The main questions in inheritance planning are:
- to whom?
- how much?
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 person A, but person B has the right of usage.
3) after death - tools that are connected to the rights of the widow/widower and the heirs kicks in after death. A widow/widower can waive his/her right to certain assets and a parent can waive his/her right in favor of his/her child(ren) in order to avoid paying Finnish inheritance tax twice.
Inheritance planning might seem overwhelming and difficult to grasp, but all that is needed is good communication within the family and a trusted family lawyer. I encourage my clients to have "family meetings" where these issues are discussed in order to find out who is interested in the summerhouse, or who would rather have liquid assets, stock etc. Sometimes it is also important to tell an elderly family member to live a little, and not hide his/her money in the matrass. Communication is absolutely the best way to avoid feuds within the family.
A child that is born in Finland today, will live to become 104 years old - according to statistics. So now that we have a deadline we might have the courage to face up to the fact that none of us are getting out of here alive - and we can start planning.
During the following weeks I will deal with specific ways to plan. Donations are up first - next week in my next blog.