PLANNING FOR TAXATION AND OTHER CONCERNS.To plan is part of the human condition, and we need to start today in order to free ourselves and not worry tomorrow. To accomplish this objective, we need to engage in what is nowadays called patrimonial PATRIMONIAL. A thing, which comes from the father, and by extension, from the mother or other ancestor. planning (PP). PP consists of investment, tax and estate planning Estate Planning The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death. Notes: Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the . Easy to say? Perhaps. Easy to do? Surely not alone. But with the assistance of specialists, modern banks provide selected clients with these kinds of services. Currently, the keen observer can find certain trends spreading throughout Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . One of them is related to dollarization dol·lar·i·za·tion n. The replacement of a country's system of currency with U.S. dollars. , in which a country's currency is pegged with the strongest currency in the world, the U.S. dollar. Argentina paved the way in 1991, tying the peso to the dollar (one to one). It was followed last year by Ecuador, which eliminated its own currency and adopted the dollar as its own. El Salvador El Salvador (ĕl sälväthōr`), officially Republic of El Salvador, republic (2005 est. pop. 6,705,000), 8,260 sq mi (21,393 sq km), Central America. has recently started this process, and it is not expected to end there. Another trend is related to taxes. Most countries in the region have huge external debts and are spending more than they are aide to collect. This is partially because of inefficient controls, and a common and easy method of bridging the shortfall is to increase tax rates. Some countries, fueled by the IMF IMF See: International Monetary Fund IMF See International Monetary Fund (IMF). , have emulated the United States by taxing the worldwide income of its residents. Argentina followed in 1992, Mexico in 1996 and Venezuela in 1999. We can expect this trend to spread across the continent. In addition, the wealth tax, estate tax and probate court proceedings (long and costly) create a heavy burden on private investors and their families in many countries. Other recent phenomena, such as the OECD OECD: see Organization for Economic Cooperation and Development. list of harmful tax practices in off-shore jurisdictions and the U.S. taxation rules known as "qualified intermediary," make our region quite a complex one. All of these issues should motivate high net worth individuals to set up a variety of sophisticated legal structures. This is the only way today to achieve "no worry" status. Pablo Aimo is vice president, regional trust and estate planning/Latin America, ABN AMRO Bank-Miami. |
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