Yesterday we revealed that potential changes to the inheritance law in France may mean that people who inherit expat-owned property in France will face significant tax bills in the future. One way around this is to carefully plan and a will that protects assets as far as possible. Perhaps the importance of writing a will is a factor that is commonly overlooked by many expatriates. If you’re living abroad for a short period of time then you may not think it is at all relevant to you, let’s face it, none of us are planning on dying anytime soon. The problem is, however, that you really do not know what the future may bring and it is crucial that you are prepared in the event that the unthinkable does happen.
If you’re living overseas and/or have assets abroad having a solid, legal will in place is all the more important. Different countries have different rules and this means that you need to do everything you can to ensure that your assets are given to the people you planned them to be distributed to. For example, if a married man dies in a country ruled by Shariah Law, all his assets will normally be transferred to his nearest living male relative, often leaving the wife and any female children with nothing.
Of course, no one likes to think about the potential that one day they may indeed shuffle off this mortal coil, but if there’s nothing that is as sure in life as death and taxes we have to face facts and prepare to avoid the taxes as far as possible.
Why all Expats Should Make a Will:
- On the most basic level it communicates what you want to happen with all your assets if you die.
- Failing to write a will ensures that your assets may be at the mercy of intestacy rules. These rules may not reflect how you envisaged the distribution of your money, home and even your children.
- Different countries have different rules. You need to ensure that you fully understand those rules and take every step that is legal and possible to avoid any that threaten to treat your estate in a fashion that you wouldn’t like.
- Having a will can help you to help your relatives to avoid unnecessary tax charges.
Where your will should be based
When you live overseas, things are certainly slightly more complicated; should you hold a will in your host country or home country? As a rule, it is advisable that you hold a will in each jurisdiction, especially if you have assets in both. The primary will should be made and administered in your home domicile, which is the country from which your passport was issued—however, there can be exceptions to this so you should always check with a qualified professional.
When compiling the will, you should ensure that the will meets the requirements of that country and will be legally accepted. For example, in a common law country such as the U.K., the will needs to be signed by a testator and two witnesses. However, in other parts of Europe, which use civil law systems, the will must be written by hand or drafted by a notary. Again, research is critical and you should always consider using the services of a professional in both countries to ensure that the will is legitimate.
7 Top Tips for Writing Your Expat Will
- Write it now and start the process immediately. There may be a whole host of complicated issues to address and the sooner you start the ball rolling, the better.
- Carefully research how the jurisdictions of both your host and home country will impact your wishes and take legal advice where possible.
- Consider creating a will in each jurisdiction in which you have assets. However, try and keep it all as simple as possible as you don’t want to unnecessarily complicate the probate process.
- Think about any individuals who may make a claim after your death and/or challenge your will. Cover yourself for this and ensure that, in the event that they do, your wishes are followed.
- Store your will safely and inform the planned executor where it is. If you wrote any other will prior to moving overseas ensure that it is destroyed.
- If you marry while you are living overseas you will need to completely rewrite your will as, generally speaking, a will becomes revoked upon marriage in most countries unless it contains information that specifically over-rides revocation.
- Think about tax. The tax rules of both your home and host country are of relevance and you need to take positive action to avoid paying huge amounts of tax. Thankfully, in many countries there are ways to plan your estate tax efficiently when making your Will – careful planning can reduce liability and in some cases even remove it completely.