It is very important to have an up to date and valid Will regardless of your situation. Yet for expats, it is even more important that you have a Will in place as Inheritance and Tax laws differ in other countries.
As an Expat, there are numerous issues that complicate the Will-making process. You will need to consider what can be very complicated matters of residency and your domicile status and this means consulting a professional for advice. With the right solicitor, however, making a Will as an expat can be an entirely stress-free process, ensuring that your loved ones get the assets you want them to and reducing potential disputes and other complications.
The following information provides a basic overview on the key areas you need to consider as an expat. It is best to call on 01273 604123 or email us to arrange a chat to discuss your specific circumstances and allow us to answer any questions you may have.
Why Expats Should Make a Will
Everyone should make a Will as they outline exactly what you want to happen to your assets when you die. Without a valid Will in place, your hard-earned assets will find themselves distributed under the rules of intestacy. More often than not, this results in your assets being distributed in a way that you would not want and your loved ones losing out.
As an Expat, there are even more reasons to have a valid Will in place. Different countries have different rules around inheritance, property and tax. You need a Will that protects your assets as much as possible and ensures that your wishes are carried out in regards to your estate. It is vitally important therefore that any Will meets the requirements in the country in which you live and is legally valid. If you do not have the right type of Will in place then you risk the following:
- Your assets may not end up where you want them to go and…
- It can take several years to sort out the mess across different jurisdictions and…
- You may end up paying more tax than is necessary.
Will disputes are also on the rise and Expats are certainly not immune to this. In fact, the very point that you may have assets in different countries can result in more people feeling they have a claim to your estate. You therefore need to be confident that your Will is valid and in line with your wishes.
Issues faced by Expats when Making A Will
When it comes to making a Will as an Expat there are two separate but intertwined issues you will face:
- The amount of Inheritance Tax you (or rather your estate) pays when you die – this will be based on domicile and tax treaties
- Who your assets go to, based on succession law.
Domicile, Residency and Tax Treaties
Knowing your residency status and your country of domicile when you are overseas is important as it has an impact on any Will you make and how it is executed. When it comes to Wills and tax matters for British Expats, much of what happens after your death depends on very complicated distinctions around your country of residence and your domicile.
Your domicile is determined by where you were born, where your father was born, where you have lived and where your assets are located. Even
if you are a non-resident in the UK for tax purposes, your domicile may well have not changed and you will still be liable for UK inheritance tax. A change in Domicile is not a simple process, and involves meeting criteria and severing nearly all links to your original country. Due to the significant bearing these matters have on the management of your estate, it is vitally important you speak to an expert solicitor.
Inheritance Tax for Expats
Inheritance Tax in the UK depends on where your assets are. For example, if you are a UK domicile then you will pay Inheritance Tax on your assets worldwide. If you are a non-UK domicile then you will pay Inheritance Tax on your UK assets only, however, foreign countries may also tax your estate. To ensure that you pass on as much as your estate to your heirs as possible, you should consult a professional to determine your situation. In some cases your estate may be taxed in more than one country.
Succession Law and Expats
How Succession Law applies to the distribution of your estate as an expat depends on the scope of your Will. Some Wills can be valid Worldwide, some everywhere except certain countries or only remain valid in one particular country. You must also consider the willingness of any foreign jurisdiction to recognise a Will made in another country and how this influences your succession planning.
In many European countries, including France and Spain, they operate a system of forced heirship. This means that all, or a proportion of an estate, passes to the protected heirs regardless of the details of the Will i.e. you have to leave x to spouse, y to children. These systems can clash with a UK made Will, which generally gives you the freedom to gift as you want as long as it clearly written in a valid Will.
As experienced expat solicitors, we are aware of the huge range of individual circumstances that are covered under the ‘expat’ umbrella. As such, it is near impossible to provide advice without speaking to you and finding out all about your specific situation and what you want to achieve.
In simplistic terms, however, some of the following may apply to you:
English speaking ex-colonies
UK Wills are recognised by English speaking ex-colonies (and vice versa)
The EU is moving towards mutual recognition of Wills but opt-outs and different law adoption rates will only further complicate matters. This currently applies subject ot conditions, to e.g. UK-dom with UK and French assets living in France with UK Will operating worldwide. It does not apply to a French domiciled person living in England trying to get round French inheritance laws by making UK Will operating worldwide.
If you are a UK domicile and have assets abroad or if you are a UK-dom living abroad with non-UK assets you will need advice. It is likely that all your worldwide assets will be subject to UK Inheritance tax and may also be subject to tax in the foreign country as well.
If you are a non-dom living in the UK with UK assets you will need professional advice. The start point is that UK assets will be subject to UK inheritance tax.
Mixed Marriage / Civil Partnership
If you are a mixed marriage/civil partnership (i.e. UK dom and non-UK couple) then it is imperative that you seek advice from an experienced solicitor as this situation brings into play a whole series of additional UK Inheritance Tax rules.
When Should Expats Update A Will
As with everyone, you should update your Will after any major change in your life. As an expat though, there is the potential for more external forces to affect your Will and it is worth reviewing your Will regularly with a solicitor. The common life changes are as follows:
- Getting separated or divorced
- Getting married
- Having a child
- Acquiring new assets
- Moving house
Contact Us Today For Advice About Expat Wills
Due to the complicated nature of expat Wills, you need a solicitor that you can trust. At Burt Brill & Cardens, our solicitors are experienced in helping expats with their legal issues, no matter how complicated. We also know that regular contact is vital so if you are unable to call us then we can arrange to correspond with whatever method best suits you including email or Skype.
Please contact us today for a no obligation discussion about your needs.