Key points for a successful handover

Are you wondering what will happen to your assets when you are no longer able to manage them? An extrajudicial mandate provides a solution to this concern. Also referred to as extrajudicial protection, this arrangement allows you to plan ahead for a potential loss of capacity.

Let us take an example. A Belgian resident becomes unable to manage their wealth due to deteriorating health. Without an extrajudicial mandate, the justice of the peace may appoint one or more persons to administer the assets and oversee the individual’s interests. By contrast, if a mandate has been put in place, the trusted person(s) chosen in advance (children or third parties) can assume this role. The mandate has no effect as long as the individual remains capable. If the person later relocates to Luxembourg or France before becoming incapacitated, the extrajudicial mandate would remain applicable in those countries.

Plan your estate carefully, especially if your children decide to move abroad. Tax laws can vary considerably from one country to another and affect how assets are transferred and taxed.

Let’s imagine that you have taken the initiative to work with your solicitor to structure your assets through a simple Belgian company. You have transferred your movable assets into this company, which generates a regular income for you (for instance, via a usufruct arrangement). You are the manager and have already transferred the bare ownership of your shares to your children. But what will happen if one of your children moves their residence to France? What will be the implications of this structure for a French resident, and how will it be treated for tax purposes? These questions are all the more crucial given that France does not recognise this type of company.

It is essential to review your estate situation regularly in order to adapt to changes. These may include sales, purchases, investments, assets acquired abroad, or changes to tax and civil law. Personal and family events can be just as important triggers for reassessment.

Let’s consider the following example. You marry in Belgium without a marriage contract and are subject to the Belgian legal regime. With your notary, you draft a will and plan to protect the surviving spouse by bequeathing the available portion. However, your children live in the Grand Duchy of Luxembourg for professional reasons. If, upon retirement, you move to Luxembourg to be closer to your children, your matrimonial property regime—and therefore the effectiveness of your arrangements to protect your spouse—may be impacted. This is precisely why periodic reviews are essential.

Luxembourg life insurance can be a flexible tool to diversify your portfolio and build long-term savings, while also allowing you to designate beneficiaries and benefit from death cover. Particular care should be given to the beneficiary clause: it may be drafted on a named basis or in generic terms, and it should be reviewed whenever your family situation changes. An outdated or poorly drafted clause can create disputes among heirs and lead to unfavourable tax outcomes. In practice, consider updating the clause following events such as marriage, divorce or the birth of a child, and seek regular advice from a wealth management adviser to ensure it remains compliant and appropriately tax-efficient.

Where appropriate, involve specialist advisers and revisit your plan to ensure it remains relevant as your circumstances and the legal and tax environment evolve. It is equally important to prepare the next generation: open discussions about intentions, governance and roles—combined, if needed, with financial education—can reduce the risk of misunderstandings and support a smooth, long-term transition.