It was late one night when this thought would not leave my mind. I had been reading about inheritance and gift taxes lately — not exactly bedtime reading — but the more I read, the more I got interested. And quickly I figured out that I need to look into estate planning, so my family doesn’t have to face difficulties when I am not there anymore.
In the Netherlands, for example, if you leave a part of your wealth to relatives outside your closest circle (i.e. parents or siblings) or friends, they may face inheritance taxes of 30% to 40%, depending on the value and relationship. Partners and children, however, face much lower burdens because of higher exemptions.
That did not sit right with me. Supporting someone you love, or someone who supported you, should not be treated as a penalty. It should be recognised as an act of connection, care and gratitude.
That thought stayed with me all night. It turned into curiosity, and that curiosity led me to explore Family Trusts and broader legacy planning as a way to help people manage and pass on what they have built with intention.
🌍 Inheritance Tax in Europe: How Systems Differ
When I compared systems across Europe, the differences were striking.
Countries with higher tax burdens
- Belgium – In the Brussels Capital Region, relatives and non-direct heirs can face inheritance tax rates up to 65% or more, while direct heirs pay much less.
- Germany – Tax classes are based on relationship. Non-immediate heirs such as siblings, friends, or nieces and nephews fall into higher tax classes, with small exemptions of about €20,000 and rates that can reach 43%.
Countries with lower or simpler tax burdens
- Ireland – The Capital Acquisitions Tax is a flat 33% on inheritances and gifts above certain thresholds, making it simpler and often less burdensome.
- Spain – National rates range from about 7.65% to 34%, but many regions, such as Madrid, offer generous reductions where some families pay little or no inheritance tax at all.
These examples show how uneven inheritance systems are. In some countries, passing on wealth or support feels encouraged. In others, it feels like a financial burden.
🧐 Why Estate Planning Matters More Than Ever
This reflection made me think about something bigger — the housing crisis that impacts so many people across Europe.
Buying a home today as a first-time buyer feels almost impossible in many cities. Prices have grown faster than wages, mortgage conditions are tougher and opportunities are shrinking for young people.
Our homes and savings may be all we have to pass on. In a world where housing is increasingly unaffordable, estate planning has become more important than ever.
It is no longer just about protecting wealth. It is about creating stability and opportunity for others. It is about fairness, continuity and supporting what matters most long after we are gone.
🏦 What A Family Trust Is And Why It Matters
A Family Trust is not a tax loophole. It is a structure that defines how your assets are held, managed and eventually used.
It helps you:
- transfer wealth gradually instead of all at once;
- protect family assets from disputes or risk;
- support parents, children, siblings, friends or causes you care about;
- create continuity so your legacy does not depend on one lifetime.
Most importantly, it brings peace of mind. It transforms what could be a stressful financial process into an act of care, planning and foresight.
🙇♂️ Key Lessons About Estate Planning
You do not need to be very wealthy to think about legacy. For many families, estate planning becomes relevant already from €250,000 in total assets — a home, savings and some investments. The true value lies not just in paying less tax. It lies in clarity, stability and the ability to support others without confusion or loss.
My key learning from this is that legacy is not built at the end of life, but in the choices we make while living it.
😌 Building A Fair And Lasting Legacy
A Family Trust is not about avoiding tax. It is about building a thoughtful, fair and lasting legacy. Because wealth should connect generations, friends and communities — not divide them.
With rising housing costs and shrinking opportunities, estate planning has become one of the most meaningful and responsible acts of care we can take. If you have significant wealth, property or complex assets, seek guidance from a qualified estate planner or tax advisor. The right structure can protect what you have built and ensure it continues to provide security and opportunity for others long after you are gone.
Love it. Was thinking about this for so many months
Thanks Aakash, happy you liked it. And I definitely recommend you to gain more knowledge on this. All the best!😄
Thanks Shah! Absolutely relevant topic. Do you mind elaborating your assumptions leading to 250k threshold for the relevance of setting up the trust? We are in similar thought process and trying to establish basic facts. Thanks
Thanks Daven, appreciate it!
The € 250.000 comes from a conversation I have had in the past with a colleague who used to work in Financial Planning. Apparently, it’s common practise to use this amount as a benchmark, as from this point it becomes “interesting” from a cost point of view and the administrative responsibilities that come with a Family Trust.
If you own an apartment, even outside the urban areas, you would easily cross this practical benchmark in Europe and could consider opening a Family Trust. And moving your assets gradually to your loved ones would eventually end up in tax savings, which will probably outweigh the associated cost.
Hope this helps, all the best!😄