As the season has come to an end, players, agents and coaches begin to wind down for a period of vacations, relaxation and shut down. With the transfer windows opening, it can be a time of new opportunity, relocating and new career prospects for many sports professionals and players.
With the summer transfer window and the World Cup generating significant movement across the football industry, players, coaches and agents should take this opportunity to review not only their contractual arrangements, but their wills and estate plans. Changes in residence, earnings and asset ownership can all have important succession and estate planning implications.
Overseas Assets and Estate Planning Advice:
If you own overseas assets, it is essential that your Will properly covers them. Different countries have their own inheritance laws and tax rules, which can override your wishes if your estate is not structured correctly.
Players are relocating all over the world as new opportunities arise, which means that your estate becomes a cross-border estate. This raises complications such as local inheritance tax laws applying to your estate, forced heirship may apply and your current UK will may not be valid in each jurisdiction. The risks are that your loved ones lose out on their inheritance and assets are diverted to distant relatives with no asset protection or retention of control in place on your death.
When working with sports professionals, we advise them to consider setting up a Will that covers overseas assets. At Vault we can prepare bespoke wills and trusts that do not conflict with overseas IHT and succession laws to make sure you have peace of mind and that no matter where you relocate, your wealth is protected.
The typical issues covered include:
- Ensuring property overseas passes to your intended beneficiaries
- Explaining the probate and estate administration process properly to you
- Advice on Inheritance tax implications and domicile advice / reports
- Implementing strategies to avoid overseas disputes on inheritance
For this reason, managing a Will for foreign assets often requires legal expertise in the country where the assets are located. Your solicitor can help coordinate advice to ensure your estate is structured appropriately across jurisdictions.
Tax and Overseas Assets:
Double taxation agreements and exemptions for foreign assets exist and help to minimise the burden for those individuals who have international assets. The agreements prevent double taxation in both jurisdictions on the same assets, ultimately relieving the burden through a tax credit or exemption. We work with specialist accountants who are experts in sports, media and entertainment clients that can advise you on these treaties in more detail. Our part is to assist with advising you on strategies, such as trusts, ownership structures or family investment companies to utilise the tools you have available to you.
Transfer Window and a window for opportunity:
Wealth generated in the world of sport and entertainment can present particular challenges (such as multi-jurisdictional asset-bases, image rights, and confidentiality concerns). Those individuals that take up this opportunity to consider what would happen to their wealth in the event of their death, are those that preserve as much wealth as possible for their loved ones. It is important for this transfer window to create opportunity to reflect and review what the future looks like and how best individuals can change their lifestyle, whilst preserving and maintaining control and ownership of assets in the most tax efficient way.
Why is it so important for sports professionals to put a Will in place?
Wills cover more than just what happens on death to your ‘money’ as some may think and they are more influential or relevant than just needing one when you think your are ‘going to die soon’.
A Will is about protection. By putting a Will in place, an individual can prevent, protect and provide for their loved ones in a way that avoids disputes, cost, legal interference and helps to create efficiency post-death. It is not uncommon for sports professionals to die intestate, leaving their partners (mostly unmarried) and minor children with no course of action, protection or means to survive or maintain their standard of living. For example, the case of Baldock who amassed a £5m fortune and left his partner with nothing and his minor child the fortune. Another famous example is Liam Payne, leaving his son with over £23m outright under the rules of intestacy.
The consequences of not doing a Will or advising your clients to take advice from a professional to do one can be catastrophic. We are here to advise on the flexible structures for wills, such as the use of life interest trusts, discretionary trusts and declarations of trust to ensure a fair, balanced and sustainable plan for the future.
What about your own Will?
As nations prepare their squads for the World Cup, individuals and families should also consider whether their own long-term plans are match ready. Reviewing your will and estate plan can help ensure your wishes are carried out when it matters most.
Whether you are a sports professional, a player, an agent, coach or an advisor it is crucial to be raising the topic of succession in your conversations with the players to make sure they are protected not just on the pitch, but for the future.
If you do wish to discuss putting a will in place or advice about succession and estate planning, please do not hesitate to contact us at [email protected]
