Heritage Planning is a set of strategies aimed at the planning, structuring and perpetuity of heritage. In it, several financial issues are encompassed, going far beyond a mere control of income and expenses, contrary to what many can imagine. Wealth Planning also seeks to answer some important questions:
Where is my money going?
- Is my current standard of living in line with my financial situation?
- Is my succession the way I would like it?
- Is it advantageous to pay off any debt early?
- What is compromising my cash flow?
- Is my financing rate high compared to the market?
What else does Estate Planning cover?
Financial management
Most likely, when talking about Wealth Planning, the first thing that comes to your mind is Financial Management, which is just one of the arms of Planning. Financial management primarily comprises:
- Measuring the standard of living
- Suggestions for reducing the family budget, if necessary
- Debt and financing analysis
- Analysis of the allocation of expenses by sectors (housing, food, transport, etc.)
Asset Management
Wealth Management seeks to observe the client's assets as a whole, including their net assets, real estate, any lawsuits, whether liabilities or assets, etc. This analysis seeks to verify which part of the equity is composed of assets, that is, generates income and which are the liabilities (generate expenses). In addition, it seeks to determine:
The size of equity
Whether the assets are generating an adequate return (investments in financial assets, companies or real estate)
costs and opportunities
Decision making (buying a property, financing a car, paying off debts in advance)
Retirement planning and goals
Objective Planning seeks to assist the client in his short, medium and long term objectives, such as:
- Setting up an emergency reserve
- career transition
- Trips
- Changing a car or apartment
- renovations
- Retirement/financial independence
For this, the value desired by the customer and the period of time for the achievement of this objective are determined. For example: I would like to retire at age 65, with an income of R$ 10,000.00/month. Therefore, through planning, we seek to determine what value the customer must have accumulated at age 65, considering the inflation of the period. In this way, it is possible to define which monthly amount you should allocate to your goal.
Public Pension x Private Pension Analysis
Another very common question that people often have is whether they should opt for the public pension system (INSS) or whether they should seek a private pension. In other cases, it is not known whether it is more worthwhile to contribute to the public pension in the minimum amount and the rest to be allocated to investments or whether contributing to the ceiling would be more beneficial.
Unfortunately, this question does not have a ready answer and the solutions may vary according to your age, goals, type of employment (CLT, self-employed…). In this way, only a personalized consultancy will be able to inform you which type of contribution will be the most advantageous.
Risk management
In addition, one of the arms of Wealth Planning consists of risk management, taking into account the following issues:
- What level of protection does my family have today?
- Do I need life insurance?
- What is the ideal coverage?
- What does the INSS insure in case of accidents?
To understand a little more about life insurance, be sure to take a look at this article !
Tax Planning
Tax planning, on the other hand, goes far beyond the mere annual income tax return (which, by the way, is coming…). In the fiscal analysis, it is sought to verify:
- Am I declaring my Income Tax correctly (simplified x complete)?
- Is it more advantageous for me to receive via PJ or via PF?
- Should my Pension Plan be PGBL or VGBL?
- If I opt for a PGBL, how much should I contribute per year?
- Need for Tax Exit
Declaration in case of country change
Another point that can also bring some tax advantages is the constitution of an asset manager, also known as an equity holding. This instrument is usually used by families with considerable wealth, encompassing both liquid assets and real estate. In addition, the patrimonial holding company can be a great ally in succession planning, which is the last topic we will address!
Succession Planning
Finally, despite being a delicate subject and one that many choose not to address, succession planning is very important. When done in a disorganized way, it can bring a lot of headache and even family conflicts. For this reason, it is always best to be cautious and seek to understand:
- What costs exist in an inventory process?
- What are the implications of the marriage regiment in the event of the death of one of the spouses?
- How can I use life insurance or private pension as succession instruments?
- Is there a need to draft a will?
- On which assets is there an incidence
In the case of setting up an equity holding, it is still possible to donate its shares to its heirs. So that these will be equity partners, without the need for a good part of the assets to go through an inventory process.
Why do Wealth Planning?
As previously discussed, Wealth Planning encompasses your financial life in all aspects, aiming to bring tranquility, security against incidents, as well as tax savings, always using legal means.
Even families with reduced assets can benefit a lot from planning, whether in the management of income and expenses, constitution of reserve and retirement, as well as succession planning.
In short, heritage planning organizes your financial life as a whole, bringing security, tranquility and economy! All this with the support of professionals from the most diverse areas: economists, accountants and lawyers! Click here to talk to me.
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