With recent deaths and serious illnesses of loved ones, I started to ponder my own mortality and how to provide security for my kids over the medium term.
1. Ensure that there is a decent pot for them if I were to croak in the next few years though savings and insurance
2. How to protect that from IHT as well as reasonable
A number of options are available. Some a bit involved: trusts, family income companies.
Others are possible and a little restrictive: AIM companies.
One option I thought of which I never heard anyone talk about before: open an IB account in name of kids, gift them money there, allow money to grow over time. I believe wealth is still taxable on me, but it will be out of the IHT net.
Anyone done this? Not sure if IB even allows accounts for under 18s, but I wrote them a message today.
Assuming the death/inheritance is subject to swiss law and person has contributed to swiss pensions over the years, I think a lot is automatic. Yes, you can wiggle with the percentages, but kids cannot really be dis-inherited and there are built in survivor benefits for minors in the pension system. I guess there is more to consider if foreign assets subject to other jurisdiction inheritance or tax laws.
We have additional death insurance for this reason as I want enough money for the kids to get to 25ish and be able to study etc.
One project I have on my list is to do a "death binder" with all the important info so that if I and DH were to die together in an accident, the kids at least know where stuff is, money but also for example photos etc.
Money is one thing but making it easy for whoever survives you is also important in IMHO.
I saw that I could open a bank account at UBS, but having cash stuck there is a bit pointless. I'd rather be able to open accounts for the kids and have the investments grow there until they are older to take charge of it.
My parents have done this and store the information in unlocked fireproof boxes that are stored in their house. My mom made sure I was aware of their existence and location the last time I was home.
Apart from finances, have you nominated someone who would adopt or take in your kids in case of your demise.
We are nominated for our Grand-children. And when our kids were young, we had an arrangement with OH's brother that we would take each others' kids, if and when.
They had 3 daughters, and us 2- all separated by 1 year - and everytime we got together for a week-end, etc- it was so noisy and pandemonium- we used to say 'for God's sake, drive carefully!'. It was however really reassuring that they had a crazy family awaiting should be meet with our maker earlier than expected.
Other than money etc. we leave behind, we also have an account with Avadis for each child which we use to invest the CHF 200 / month Kinderzulage . The account is in their name and automatically becomes available to them when they reach the age of 18. The drawback is that you, as a parent, can only withdraw the money to send to another account in the same name.
We had a family member agree to take the kids should anything happen. Get that in writing and a person in CH as well to temporarily take them and put this and in your will as the CH authorities may put kids in care.
We did the UBS kids accounts when they were small then teens accounts with a card and app access so they can see and control their own finances. Birthday/xmas money from family goes in there with comments who it was a gift from.
Nothing else is in the kid's names but assets will transfer to them 50/50. Trusts are more common if you do a job that you could be potentially sued in and use it to protect your assets (doctor ect) but even school teachers can wind up being sued these days.
We had a big sum of money in IB until we bought another home. They were terrible when we tried to get it back out a year or so later and we needed to re-verify our identity. I would dread to know the steps to identity verify now grown up kids.
I did have a bank account in my name in trust until I was 18. I could invest it in term deposits ect but not withdraw until I was 18+.
Additing to the will would do it. Name and adddress of carer should anything happen. We had agreement via email and printed it out and kept with the will.
My understanding from helping a friend deal with KESB and guardianship issues - and please, correct me if I am wrong! - is that on the death of the parents KESB needs to approve guardianship. In many cases it will simply be a rubber stamp following the wishes of the parents, assuming the parents have put those wishes in writing.
However, if there is a dispute (for instance, parents name a trusted friend to take guardianship but a relative wants the role) KESB can be called into mediate, and the outcome could be anybody’s guess.
If you are concerned or anticipate that someone might not be happy with your choice, best to run the guardianship issue by a Swiss lawyer, make sure your nomination follows whatever format is most legally sound.
For those who are named as guardians of a child who is not in Switzerland, be aware that the guardian relationship likely will not allow the child to move to Switzerland to live with you. For this reason, my US based sibs split the guardianship. We were named financial guardians, while the children would have lived in the US with a friend of theirs as custodial guardian.
Hopefully none of this will ever be needed, but this is one of the necessary ‘what ifs’ to be addressed.
A bank will do this and will invest the money for you and I am 99% the accounts are excluded from your wealth tax and the dividends are not taxable until the children turn 18. you do need to report the accounts in your tax declaration. of course the money is also locked in until they are 18.
whether the returns are good or not is a different topic. you can choose the different investment plans and can go conservative or aggressive in terms of risk profile.
I guess it can depend on the amount of money you withdraw, as well as cross-border issues. Large amounts can be subject to anti-money laundering red tape.