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Banque de Luxembourg recently discussed the human aspects of estate planning in Belgium's daily newspaper, L’Echo. Read Philippe Depoorter's take on this issue in this article by Muriel Michel.

Your parents have a comfortable lifestyle, a house, healthy bank accounts and perhaps even a second home. But so far, they have not discussed their estate planning with you. Without necessarily being “self-seeking”, you still have some niggling questions to ask them. But how? When? It's not easy!

Eight out of 10 Belgians have yet to arrange their estate transfer. And not all families have the same level of sensitivity or open-mindedness to start a conversation on the subject. Making arrangements to pass on your estate or pass on certain assets while you are still alive is a complicated process. It means considering the consequences of your death for your spouse, your children and perhaps even your business. But having an open discussion can also offer the opportunity to convey your wishes (cremation, organ donation, etc). Still, it can be heavy going and you need to be prepared. “Donors are confronted with their finiteness. They have to prepare a list of their assets and distinguish between equality and fairness,” explains Philippe Depoorter, a Banque de Luxembourg Management Committee member, who helps families arrange their estate transfers.

Another challenge, he says, is that “the person on the receiving end does not necessarily see things in the same way or have the same outlook.” It is important to consider the legitimate aspirations of both parties, which may result in very different perceptions of the situation. Furthermore, “estate transfer creates a debt and a relationship of loyalty in the head of the beneficiary, plus the question: how am I going to ‘repay’ this?” In this respect, “a good will is written by the person who is giving and the person who is receiving.” Each of the parties must be able to do whatever they want with the gift and inheritance, knowing that the other party will understand. But of course, understanding doesn't always mean accepting.

Finances, identity and symbolism

When it comes to having the conversation, the experts agree: it falls to the parents to take the initiative. But that is not always forthcoming. “I think that right up to the end, parents do whatever they want with their money,” says notary Gaétan Bleeckx. “Even squander it, which they have every right to do. It's tricky. We're not supposed to expect anything or push them on the subject.”

“It's extremely difficult for children to ask their parents for money,” says Philippe Depoorter. “It’s up to the parents to create conditions that can address needs as they arise. And it's essential that each child be given the same information. There are actually three factors involved in estate transfers: finances, identity and symbolism. A family is a system in which you exist relative to others and according to how others see you. That said, there's no point in striving for absolute equality since there is no such thing. On the other hand, when it comes to sharing and discussing the concept of fairness, this is the parents’ role. If choices are neither offered nor explained and the children don't discover them until after their parents’ death, or they have had no say in them, "they will automatically imagine all sorts of things, get the wrong idea and subconsciously start to wonder, what did I mean to them if they gave me this rather than that? This destructive process can be avoided if everyone talks about it together ahead of time.”


Communication provides reassurance that family members understand why certain decisions have been made. All the scenarios can be laid out on the table. Some will require a more complex family dynamic. In particular, the question (or mistrust) of “non-blood relations” needs to be addressed. “We are entitled to set rules for ourselves in this regard. What matters is that everyone knows what they are, even if they are not necessarily accepted or shared straight away,” says Philippe Depoorter.

“It’s crucial to respect everyone's situation and feelings,” says his colleague Olivier Nyrinck. “Above all, you mustn’t force the hand of someone who is afraid that by giving they will be left with nothing. Self-interested children who corner their parents do more harm than good.” While some people might fear that the family assets are in danger, "the notary can explain that you can still gift your assets without stripping yourself of everything if you just introduce safeguards – gifts that carry obligations, usufruct or annuity payments.”

Tangible and intangible assets

Philippe Depoorter furthermore makes a distinction between tangible and intangible assets (history, value, networks, know-how and reputation): “all the things that can't be given a direct value but without which tangible assets could not have been created. And while the transfer of intangible assets can be simple, appropriate and desirable, because it appeals to a sense of belonging, passing on material assets has implications and so is more tricky.

“If possible you should avoid reducing an inheritance to a pile of money slapped on the table. That's why it’s important to include the intangible, peace-keeping aspect,” he advises. That way, you continue to share an ethos or moral legacy and then keep it going as part of a project. “For instance, heirs of very wealthy families may decide to create a special joint fund or budget to support a business project or specific undertaking. Discussing it creates and maintains a bond.”

Home, car, savings

“For most people,” says notary Gaétan Bleeckx, “the family estate comprises the home, a car and some savings. Full stop.” Even if meticulous estate planning seems unnecessary because the situation is straightforward, the estate must still be shared fairly. This goes beyond simple arithmetic and tax calculations. Maybe someone's wishes have been overlooked; maybe simple arrangements would suit everyone. But there again, you are just going around in circles, because if you haven't broached the subject, how do you know?

“An elegant way of dealing with this often arises when the family home is up for sale because it has become too big and the parents are thinking about buying an apartment. This is an ideal time to divide up the new property: the parents buy beneficial ownership and the children buy bare ownership with the money the parents have already gifted to them by deed (subject to payment of a 3% gift tax). At 70 or 75, parents typically want options that allow them to pay the least amount of tax on their estate. According to Gaétan Bleeckx, this one step takes care of most of the transfer.

The banker's advisory role

“Banks frequently get involved in estate planning,” says Gaétan Bleeckx. “A banker has the benefit of a full overview of customers' accounts and will typically contact them to suggest a tax-effective strategy if he sees that their assets are stagnating. Especially after a certain age...”




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