Future-proof your offshore investment

WHEN YOU DIE: WHAT HAPPENS TO YOUR INVESTMENT?

The biggest risk is a lack of planning.

There’s a huge variety of offshore investment opportunities that enable you to grow wealth using a vehicle that suits your income and lifestyle. In the event of your death, these investments are a legacy for your family. To make the most of your investment, you must make a few responsible decisions from the outset.

When selecting offshore investments, you can choose between listed or unlisted equities, fixed income, or property or cash investments, depending on your risk appetite. For example, listed equities are always a good option as they’re liquid and priced daily, while fixed income investments include bonds issued by government, corporates or banks, as well as money market products (short-term debt instruments).

Before investing, research and understand the different kinds of offshore investments and what they’d mean for you.

Your investment’s tax implications are an important consideration. Offshore property investments, for example, may have certain tax conditions in the country you’re investing in. For many investments, tax is only applied in the country where the money and its growth resides. But it’s important to understand the laws of different countries to avoid being taxed twice.

Tax on offshore assets becomes critical when you die, as your loved ones may wish to bring the money back into the country as part of your local estate. Remove uncertainty by getting professional advice. A knowledgeable tax consultant can help in making your offshore investment and overall estate tax efficient. This doesn’t mean avoiding tax, but ensuring your investments are structured most tax efficiently.

The biggest risk to your offshore investment after your demise – is a lack of planning. Unfortunately, when it comes to estate planning, people’s affairs are often not in order or kept recent. Millions of investments often go unclaimed because investors don’t plan for the worst-case scenario. There’s no need for this: future-proofing your offshore investments is very simple.

Become diligent about documentation from the moment you invest offshore. Record and save every correspondence and detail about your investment in one place. Document what the investment is and provide clear contact details on who needs to be contacted in the event of your death. Many of us aren’t good at administration – hire someone to do it for you! Commit to the process; it doesn’t have to be expensive or complicated – anybody can do it themselves under the Master of the Supreme Court’s guidance.

To secure your offshore investment for the future, the best advice is to imagine what it would be like if it were you consolidating your estate. What information would you want to be in the envelope? What processes would you wish were in place? When planned correctly, an offshore investment is a powerful vehicle to create lasting wealth, even when you pass away.

Jo-Anne Bailey is Franklin Templeton Investments’ sales director and country manager for Africa.