Inheritances in Argentina and ways to prevent leaving a legacy of problems to your family

Inheritances in Argentina and ways to prevent leaving a legacy of problems to your family


Being constantly worried about providing a good quality of life for your loved ones, you usually tend to postpone many fundamental decisions, which may have mid and long-term financial effects. You should begin by asking yourself if your assets are protected from an unexpected event. Then, are your pension contributions in order?, have you taken out life insurance so that your beneficiaries do not have to face debts? And most importantly, have you planned the terms of your inheritance? These are just some of the questions that are worth reflecting on and acting on in advance.


Protecting the Family Assets: Tax Aspects


In Buenos Aires Entre Ríos, an inheritance tax applies to the free transfer of assets, that is, the enrichment by free transfer of inheritances, legacies, donations, and advances on inheritance or any other event that implies an increase in wealth. Only those who inherit a property valued up to $ 100,000 and intended as a single family-residence are exempt. In addition, in Buenos Aires, this tax covers the property located in its territory and/or the beneficiaries (individuals or legal entities) domiciled there.

As regards tax matters, inheritances are taxed on the estate, which consists of real estate, registrable movable property and the equivalent of 10% of the two previous items as non-registrable movable and other property. By means of a sworn statement of the assets, which should include the real estate, registrable and non-registrable movable property, is taken into account by the corresponding court authority as the taxable base to calculate the costs of the succession process. These costs include the court fee, lawyers’ fees, contribution to the court fee, social security contributions on the fees, and inheritance tax up to 23%. An example: if you were the only heir of a family estate valued at $ 1.5 million, the costs for the succession process carried out in the province of Buenos Aires would be 22.76 %, that is, $341,456, which could have been kept with a simple succession planning.


The Cost of Not Planning a Succession

Succession is a legal process and planning for it can certainly save you time and money. A simple succession procedure takes at least 6 months. In general, the cost to cover the related expenses amounts to more than 20 percent of the inheritance. In general, successions may be accepted with benefit of inventory. This means that the heirs will only be liable for the debts acquired by the deceased up to the concurrence of the inherited assets, i.e. up to the value of the latter. Therefore, they may renounce an inheritance if the debts received exceed the bequest net worth.


Effective Alternatives to Probate Proceedings


In principle, there are three alternatives to probate proceedings. First, the provision and use (during life) of donation contracts with or without reservation of lifetime usufruct. Second, donation with a charge of lifetime income. Last, the transfer of assets related to other rights in contracts, onerous or free assignment of shares and company shares, assignment of rights and inheritance shares on different types of assets or trusts, among others.


If you own a company with other partners, it is essential to obtain corporate insurance. For example, in the event of death or total disability, an heir should be accepted in place of the deceased/disabled partner. Otherwise, the surviving partners may buy that part of the partnership, either by applying company funds or their own resources.


On the other hand, if the heirs agree to sell their shares, the partners would have the option of buying them either by withdrawing money from the company or by selling key assets. In other words, corporate life insurance involves joint policies, with cross-insurance between the policyholders. Thus, in the event of one’s death, the partners designated as beneficiaries will receive the insured sum, sufficient to purchase the deceased’s share.

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