Protection, Accumulation and Distribution
An efficient inheritance planning framework involves three basic concepts: protection, accumulation and distribution. To be clear, I usually draw a pyramid and make an analogy with building a house. It is necessary to start with the foundation for the entire structure to stand. If the foundation is weak, severe problems may occur with the final construction project.
​
Those who can organize these three pillars in family and business are one step ahead of achieving long-term financial success.
Protection
Protection is at the base of the pyramid and should be seen as everything that can go wrong in life, like a premature death, a disability, an accidents, an unexpected major medical issue and any other problems along the way. In this layer of the pyramid, we are concerned with creating all of the insurance structures for the problems mentioned above, in case the worst happens, including the testamentary issue, which is normally not in the plans of the Brazilian community.
Accumulation
The layer at the center of the pyramid, where the word accumulation is found, refers to the period of life that begins with entering the job market and will only end on the day we retire. In this part of the pyramid, everything related to asset accumulation will be here, such as investments in fixed and variable income, various types of investments, real estate, personal and commercial structures, opening and growing a business, etc. In this layer, each person will have a different profile for choosing the most appropriate investments as part of their overall planning strategies.
Distribution
Finally, at the top of the pyramid is the distribution. The American population's main concern is to make sure that he or she will not outlive his or her money accumulated over a lifetime. That their plan will sustain him / her until the last day on planet earth. At this stage of planning, the focus is obviously no longer on accumulating equity, but on having a profitability that sustains it. It is the stage in which the patrimonial legacy is foreseen, where assets not used while alive can be transferred to its beneficiaries in the most effective way possible, within the parameters of the law.