Drawing up a will
Drawing up a will remains the traditional option to avoid the distribution determined by the law. Indeed, this tool allows you to decide what you want to bequeath and to whom. It may thus be your childhood friend, your neighbour or your godchild. Yet, when it comes to taxes, the will is not considered the ultimate solution as inheritance taxes are relatively high when you bequeath something to someone that has no family relationship with you: they may reach 80%, depending on the amount that you bequeath and the region you live in! However, you still have other options available.
Please note that inheritance taxes for "strangers” vary between 40 and 80% in Brussels, between 30 and 80% in Wallonia and between 25 and 55% in Flanders.
Making a donation
As for taxes, a donation is much more interesting. Indeed, the taxes on movable assets range from 5.5% in Wallonia to 7% in Flanders and Brussels. Furthermore, they are not graduated. For immovable assets, taxes are certainly higher (from 10 to 40%) but remain far below inheritance taxes. What is more, a donation has one extra advantage: it allows you to give a “small boost” to the person you choose, whatever the moment! Indeed, if you bequeath something using a will, the person will only inherit after your decease. Nevertheless, if you wish to help your goddaughter who just graduated to start her “after-school life”, a donation seems to be a great option, as she will benefit from it right away. Yet, keep in mind that a donation is not revocable, as opposed to a will. Therefore, you should really think deeply about your decision, but also keep enough money to secure your own future.
Opting for the "dual legacy"
As the name states, the “dual legacy” is a mechanism that allows you to bequeath parts of your estate to two persons at the same time : the person you choose on the one side and a charity on the other. The charity then bears the inheritance taxes on what you bequeathed it, but also on what you bequeathed to the other person. Indeed, charities benefit from lower inheritance texes. It is a win-win situation, both for the charity and for the other person! But of course, you should make sure that the amount you give to the charity is sufficient for it to accept to pay the inheritance taxes.
Please note that as of the 1st of July 2021, in Flanders, this mechanism will no longer exist. Indeed, the Flemish government felt that it led to too many abuses and that the primary motivation for its use was not to make a philanthropic move but rather to avoid paying too many taxes. Nonetheless, to make up for the end of the dual legacy, new mechanisms should be created. First of all, the “vrienden erfenis” or “friend’s legacy”. It will allow bequeathing parts of one’s estate to a friend (or a distant relative) while applying inheritance taxes for direct relatives - 3% - on an amount that cannot exceed 15,000€. As for charities, they will be able to receive donations or legacies with a 0% tax. But please wait before you decide to opt for one of those options as further explanations still need to be provided!
You may thus be reassured: even if you do not have close relatives, your estate will not necessarily be distributed as the law stipulates. As it is often the case, the key here is anticipation! If you have any question or need advice, do not hesitate to contact our team, who will take time to discuss your wishes, to provide you with information regarding the procedures and to assist you in realising them!