MSV Life PLC hosts Estate Planning Seminar
MSV Life PLC recently hosted an Estate Planning Seminar to over 100 Intermediaries, Accountants, Lawyers and Notaries. In collaboration with Mr Mirko Rapa, PWC and Notary Dr Annalise Micallef, Micallef & Associates, the seminar discussed the fiscal implications of death and how the use of Wills, Trusts and Life Insurance products can help to resolve many of the issues encountered by heirs.
Mr David G Curmi, CEO of MSV Life PLC explained that MSV was proud to host such an exclusive event which brought together experts from their relevant fields to help explain the many costs and problems which may occur after death, as well as the advantages and disadvantages of the myriad of possible solutions. He explained that life insurance and savings contracts issued under the Insurance Business Act were often overlooked in their importance in Estate Planning and that the designation of a beneficiary under such contracts provided numerous advantages not found in other contracts.
Mr Rapa explained that on death heirs face an economic burden not just of the deceased’s debt obligations but also a liability in terms of the Stamp Duty payable on transfer of immovable property. After certain exemptions (e.g. transfer of main residence), heirs would have to pay Stamp Duty of effectively 5% on transfer of property and land, and 2% on transfer of company shares and interests in partnerships (rising to 5% if related to property).
Notary Dr Micallef then looked at the various uses of Wills and Trusts in Succession Planning, highlighting the need to prepare in advance in order to ensure your assets are passed to your heirs in accordance with your wishes. She explained the problems of dying intestate and the various instruments and techniques which could be employed during one’s lifetime to mitigate such issues.
Mr Stuart Fairbairn, Chief Officer Business Development, MSV Life then concluded the seminar by highlighting the main uses of life insurance products for Estate Planning and in particular the unique advantages of being able to designate a beneficiary to receive the proceeds. The most common use of life insurance is to provide a cash lump sum which can be used by the heirs for whatever purpose they require, for example paying the Stamp Duty obligations without having to sell any of the inherited assets.
Mr Fairbairn explained that the ability to designate a beneficiary was perhaps one of the most powerful tools, often overlooked in the Estate Planning process, since it enables assets to be transferred outside of the estate, bringing numerous advantages. The designation of a beneficiary enables the life insurance company to make an immediate payment of the benefits without having to wait for the Will to be confirmed or for any searches to be made. This provides the beneficiary with an immediate cash lump sum, providing essential liquidity where joint assets, including bank accounts have been frozen on death.
Unlike the transfer of assets to third parties or other vehicles during ones lifetime, the nomination of a beneficiary under a life insurance product enables the asset owner to maintain complete control over the asset until death, at which point it passes to the beneficiary.
Nominating a beneficiary supersedes any provision of a Will and means the benefits are not subject to the laws of succession.
Mr Fairbairn closed the seminar by confirming that one of the main uses of life insurance products in Estate Planning was through savings and investments products, which when structured correctly removed assets from the estate and provided heirs with the confidential disposal of liquid assets.