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Gifts - a tool for inheritance planning

Inheritance planning

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Advance inheritance

Advance inheritance

The basic idea behind an advance inheritance is the principle of equal treatment - i.e. that parents usually want to treat their children equally. Consequently, a valuable gift to a natural heir (a child, grandchild etc.) is treated as an advance, unless expressly stated in for example the gift deed, that this is not the case. Gifts to close family members can be a part of fulfilling a tax plan or a question of lending a family member a helping hand in time of financial hards

Gifts - a tool for inheritance planning

Gifts - a tool for inheritance planning

A gift is something given voluntarily directly or indirectly without payment in return. A gift can be measured in money or money’s worth and is usually given to show favor toward someone or to honor an occasion. As far as the concept of gifts goes, there is no distinction made between immovable or movable property. The same rules apply whether the gift consists of shares in the family company, real estate, a trip abroad, a right of possession, a car or a pet animal. Everyone

Inheritance planning

Inheritance planning

The main questions in inheritance planning are: - to whom? - how much? - when? In order to plan you need tools. The most common tools in Finland are donations, last wills and marital contracts. The tools are used at different times: 1) in life- these are for example donations to your children and grandchildren 2) at death - a will becomes effective upon death. Through a will you can decide who gets what, and you are for example able to state that ownership is granted to perso

Choice of law clause

Choice of law clause

Last week I wrote about how your place of residence decides applicable law. I also mentioned that when it comes to certain specific legal issues like your succession, marital assets etc. you might want to consider the possibility to choose applicable law. Even if the choices are limited, you still have a choice. An express governing law clause offers certainty. Since August 2015 EU has an inheritance regulation in force, that covers every habitually resident individuals' inhe

Which law is to be applied?

Which law is to be applied?

Last week I wrote about how a person by moving to another State can decide where he/she is taxresident. But just because a person has successfully managed to change his/her tax residency, does not automatically mean that the State, that has the right to tax him/her, also has jurisdiction over his/her divorce or inheritance issues. There are different criteria for each area of law. A person that has lived in the same country all the time, and always paid taxes to the same Stat

Abolishing gift- and inheritance tax in the name of equality

Abolishing gift- and inheritance tax in the name of equality

Equality is a fundamental principle of taxation. Taxation must be carried out in such a way that the tax burden is imposed equally on all taxation subjects. The progressive tax, which imposes a higher rate of taxation upon individuals with large incomes than on those with small incomes, is an attempt to achieve this objective. The basic idea behind inheritance- and gift tax is that a person transfers property to another person while receiving nothing, or less than full value,

Non-traditional families; the next hot topic in European family law

Non-traditional families; the next hot topic in European family law

I have just come home from the annual conference on European family law in Trier, Germany. We have discussed and debated everything from marital property regimes in Muslim jurisdictions to electronic apostilles (e-APP). Based on the discussion I draw the conclusion that the most burning topic right now is the rights of non-traditional families. EU has done great progress when it comes to the handling of property rights in relation to cross-border inheritance. But the next big

Lawful Share - Forced Heirship in Finland

Lawful Share - Forced Heirship in Finland

Under the Finnish code of succession (40/1965) it is possible to make a will in favor of anyone alive, but the direct descendants always have a right to a lawful share – half the estate. Direct descendants meaning child, adoptive child, grandchild etc. For example, if the deceased had two children, who would normally inherit the whole estate, but he/she made a will that gave everything to a third party, then the children still receive one half of the estate, that is one quart

International trust funds in Finland

International trust funds in Finland

I come across persons with common law trust funds in my work more and more often. People who have put a great deal of time and effort in planning their inheritance in a common law country, and then move to a civil law country like Finland. Trusts are a very important part of the common law system. Actually, the trusts are that important to these countries that the UK did not want to be a part of the new EU-inheritance regulation. The regulation is scheduled to become applicab