Expat Wills Explained
An expat is an individual who is living and/or working in a different country than the country whose citizenship they own. Expat wills can create complicated situations if not managed properly. This is because laws governing an expat’s assets and income are different and depend on the country they are residing or working in and the country they are from. Hence, it becomes essential to understand how expat wills work, and that is precisely what we will cover in this article.
Expat wills always consider the laws of both countries undertaken. For example, if a British individual is living in the US, his UK & US Will will deal with his personal belongings, income, cash and bank deposits in both countries together, taxed as per the two countries, respectively. Two different wills can be formed and clubbed together to work simultaneously, ensuring at no point one will revoke the matter in another.
How are the assets taxed?
The assets and bank accounts that are in the expat’s home nation will be taxed exactly according to the home country’s laws, whereas any bank account and assets held in the other country will be taxed as per that particular country’s taxation laws.
Tax and laws related to assets like a house are based on the expat’s home country, wherein laws are considered only for the movable assets’ distribution held anywhere in the world and the immovable assets present in the home country.
For example, if the same British person working in the US will inherit taxes due on all assets that are worth over a particular value as set in the UK, no matter where these assets are present. However, the same assets may also be taxed again in the US or any countries they are present in.
But, if there exists a double taxation treaty between the two countries which the expat will have to check, the expat will not need to pay taxes twice to both countries, and the assets will only be taxed once to the home country, which in our case is the UK.
Guardianship
Some expats who are concerned about who will take care of their children if they were to leave this world early, especially if the kids are under 18, can utilise the benefits of naming a guardian in their will. When an expat names the guardian(s) on their will, they lawfully announce that the guardians will be responsible for taking care of the children with the same role as a parent after the expat is gone.
However, this differs from country to country as some nations allow guardianship while others do not. This is why it is always best to discover beforehand if the country you are working in and your home country support the idea of guardianship.
What does an expat do if they do not have a will?
When an expat does not have a legally binding will, the laws in both countries automatically prevail upon their demise, and the jurisdictions are responsible for making any decisions concerning your properties, investments, assets and left income. The jurisdictions, in most cases, divide the estates in a standardised manner which may not be ideal for each individual.
For example, a partner with whom the expat has been together for their entire life and have children together but is not married will not be able to inherit anything after the expat’s demise due to not being their legal partner in front of the government/law. Hence, not having expat wills can lead to challenging situations within a family, which may lead to hefty losses that will be borne by the ones the expat left behind.
How does the European Union deal with expat wills?
Any expat holding any number of assets or properties in the European Union except Ireland, Denmark or UK will witness that laws governing property devolution are of the European Union and not the country where the assets are situated. This happens due to EU’S Succession Regulation that states that a person’s entire estate will be decided by the country where the expat was last residing. However, expats do have a chance to choose the law of their national country beforehand to avoid any confusion later.
Final words
Expat wills are a complicated process to begin with, but with the right professional on board, you can make sure that your assets and income, regardless of country, are safe for your heirs. Every country comes with its own rules and regulations, and since each person has unique needs and how they wish to divide their estate, it is best to seek advice from experts and minimise any risks that may be involved.
If you’d like to know more about expat wills, request an introduction to an expat will specialist by clicking the button below.
