This article will discuss expat wills – a topic many readers have asked me to write about for a long-time.
This article shouldn’t be considered as legal advice. It is merely a reflection of what I have seen down the years from my professional experience, and the research I have undertaken on the subject.
If you have any questions about wills, or want to be pointed in the right direction about writing one up, you can contact me.
For those that prefer visual content, the video below summaries the article:
What is the main issue and complexity with expat wills?
The main issue is that each country has different laws. If you are living in country A, your spouse is from country B and your money is in countries C, D and E, you have a very complex situation.
Unless you are a billionaire or multi-national corporations, it isn’t easy to have a “multi-jurisdiction will” which will cover you in every country and actually work in the real world.
In other words if you are British and your money is in Singapore, France and Isle of Man, it isn’t easy to assume that one will can cover every possibility in each jurisdiction.
This is despite many claims to the contrary about how easy it is to have an international will.
It might be easy to set up an international will. The question is is it likely to work upon death?
International wills – some failures I have seen.
I have personally seen several cases where people have had international wills written for them, and the investment providers have refused to release the money to the widow, until documents are translated into the local language.
This is despite dealing with people who are supposedly specialised in the area, and promised to set up good quality wills.
There are absolutely good reasons to want to write a will. Nobody wants their loved ones to miss out if they die, and every country has different rules on taxes, inheritance and so on.
However, you should be careful with writing up an international will, and paying extra for that, until you are sure it will work in practice.
Why is your domicile important?
It is much easier for people to change their residency, tax residency or even citizenship, than their domicile.
Even though most countries don’t tax expats on income if they live overseas, that doesn’t mean that governments can’t make a claim on your estate, if you die.
This is where things can get very complicated. If your are a British expat, for example, inheritance tax usually depends on your domicile and country of residence.
Changing your domicile isn’t a simple process. If you are a UK domicile, you will pay inheritance tax on your worldwide estate, and not just your British assets.
In comparison, if you are non-UK domiciled, you only pay inheritance tax on your UK assets.
How about succession laws?
In certain circumstances, succession laws can make will writing a bit easier.
However it is a myth to suggest that it is easy to have a worldwide will as many foreign counties don’t have the same legal system as your country of domicile.
For example, the France legal system is very different to a country following British laws.
In the French system, you have less freedom to pass on your wealth to who you like, due to the heirship forced principle.
When should you update your will
In general it makes sense to update your will when:
- You move abroad
- You get divorced
- Have a child
- Have acquired new assets
How about religious wills for expats?
This depends even more complicated. It is possible to set up wills according to Jewish, Islamic or other religious traditions.
However, you will face some of the same issues we have spoken about earlier in the article.
What are the alternatives to expat wills?
Sometimes trusts can work as an alternative in certain circumstances.
In conclusion – what makes sense?
Wills are very complicated in the expat arena so it makes sense to seek proper legal advice on this matter.
In the real world, I have seen more success stories involving people with simple beneficiary forms attached to their investment and bank accounts.
This acts as a letter of wishes. If this is used in conjunction with a will in your country of domicile, it can work better than a so-called international will.
That is because your domicile is usually where probate is sorted out.
In reality, having a UK will, if you are from Norway and living in Singapore, with money in the Isle of Man, is unlikely to do much good!
Therefore it is better to seek professional legal advice from somebody who has actually dealt with this.
My experience has simply taught me that most forms of multi-jurisdiction wills, don’t work in the real world when it comes to inheritance. At the very least they add a lot of risks to the equation.
So it does make sense to review your will with a legal specialist, and that can increasingly be done remotely.
Pained by financial indecision?
Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
I have 350,000 pounds I want to invest .