In this increasingly mobile world, clients often spend periods of time living in other countries, or even retiring overseas. How does one address estate planning in this situation?
More and more, Americans are choosing to travel overseas. Sometimes, when they travel for business or pleasure, it just whets their appetite.
While there aren’t many reliable figures, in 1999 the State Department estimated that between 3 and 6 million Americans are living abroad. In 2016, they estimated 9 million Americans living abroad. Here’s an Esquire article which provides further information on the American diaspora.
According to Wikipedia, the most popular countries for American expats, besides Canada and Mexico, are Germany, Philippines, Israel, United Kingdom, Costa Rica, South Korea, and France. Each country has its own set of laws and customs which impact estate planning. So, what is an American living or moving abroad to do?
First, it’s important to have an American estate plan to cover assets in the United States. Also, the tax laws of the United States apply to American citizens, regardless of where they might live. That’s right, Uncle Sam can reach you anywhere in the world, from Afghanistan to Zimbabwe. Even if you own property overseas, it’s included in your taxable estate in the United States and your estate plan should consider this.
Thus, the American estate planning attorney should be the quarterback for the plan. They can prepare a plan to dispose of the American assets and consider the overseas ones. The American plan typically includes a Revocable Trust for the American assets, a Pourover Will, a Power of Attorney for Property, a Power of Attorney for Health Care (which typically includes a Health Care Directive for end-of-life decisions), and a HIPAA power authorizing access to protected health information.
These documents will work fine regarding property in the United States and cover the person while they are in the United States. The American estate planning attorney can coordinate with an attorney in the other country regarding the acceptability of these documents for covering the expat or their property in their adopted country. It’s possible the attorney in the adopted country will suggest additional documents to cover the expat in their adopted country. For example, if there is real estate owned in other countries, the laws of that country could control the distribution of that asset and mandate a particular distribution.
Living abroad can be a thrilling experience. But, it’s important to make sure your estate plan is coordinated and effective wherever you live. An American estate planning attorney can coordinate a plan that is effective for you and which considers your unique lifestyle.
So, enjoy your travels and celebrate your opportunity to explore the world. Whether you will be home for the holidays or in Paris for a Joyeux Noël, you’ll feel better once you have a coordinated estate plan in place.