Basic Estate Planning Documents Expats Should HaveSubmitted by Creveling & Creveling Private Wealth Advisory on February 6th, 2019
By Peggy Creveling, CFA, and Chad Creveling, CFA
This article is for general informational purposes only and is not intended as specific legal or tax advice. Please consult your legal or tax advisor for advice relevant to your situation.
If you or someone you know has had a loved one pass away without a valid basic estate planning document such as a properly executed will, beyond the heartache of losing a loved one, you also know how difficult it was to put their affairs in order. Yet if you were to ask a group of expats, you'd likely find that a majority either have not drawn up or executed valid wills, or have not updated them to address their situation as an expat.
This is unfortunate, because dying intestate (without a valid will) can make things complicated for those left behind no matter where they live. This is even more so the case for expatriates, whose affairs are often spread across several countries. To avoid headaches and heartaches for you and your family members, as well as to protect your assets, you and your spouse will each want to execute a will, as well as several other legal documents that can assist you in the event one of you becomes incapacitated. To help you and your spouse get your affairs in order, we've listed below some of the basic estate planning documents you should have.
What it is: A will is a legal document that addresses what should be done with your assets when you die, as well as what happens if both you and your spouse die at the same time. Wills also help to make the probate process―or how your estate is handled through the court system after you die―more orderly. If you have minor children, wills can be used to appoint a guardian or set up a trust.
Why you and your spouse each need one (or possibly more than one): If either you or your spouse dies intestate, the laws where your assets are located will decide how those assets are distributed. This distribution may be different from what either of you had intended. The legal process for sorting everything out could take many months or even years. By making sure you both have valid wills in the legal jurisdictions where you have assets, you can make sure that your assets go to whom you intended and in a timely fashion. If you have children, you can appoint the person who will serve as their legal guardian should you both pass away at the same time.
Depending on your situation, as part of the estate planning process, it may also make sense to consider whether setting up a trust would be beneficial, either as a living trust now or as part of an overall estate plan. Depending on your situation, a trust may help to simplify the probate process, ensure the protection of loved ones when you are gone, or potentially save on estate tax.
Cross-border issues: If you have property or assets in more than one country (and depending on how those assets are titled), it may make sense to have a geographic will drawn up according to the local laws specifically covering the assets in each country. You will want to seek legal advice as to whether this is advisable in your situation, and to make sure each will is drawn up correctly so that there are no conflicts between the documents or anything that could make one or both of the wills invalid. Since you likely live in a different country than most of your other family members, make sure your heirs and executor know how to access your wills.
Living Will or Advance Health Care Directive
What it is: A living will, also called an advance health care directive, is a legal document that gives instructions as to what should be done if you are unable to make decisions due to illness or incapacity. This document can list the type of medical treatment you would prefer, such as under what conditions you would want to remain on life support or be given pain medication. It can also list other wishes, such as whether you prefer to die at home or in a hospital or hospice, whether you want a religious practitioner to attend to you, or whether you want other visitors. You can designate a single person to make decisions on your behalf if you cannot, or you can use a durable power of attorney for health care for this purpose (discussed below).
Why you and your spouse each need one: Living wills can help you avoid unfortunate and heartbreaking situations by providing clear and convincing evidence of what your wishes are when you are no longer able to express them yourself.
Cross-border issues: You'll need to check to see if living wills are honored in your country of residence, if one drawn up in your home country will suffice for both locations, or if you need to use different formats. Your local hospital or care practitioner should be able to advise you in this area. Make sure that your spouse and others know that you each have a living will and what your wishes are, and give them each a copy. Consider also giving copies to your health care practitioner, and legal or religious advisor.
Durable Power of Attorney for Health Care
What it is: A durable power of attorney (POA) for health care gives a person you designate the ability to make health care decisions on your behalf and to hire or fire medical personnel. The directive takes effect when a doctor decides that you are not able to make your own decisions, such as if you are in a coma or too ill or injured to be able to express yourself in any manner. Durable POAs for health care are sometimes combined with living wills in one document.
Why you and your spouse should have one: You and your spouse will want to have a durable POA for health care to avoid the difficult situation where a court order is needed to make medical decisions on your behalf. A durable POA for health care allows each of you to make decisions for the other, rather than leaving those decisions to a doctor, a distant relative, or a judge who may not know what you or your spouse would want. In the event that you may be incapacitated at the same time, you can also appoint alternates to act on your behalf.
Cross-border issues: As with living wills, you'll want to check to see if a durable POA for health care from your home country would be honored in your country of residence, or if you would need a different format.
Durable Power of Attorney for Finances
What it is: A durable power of attorney for finances is a legal document that allows for someone else to manage your finances on your behalf. This type of document either can either take effect immediately or can be "springing," meaning it is designed to take effect under certain circumstances, such as if a doctor certifies that you are unable to make decisions for yourself.
Why you and your spouse should have one for each other: Even under normal circumstances, durable POAs for finances can be extremely useful. For example, if one of you is out of town or otherwise not available, the other will be able to take care of normal financial transactions. However, at a minimum, a springing durable POA for finances that takes effect if one of you becomes incapacitated would allow the other to make necessary financial decisions for you both, without the need for a court order.
Who Can Help You
While it's tempting to try to save money by using preprinted forms or handwritten (holographic) wills, it is easy to make a mistake or omit a necessary phrase that could invalidate your efforts. Your best bet, therefore, is to find an estate planning attorney in your home country who can walk you through the basics of getting valid basic estate planning documents in place. You may also wish to discuss other estate planning options such as whether there is any benefit to setting up a trust—either now (living trust) or as part of your will (testamentary trust).
You may also wish to consult with an estate planning attorney in your country of residence or in any location where you and your spouse own significant assets. Finally, for living wills and durable POAs, you'll want to check with legal advisors and health care practitioners in your country of residence to make sure that these documents are drawn up using a format that will be honored there as well.
This is an updated version of a blog that appeared previously on www.crevelingandcreveling.com.
About Creveling & Creveling Private Wealth Advisory
Creveling & Creveling is a private wealth advisory firm specializing in helping expatriates living in Thailand and throughout Southeast Asia build and preserve their wealth. The firm is a Registered Investment Adviser with the U.S. SEC and is licensed and regulated by the Thai SEC. Through a unique, integrated consulting approach, Creveling & Creveling is dedicated to helping clients cut through the financial intricacies of expat life, make better decisions with their money, and take the steps necessary to provide a more secure future.
Copyright © 2019 Creveling & Creveling Private Wealth Advisory, All rights reserved. The articles and writings are not recommendations or solicitations, and guest articles express the opinion of the author; which may or may not reflect the views of Creveling & Creveling.