Dan Dobry

Planning the Transfer of Assets to the Next Generation 

The purpose of estate planning is to plan for the effective enjoyment, ownership, management, and disposition of assets during life, upon death, and after death. Fundamental also to the process is to maximize the estate for heirs while minimizing taxes and other expenses. Thus, estate planning is the creation of wealth, the preservation of wealth, and the conservation of wealth at the time of death. 

Like any planning, the process of creating an estate plan includes the following steps:

  • Identify your estate planning objectives 
  • Gather information about your current situation 
  • Analyze your current situation 
  • Document an appropriate strategy and the eventual outcome of that strategy 
  • Identify Action Steps required to implement the strategy 
  • Make decisions for action 

The implementation of an estate planning strategy is achieved using a variety of devices. The fundamentals of estate planning are the execution of a will and powers of attorney (for Property and personal care). 

Before a strategy becomes effective, the appropriate legal documents must be executed. Lack of careful planning or faulty execution of legal documents can alter or even invalidate the intentions of a well-thought-out strategy. 


Estate Planning – Goals & Objectives

There are 4 principles of estate planning that are fundamental: 

Principle #1: provide for your own needs for life – Ensure that your personal lifestyle needs are provided for so that you don’t have to ever worry about running out of money. 

Principle #2: safeguarding your estate to the maximum extent possible – by building an investment strategy that can sustain your lifestyle. 

Principle #3: protect your estate from the erosion caused by taxes and other expenses 

Principle #4: distribute your estate in an orderly fashion – To identify and implement a distribution strategy that ensures that your beneficiaries receive what you intended for them to receive and that the distribution strategy is tax effective. 

In addition to these principles, there may be some specific concerns that must be taken into consideration to ensure that an estate planning Strategy fulfills personal goals and objectives. These are as follows: 

Last Will and Testament  

The applicable law on inheritance is the law of the deceased’s place of residence at the time of their death. The applicable law is the law of the deceased’s place of residence at the time of making their will. A will is valid concerning its form if it is made according to:

  • Local law;
  • The laws of the place where it was signed; or
  • The laws of the place of residence or citizenship of the testator when they signed the will or at the time of their death.

As regards real estate, a will is valid concerning its form if it is made according to the laws of the place where the real estate is located.

Occasionally It could be worthwhile to divide assets as best as can be between beneficiaries to avoid unnecessary exposure to local taxes and conflicts of interest. 

Prepare a health care power of attorney and living will 

Things to prepare before approaching the issue of preparing a will 

  • Create and itemize, jewelry, and all assets of sentimental or fiscal value that you own including. (cars art etc.) 
  • Make a memberships list. (For your beneficiaries to cancel) 
  • Make many copies of your lists. Perhaps give a copy to the lawyer who prepares the will. 
  • Prepare a list of professionals that the beneficiaries can approach to get full information. 

Who do you want to appoint as executor of the will? 

You can appoint a family member as the executor of your will. Alternatively, you can appoint a firm of solicitors. The point is to rest assured that your estate will be correctly administered when you pass away.

What is the job of an executor? 

Serving as the executor of someone’s last will and testament can be an honor and the most terrifying experience of your life at the same time. An executor is entrusted with the large responsibility of making sure a person’s last wishes are granted about the disposition of their property and possessions. 

When it boils down to essentials, an executor of a will is responsible for making sure that any debts and creditors that the deceased had are paid off, and that any remaining money or property is distributed according to their wishes. This is different than having “powers of attorney” which commonly makes health care decisions and is a personal representative of the person. Often, the power of attorney is necessary while someone is still alive, and executor of will occurs only after their death.

Do you want to leave your children all your assets in equal shares? 

Do you want to leave anything for grandchildren or create a trust for education or marriages of children/ grandchildren/ great-grandchildren? 

Have you gifted any of your children or do you want to gift to any of your children anything while you are alive? 

Do you want to take this into account in the will? 

What are the chances that one of your children/ grandchildren will contest the will? 

Do you want to include an Inheritance Act clause in the will? 

An inheritance Act clause is a clause that says that a beneficiary’s entitlement under your estate is conditional on them not making a claim against the estate. It is a clause that is included in the hope that the beneficiary will think twice before alleging that reasonable financial provision has not been made and bringing a claim under the Inheritance (provisions for family and dependents) Act 1975, as they may risk their entitlement under the will. The clause however cannot prevent a claim from being made so some beneficiaries may still be willing to take that risk.

Do you want to put your estate into a trust? 

You have liquid and illiquid assets in your estate. How do you want to divide the estate up between the children taking into account illiquidity and potential tax events? 

Please note that transferring your home to a beneficiary who is a family member is almost completely tax-free in some jurisdictions, however, the beneficiary will inherit the tax exposure and will have to pay it when he/she sells the assets? 

Check the tax implications for children who are US citizens for US tax. 

Explore conditioning the transfer of assets to beneficiaries who have a financial agreement with their spouses/ life partners? 

This will ensure that if at any stage they part with their spouses/ life partners they will not have any claim to your gifts or inheritance. 


About the Author
Dan Dobry was the founder and a director of the GlobalNET Investment House, he was one of the founders of the Union of Financial Planners in Israel (UFPI) and served as the first Chairman and President of UFPI. Dan was the Global Council Representative for Israel for the Global Community (FPSB) from 2012 - 2018 and was a member of the Committee for Standards and Qualifications for the European Union (SQC) until December 2021.