Wills and Inheritance Tax Planning For Expats
Probate is technically the legal verification of a will, where appointed executors have a legal duty to manage and distribute estates of the deceased according to their wishes. For the appointed executors, application for a grant of probate is made from the Probate Registry that grants authority to deal with belongings, property and investments of the deceased.
Wills are crucial to ensure smooth transition of assets to the intended recipients after death. Without a will complications for relatives can be severe and if large amounts are involved, very expensive. If you have assets to pass on you need a will, and there are many reasons why.
Wills are often overlooked by expat financial advisors as not being lucrative to arrange. Your advisor should ensure you have a will in place and take some responsibility for your affairs after your death. Below is more information on why a will is crucial, and why you should not to delay arranging it.
Are Wills Expensive?
The cost of a professional will is correlated to its complexity but can be inexpensive. If your needs are complex the price can rise, however, the potential stress, inconvenience and taxes that wills help avoid eclipses the cost during a particularly distressing time.
Do You Need One?
Some people believe a will isn't necessary or think 'a basic one' is sufficient. Others don't recognise they needed a will before seeking advice and have subsequently avoided serious financial consequences. Some of the world's wealthiest people have suffered due to lack of planning, with many high-profile cases showing us that nobody is exempt.
Are Wills Complicated To Arrange?
Wills can be very simple to organise and using professionals can simplify the process. Experts can assess quickly if a will is necessary and you then decide if you accept their advice.
Complications often arise without professional advice and when 'DIY' wills are used, which can leave crucial areas unaddressed. Legal terminology used by lawyers and solicitors is complex, and handling legal procedures can be distressing for beneficiaries when a loved one has passed away.
What Happens Without a Will?
The consequences can be catastrophic personally, legally and financially. Unprotected estates can see avoidable taxes spiral and without a will, intestate succession rules apply and your assets distributed by administrators.
Surviving spouses and children are usually first to inherit but If none exist, siblings or parents are next in line as beneficiaries. Depending on laws where you live, other relatives may be apportioned parts of your estate, effectively removing control of whom you want assets to go to.
The ability to leave assets or specific items to non-relatives (or indeed exclude them) is lost without a will. If you have no family to leave assets to, donations to friends or charities are also ruled out as the state claims the assets.
Should You Seek Professional Help?
In our opinion, yes, always. If your estate is administered by family members instead of a Grant of Probate, they need to apply for Letters of Administration making them responsible as executor. Errors can prove costly, so we recommend leaving it to the professionals as you don't get a second chance.
Wills are complex and often feature tax limitation structures, so mistakes in estate management or the distribution of assets can result in benefits being unnecessarily taxed, leaving the executor liable.
Our experts can help arrange your financial affairs when you are no longer here and ensure your loved ones are protected during the toughest of times. Contact us today and you'll to get the estate planning advice you need.