You may have approached us for advice and support with consolidating and organising your assets. However, you may not have spent much time considering how your decisions might affect your family’s future.
Following on from last month’s discussion about the top 3 reasons to put an estate plan in place, discover the essential steps you should take to ensure your wealth is passed on to your family and loved ones without undue delay.
56% of adults haven’t written a will and 42% have yet to discuss their financial wishes
According to research from Money and Pensions Service, 56% of UK adults don’t have a will. Meanwhile, a 2023 study by the National Will Register found that 42% of UK adults have yet to discuss their financial instructions for when they pass away.
If you’re among them, it’s time to act – especially if you live abroad or have assets in multiple countries.
Leaving formal wishes in a will and talking to your family about your intentions could help to reduce confusion. Without a clear plan, your family could face legal challenges and hefty tax bills.
Read on to discover five steps to ensure you’ve made appropriate plans to leave a meaningful legacy.
1. Have a plan for each jurisdiction where you hold assets
Living and working in different countries throughout a successful career may mean you’ve left a trail of assets in multiple jurisdictions.
If so, estate planning can become even more complicated.
Every country has different rules for how wills are recognised, and multiple wills drafted for different jurisdictions can lead to conflicts.
For example, a will written in the UK may not automatically be valid in France or Spain, potentially leading to legal disputes.
Likewise, owning property abroad could subject your estate to double taxation. Double Taxation Agreements (DTAs) are designed to prevent this, but if you don’t understand all the rules, you may miss out on potential benefits and expose your estate to unnecessary taxes.
To get a handle on your global assets, make a complete list of what you hold and where. This might include:
- Property
- Investments
- Cash savings
- Bank accounts
- Pension arrangements
From here, we can help you understand the measures you could take to account for differing estate laws in each jurisdiction.
2. Make provisions to protect your family
Singapore is an attractive destination and home to more than a million expats from around the world. If you and your spouse don't share the same nationality, you'll need to take this into account when drawing up your estate plan.
Depending on where your spouse is from, there may be different legal and taxation rules that will influence your decisions.
For expat parents, having a valid will is crucial – not just to ensure your wealth is passed on as you wish, but to appoint guardians for your dependent children.
Without a legally binding will, the courts could decide who cares for your children, potentially ignoring your personal preferences.
If you fail to appoint a guardian and your children are orphaned before they turn 21, the courts will choose an adult they deem appropriate to fulfil the role.
Taking steps to appoint a guardian as soon as possible could provide valuable peace of mind that your children will be cared for, should the worst happen. You might also want to make provisions for your chosen guardians, to cover the ongoing cost of raising your children.
3. Appoint someone to oversee your financial affairs if you become unable to do so
It’s hard to contemplate the possibility that you may become unable to manage your financial affairs, but it's sensible to plan for every eventuality.
There are steps you can take today to ensure that your wealth is managed according to your wishes and your loved ones’ inheritance is preserved.
If you don’t already have one, organise a Lasting Power of Attorney (LPA). This legal document lets you nominate a trusted person (or people) to look after your finances if you become unwell or lose mental capacity to cope alone.
None of us can predict what’s lurking around the next corner, and since you must have adequate mental capacity to set up an LPA, it's a task you should complete as soon as possible.
As with your will, you’ll need to create a separate LPA for each jurisdiction you have ties to.
4. Consider the value of using trusts
Trusts can be a valuable tool, particularly if you hold assets in multiple countries.
By placing assets in a trust, you can control when and how they are distributed, helping to reduce any potential tax liabilities and ensure your children and loved ones are taken care of in the way you choose.
However, managing a trust that spans multiple jurisdictions is no easy task.
That's where we come in.
As professional advisers, we can help you navigate the different tax laws, inheritance rules, and probate processes that may apply.
5. Seek professional support from an expert international adviser
We're here to help you navigate estate laws in all the jurisdictions where you hold assets.
While international estate planning can be complicated, investing your time to ensure you have a robust strategy in place could help you pass more of your wealth to those who matter most.
Some careful planning now might not only decrease the time it takes for your loved ones to receive their inheritance, but it could also reduce stress at an emotionally challenging time.
