Only the most foolhardy traveller would leave home without insurance. Should anything go wrong, there’s a safety net there to catch anyone who falls victim to illness, injury, crime or misfortune.
Insurance policies can guarantee speedy medical assistance, replacement of lost or stolen items and even a swift return home. We all know that should the unforeseen happen, insurance is the best policy.But what about when the worst happens? The Foreign and Commonwealth Office (FCO) estimates that 4,000 British citizens will die each year whilst abroad. The majority of these tragic deaths will be holidaymakers, but expats are equally at risk from the most common causes of death.
The US State Department lists vehicle accidents as claiming the most lives of Americans overseas, followed by homicide, suicide and sporting accidents. As well as facing the same risks as holidaymakers, long-term residents of foreign countries face greater exposure to endemic diseases, wildlife, political unrest and natural disasters. A thorough insurance policy can help should you be injured by any of these factors, or it can help your loved ones bring home your body should you die overseas.
The death of a loved one is always traumatic for those left behind; even more so if they have to contend with the complexities of funeral arrangements and disposing of assets from the other side of the world. This is all the more stressful if there have been no clear instructions left behind.
It’s estimated that two thirds of British citizens do not have a last will and testament listing their assets and their wishes about what should happen in the event of their death. Sadly for expats, this means that their assets are at the whim of local customs. In some countries this means ownership of property, cash and liability for any debts will be dealt with under local law. On top of the grief your family feels at your death, they may simultaneously be hit with hefty tax bills and lose the right to inherit any assets.
This is not the kind of extra stress anyone wants to deal with while grieving. An effectively written will and a well-managed estate can make this upsetting time easier for everyone to handle.
As with most things in expat life, writing a will is more complicated than for non-expats, so we’ve taken a look at some things you should consider when writing yours.
Know what makes your will legally binding
In some countries it is surprisingly easy to write a will; you can literally sit down with a biro and a beer mat to create a legally binding document. In others, the document must be ratified by local officials before it is legally binding.
Write-your-own packs can be bought in stationers’ shops or ordered online, and there’s a growing market for websites that offer will advice clinics. As easy as it is to produce a document through these methods, the end result may be inadmissible in your country of residence or home country.
Expats face having to contend with the legal requirements of the country in which they live, the one in which their relatives reside and the country in which they hold any assets.
Know who can inherit under local law
In some countries women may still have limited rights to inherit property or assets. In the United Arab Emirates, Shari’a law applies unless a legally recognised will is presented, which can mean that wives and daughters lose out. They may also be barred from acting as executors or taking power of attorney.
In the UAE especially, it’s not uncommon for expats to request that the laws of their home country to be applied to their assets. Look into how to enact Domicile Home Country laws on your dealings, making sure that female relatives will receive the same rights as they would in your home country.
Know your inheritance tax liability
This can be very complicated. Many countries have treaties that prevent expat citizens from paying tax in both countries. However, details vary wildly depending on the countries involved. It may be that your rate of inheritance tax and death duties are paid depending on where you spent time over the last few years or where your assets were registered.
If handled badly your relatives could find that two governments take their share of your wealth, leaving very little to cover outstanding debts and even less for themselves.
Talk it over
It’s not easy to talk about death. It’s upsetting to consider what will happen when a loved one passes, but it’s important to discuss your wishes with loved ones.
Not only will they understand why you made certain choices, but they can also make a few suggestions. They may have sentimental value attached to items you regard as junk; they may take comfort in taking possession of these items after your death so you can plan for this.
Try to stay positive, making sure you have planned out what is to happen should you pass away, that they will be cared for and that the complexities of funerals and taxes have all been worked out.
Detail all your assets
Don’t just stick to the big assets. Your house, care and savings might be the most valuable assets in your possession, but the combined values of smaller items might outstrip them all.
Think carefully about what family heirlooms to pass on and what may end up in a junk shop. Name someone who is going to look after these objects as you would like.
Think also about business assets and liabilities that may affect your personal finances, and detail what is supposed to happen to them.
Try not to leave any surprises for your relatives. As exciting as it may be for them to suddenly discover a priceless diamond in your effects, the arguments that follow about how it should be split can destroy even the happiest of families.
Think of your children
When talking about wills, it’s all too easy to get caught up in the nuts and bolts of financial advice, managing assets and worrying about tax policies.
But it’s important to remember that those left behind may face an uncertain future in a foreign country, especially if they are young children.
In many countries guardianship of children or those dependant on you for care will automatically transfer to the nearest living relative, but this is not true everywhere. Specify in your will that your spouse or partner is to continue caring for your youngsters in the event of your death.
Consider also a few ‘what if’ scenarios. You and your partner could be killed in the same incident, so have a back-up person lined up to take care of your kids. Whether they are family, godparents or close friends depends entirely on your own preferences, but talk this over with all concerned and investigate the legal implications of each scenario.
Seek expert expat advice
Anywhere with a large expat community will have solicitors well-versed in handling the affairs of expats both in life and death. After drawing up your will, get them to inspect it.
You may have to splash out a small amount for this service, but they will quickly be able to flag up any issues. You may find that assets you hold are subject to hefty taxes upon death so gifting them to a favoured niece or nephew isn’t as generous as you first thought. A poorly written will can cost up to 10% of the assets it lists.
They will also be able to advise you about how to contend with local fees and taxes. Sadly, dying can be an expensive activity and unless handled smartly, your family may be hit with a raft of charges. A good solicitor will manage these at both ends to ensure everyone gets the most generous deal and that costs are covered from your estate rather than a loved one’s pocket.
Some citizens’ advice services, life insurance companies or consumer groups such as SAGA or Which? offer will advice clinics, which may be helpful. Just be sure to explain your expat circumstances.
Make sure you keep your will up to date
Although this article is focused on what happens in the event of your death, it’s important to remember that everything that goes on in life will impact on your will.
We measure lives in milestones like birth, coming of age, marriage, divorce and death. Each of these will impact your status and the assets you have when it comes to reading your will.
Should your marital status change, the laws of the land may override your wishes, changing the entitlement of those listed. Your wife may legally be entitled to redistribute your assets despite your will, whilst an ex-spouse may be able to make a claim against your estate. These challenges may end up in the local court system or decided by magistrates.
Local customs may also mean that should your children marry, they are entitled to particular shares in your assets, regardless of your written will.
Remember also to keep the will up to date with all assets under your ownership. Buying property, cars, shares or anything of value needs to be reflected in updated versions of your will so that the value of your estate can be properly estimated. Of course, you may find yourself inheriting items of value from other relatives; don’t forget to include these in your will.
Where will you store your will?
Like the plot twist at the end of a bad crime novel, your will may suddenly come to light long after family members have started squabbling over who should get what.
A document detailing your wishes is only of use if it can be found and enacted within a few days of your death. There are a lot of bureaucratic wheels that need to be set in motion, especially if you have assets in several countries and relatives scattered around the globe. Having the only copy of your will hidden in stacks of old newspapers or stored digitally on a password-locked laptop means that your wishes may never be carried out simply because they can’t be found.
Lodging a copy of your will with a solicitor is one solution, making sure that a competent legal authority can respond quickly in the event of your death. Of course, you can also leave a copy with friends or family in your home country, so they can check that the solicitor really is carrying out your wishes. Keeping digital copies of important documents online is becoming increasingly popular, and sharing passwords with a trusted person could be another way to ensure your will can be found.
Keeping multiple copies of your will in several places increases the likelihood that it will be found and that anyone attempting to defraud your estate will be caught out. Just make sure that all copies are dated and that every backup copy is kept up to date as you make changes.
Think carefully about funeral arrangements
This is often the hardest part to consider and to talk about with loved ones. What should happen to your body after you die?
You may want to be buried close to where you grew up, with a funeral full of family and friends. But there may be a number of other factors you need to consider.
Firstly, repatriation is expensive. Flying your body around the world for burial can be extremely expensive, costing tens of thousands of pounds for special flights, embalming and a long trail of paperwork. The governments at both ends will require certificates to log your death and the shipping of your body, adding to the stress and cost for your family. Many insurance policies will cover these costs, but read the small print carefully to make sure.
Many expats arrange for a local burial, at reduced cost, followed by a service of some kind for those at home. If you are intent on your remains travelling around the world, consider cremation. Although there are some religious and cultural objections to cremation, it is by far the most cost-effective way to transport remains.
It’s important to lay down your wishes in your will, including any instructions for services and memorials you would like to have. If you’ve already done the planning for these events, your family can take comfort in knowing they have fulfilled your wishes and shared an experience you planned for them.
That said, do be aware that there may be local laws and procedures that take place as a matter of course and you may need to account for these. For example, some countries will conduct a post-mortem examination as a matter of course, unless instructed not to. The same may go for organ donation. In France, Portugal and Poland for example organs are collected as a matter of course unless the deceased has opted out of donation.
Your will and registering your wishes with the appropriate people in advance may halt unwanted procedures.
Article by Andy Scofield, Expat Focus International Features Writer