan to transfer assets. Parents are allowed to donate tax-free amounts to their children every year. The maximum amount is increased annually. The maximum donation amount to children is 4,556 (2009). Parents may donate a larger amount on one occasion; the child must be between 18 and 35 years old. The one-off donation amounts to a maximum of 22,760 (2009).

When a will?

People draw up a will in order to deviate from the legal regulations and to record additional matters and wishes. Drawing up a will is not mandatory, but it can prevent many problems and save money. A will is binding and applies above the law. It does not matter how old the will is, but the last will made is valid. As part of Estate Planning, a will will almost always be drawn up.

Matrimonial property law

Everyone who gets married in the Netherlands does so in community of property. People who want to agree on a prenuptial agreement must arrange this with a notary before the wedding. A commonly used way to save assets can be through a marriage with a prenuptial agreement. In many cases, the spouses have separate assets. This allows them to take out insurance in a smart way that pays out amounts after the death of one of the partners. If the premium payment for such insurance is not at the expense of the deceased’s assets, the payment will remain outside the levy of inheritance tax.