Expatriate Financial Planning, back to basics …………
In our earlier articles we covered asset protection structures through the use of offshore trusts, and inheritance planning vehicles. Often overlooked however, are the most basic foundations of any financial planning review, especially relevant for international families taking up residence overseas, or already living outside their home country.
Could your family survive…?
This question is an obvious one but we are always surprised at how many expatriate families ignore international life assurance. This is even more important for cross cultural relationships and marriages. For a myriad of good reasons, most expatriates will retain the bulk of their capital, bank accounts and investment portfolios, outside of the country that they are living in. If the survivor (s) is not aware of the existence and/or location of those assets they could remain undiscovered for years.
In any event, on the death of the person named on the account, (and if not in joint names and / or with named beneficiaries) those assets will be frozen in each country that they are based in, and will then have to pass through probate in the domicile country of the deceased, which more often than not, is the country they were born in. This could take a year or more, not to mention the logistics involved, and no one gets any money in the meantime – a huge burden on loved ones. The bills keep coming in, school fees still need to be paid, and in many cases the survivor will not be able to generate an income level sufficient to meet initial and ongoing needs. This could lead to a severe downgrading of current lifestyle and a significant depletion of capital.
Check that any existing life protection you have in place already still covers you whilst living overseas?
Many expatriates assume that the life cover they took out years ago in their home country will still cover them in Asia. This may be so for a few but the vast majority of ‘home country’ insurance companies will not extend cover to overseas residents, and will certainly not take the trouble to tell you so until it is too late.
Of course no one knows when their time will come. However, knowing that you have taken steps to help those you leave behind to cope if the worst should happen can be hugely reassuring to all involved. A local will for local assets, offshore life cover with named beneficiaries, and offshore assets assigned into a suitably worded trust are the basics.
Important Note – This article contains general information only and is not intended to be taken as specific financial, investment, or tax advice. A personal analysis should always be obtained.
IFA International does NOT provide discretionary portfolio management, securities advice, forex trading, or local brokerage / insurance products. The services that IFA International Group provides are for International Expatriate Clients only and are not applicable to local Nationals of any country. This is NOT a solicitation to sell or market securities. Questions to the author can be directed to: [email protected]