On average 2,700 people die in the UK every day, and of this number up to 2,000 of the affected individuals will die without having made a will. These people die ‘intestate’ which means that the State will decide how their assets are distributed. What’s more, they will of course have no ongoing say over how their children will be cared for for example.
Whilst the figures for the numbers of expatriates who die intestate every day are not available, one can say with certainty that the act of moving abroad is not one that raises in many people’s minds the need to write a new, perhaps multi jurisdictional will. Therefore it’s highly likely that few expatriates have a valid will in place either.
Making a will means facing up to our own mortality – therefore none of us relish the thought of having to do it. However, if you want to have any say whatsoever over how your affairs are handled when you die, if you want to make sure your loved ones are cared for and you want everything handled correctly so that the authorities at home and abroad all know how your estate should be handled, then you – as an expatriate – have a very real and pressing requirement to write a will.
If you’re domiciled in the UK it doesn’t matter where you live in the world as an expat, the British taxman has an interest in your affairs when you die.
This means that all expats have to have a will that is legally acceptable in the UK according to British laws. If you don’t you will die intestate and this can have devastating consequences for your loved ones. For example, your family may face a battle with the government over the distribution of your estate and have to hire lawyers and face the stress and the expense of that. If you’re not married to your partner or you have children from more than one partnership or for whom you’re not the legal guardian, this can all compound the complexities of the distribution of your estate if you have not detailed in a will how your assets should be divided up.
This could mean that the ‘vulnerable’ ones you worked your entire life to provide for are left with nothing but a huge burden of grief when you die. However, if you make a will and detail who should be included and how your assets should be shared out, you can not only prevent additional heartache for your family, you can potentially prevent the taxman from getting any part of your estate depending on the value of it, and how you ask for it to be distributed. For example, under British law if you leave your estate to your spouse, such a transaction is IHT free because your spouse or civil partner is an exempt beneficiary.
When you move abroad permanently you change the jurisdiction in which you pay taxation however, and you may find that your estate is potentially liable to inheritance tax in the UK and in your new nation as a result. This complex situation can be compounded if you also buy or hold assets abroad – and so not only do you need to ensure that your will covers you and your estate for any UK based liabilities and legalities, you have to make sure it is 100% compliant and legal abroad too. Therefore there is an even greater onus on the expatriate to ensure they have a valid, and where required, multi jurisdictional will in place.
The good news is that it is not difficult and it need not be expensive to get a multi jurisdictional will written – what’s more, if you get expert assistance from someone who can correctly advise you about structuring your affairs so that they are legally watertight in all jurisdictions your estate is affected by, a will can be a useful tool in the fight against inheritance tax and its erosion of your assets.
By Rhiannon Davies, editor of www.ShelterOffShore.com
Shelter Offshore: for people seeking a better life abroad