The consequences of a family death are always distressing, however for those living and working in a foreign country, such an event can be stressful and challenging in the extreme.
Inheritance laws differ from country to country, especially within Europe, and without careful and prior planning, expatriates who have pensions, property and assets in more than one country may inadvertently pay tax twice, or get trapped in probate in multiple tax jurisdictions.
One example is the issue of testamentary freedom, or the ability to pass your entire estate to whoever you wish, including your spouse. Many European countries do not allow full testamentary freedom, however recent changes in legislation offer much greater flexibility for foreign nationals on the choice of tax law that would apply on death.
So whilst estate planning is sometimes thought of as only being relevant for the very wealthy, in practice it is relevant for anyone who has a family and /or is concerned about what would happen in the event of their death. Proper estate planning involves ensuring that your assets are held tax efficiently and will be distributed in line with your wishes, and planning should take place throughout life and not just on death.
Typical measures may include;
- Writing a will
- Appointing executors of your estate, and guardians for younger children
- Establishing a life insurance contract
- Creating a trust
What is clear is that the consequences of inaction can be significant, and often expensive and it is therefore essential to ensure proper planning is in place. For an accurate assessment of your own situation in this regard, contact us.