Estate planning is the process of transferring wealth to another (legal) person. In this brochure we introduce you to the key legal and tax aspects of estate planning in the Dutch Caribbean. Estate planning is important to make sure that your wealth is transferred in a proper legal way and also under the most favorable tax conditions for the (legal) persons involved. The experts at Baker Tilly Dutch Caribbean can assist you with the estate planning of two types of wealth: Private wealth and business wealth.
Private and business estate planning requires pro-active involvement and a long-term vision. It is a complex process that requires thorough financial insight, up-to-date knowledge of the law and the ability to foresee what effect the decisions you make in managing your estate may have on its future value. Baker Tilly Dutch Caribbean combines forces in all these expert fields. In cooperation with estate planning specialists in our international Baker Tilly network, we are able to offer you insightful and accurate advice. We help you see the bigger picture; the entire scope from transferring ownership and division of properties, to making sure you and your beneficiaries will enjoy long-term tax benefits.
Private wealth succession
There are several ways to transfer private wealth. The most common ones are by way of a gift or by inheritance. Without proper planning, gifts or inheritances may become subject to taxation in the form of either a gift tax or an inheritance tax (hereinafter both referred to as ‘estate tax’). Estate tax is the tax paid on the value of the assets transferred.
It is possible to transfer wealth during life by way of a gift. The advantage of transferring smaller portions of wealth during life is that estate tax can be saved (by avoiding the higher progressive rates). In addition, the transferred assets are no longer part of the inheritance and the capital growth on the gifts does not need to be transferred anymore and is therefore free of estate tax. Through careful estate planning, even lesser taxes are possible.
It is possible to regulate the distribution of the inheritance to your heirs through a will. In certain markets inheritance rules may regulate to whom an inheritance may be transferred, for example to the spouse, the children or the parents. This group, together with brothers and sisters, is generally referred to as blood relatives. The inheritance includes all of the possessions of the testator and (almost) all of the debts. In certain cases it may not be favorable to accept an inheritance. Proper estate planning could be the solution to avoid having to make this choice. Baker Tilly is here to assist you with this in an early stage.
Both the Private Foundation (PF) and the trust are ideal entities to seclude wealth. If planned properly, the contribution and growth, as well as the transfer of the wealth to beneficiaries can take place without tax consequences.
Business wealth succession
Part of an individual’s wealth may be the ownership of a company. Sooner or later, every business owner will be confronted with business succession. Like all types of transfers, a business can be transferred during life or upon death. A business may be transferred regardless of whether the company is driven in the form of a sole proprietorship or in the form of a legal entity (divided by shares).
Filing estate tax returns
Our tax lawyers are experts in assisting wealthy individuals and business owners. We listen carefully to your wishes and convert them into practical, efficient and tax favorable solutions. When the moment is there, the drafting and filing of the required estate tax return needs to be done with the utmost care. Our tax compliance department has broad experience in drafting and filing estate tax returns in all Dutch Caribbean markets. Each jurisdiction has its own form and way of dealing with estate tax returns. Due to our extensive experience, we know how to approach the relevant parties and because of our experience we can provide you with a dedicated service at a reasonable price.
To avoid any misunderstanding, we are happy to offer you a fixed fee for each required estate tax return.