Estate Planning Checklist

We’ve created this concise Estate Planning Checklist which should provide you with a guide to what needs to be considered regardless of your country of residence.

Estate planning is the process through which an individual anticipates and organises the disposal of their estate. Estate planning allows an individual the opportunity to remove uncertainties about the administration of their estate in the event of their death or their incapacitation.

Estate planning is important for everybody to consider, however for expats it is an essential consideration as they are more likely to have assets in multiple countries.

Every country has different rules of how to dispose of an estate when a person dies or is incapacitated, and therefore the process becomes more complicated the moment you move abroad.

Prepare to discuss your own death

It’s probably the most uncomfortable discuss you or your loved one can have, discuss what should happen if you died or were incapacitated for some reason. However, it’s an important discussion to have and gets more important the older you get.

After all, not having the discussion may be an easy option, but dealing with the consequences of not having the discussion could lead to some serious consequences.

When you decide to have the conversation, set aside time and try to remove emotion from it. This should be a time for facts, reason and practicality.

One step which can help is to prepare a document which contains details of your bank accounts, pensions, solicitors, accountants, location of your birth certificate, etc… in fact, anybody or anything related to your personal situation.

Having this handy document will mean that nothing gets missed and the people who are required to deal with your passing will have the right people to speak to.

Failing to do so, or failing to keep everything together, could mean that savings, pensions or other documents may be lost. However, in storing this information, never store your passwords.

Inheritance tax

If you were born in the UK, but now live abroad, it is likely that you will still be domiciled in the UK – even if you have lived abroad for a long time. This means that if your total estate is worth more than £325,000 you will still liable to inheritance tax in the UK and potentially your country of residence.

There are methods to legally avoid unnecessary inheritance tax in the UK which could be considered, including:

• Lifetime gifts to your family members or spouse
• Post death planning – for example, combining your spouse’s inheritance tax band to create a threshold of £650,000

Creating a will in the UK

The key premise behind having a will in the UK is that if you die without making a will, the law in the UK will determine who gets what. For British expats, a will may be able to cover worldwide assets however you should always check before making any assumptions as the rules differ from country to country.

Even if your UK will covers you in your country residence, it may still be necessary to translate it to the local language and then register it locally.

Remember, in the UK your pet can also be looked after in your will.

Creating a will in your country of residence

If you own assets or property in your country of residence, or you die abroad, your country of residence may govern the disposal of those assets when you die. Therefore, even if you are planning to return to the UK before you die, it is imperative that you create a will which meets that countries legal requirements as a UK will is unlikely to suffice on its own.

Living wills

A living will can also be known as an “advance decision”. Typically a living will enables you to define which medical treatments you want to refuse in the event that you are unable to make a decision at the time.

Unless you have a living will your doctor will make a decision based on your best interests if they are unable to ask you directly.

Typical scenarios where this is likely to apply include dementia, car accidents or other situations where you may lack capacity to make or communicate any decisions.

Living wills are important if you have strong feelings about medical treatments or foods, for example, on religious grounds – and therefore give you peace of mind that no matter the situation, your wishes will not be ignored.

Life insurance

Depending on your age, purchasing life insurance can be very expensive, or very cost effective. The older you are the more expensive life insurance can get.

Life insurance is cover which will pay a fixed amount to your dependents if and when you die.

Life insurance will take various factors into account, including your health and lifestyle, but can give you peace of mind that any mortgages, debts or income will be covered in the event of your death.

Debt management

If you die with debt against your name, your estate will pay for these dates before any is passed to your loved ones.

However, if they are solely against your name and your estate cannot afford to pay them in full, nobody will have to pay the remainder. If someone is jointly responsible the other person will have to make up the shortfall in the debt.

Looking after your dependents

If you have people who depend on you, such as elderly relatives or children under the age of 18, you will need to decide who would look after them in the event that you were to die.

As part of your estate planning, you need to consider any plans or provisions to ensure they are safe and looked after in the event of your death.

The first important step is to ensure that those who you would like ask are prepared to do it, after all, it’s a massive responsibility. Then you would need to name them as legal guardians in your will.

If, when the time comes, they are unable to take care of your dependents, the courts are likely to appoint a suitable guardian.

Income for your surviving family members or spouse

If you are, or have been, the sole money earner in your household, you will need to take steps to ensure that any loved ones you leave behind when you pass away are going to continue to receive an income which they can live on.

If you fail to plan your estate correctly, through a combination of inheritance tax and local law, your loved ones may be left with an income which cannot sustain their life.

You may also wish to consider the cost of your loved ones wising to return home as a financial requirement and it is important to discuss this with them as you develop your estate plan.

Prepare and plan your own funeral in advance

If you are living abroad when you pass away, arranging and planning a funeral can be a very stressful experience for those who are left to plan your funeral, if not already planned and paid for.

Every country has different rules and traditions for handling death and it is a good idea to ensure you understand the local customs in advance so that you can decide what happens to your body when you die.

Therefore it is important to know and plan your funeral in advance.

In the UK funeral costs have nearly doubled since 2004, with the average cost of a funeral being around £4,000.

For your loved ones, having to plan your funeral after you have died can be a traumatic experience on top of everything else, and while your estate will normally cover the cost of the funeral, it is now deemed preferable to have your funeral planned and paid for in advance of your death.

This will give you peace of mind that you will receive the funeral you want, ensure that any rise in the costs will be mitigated while also ensure that your loved ones have one less thing to consider when you pass away.

Also ensure that your loved ones are aware where you intend your funeral to take place and discuss your funeral plans with them in full.

Storage of your will and estate plans

In the UK there are a number of places where a will can be stored, including your home.

It is critical that wherever you store it, it should be in a secure location with no other documents attached to it.

Your solicitor or accountant should be able to store it for you, as well as some banks.

Alternatively, in the UK you can store your will at the Probate Department of The Principal Registry of the First Division.

Remember, wherever you store it, it is important that it can be found. If it cannot be found, then your estate may be managed as if there was no will created.

Share responsibilities

In many households, one person will typically manage the finances. How often have you said “my partner used to manage the finances”?

If you or your partner aren’t sure about managing finances, ask for some responsibility – or at the very least run through what you do and how you do it. Try documenting common scenarios, as well as key dates and deadlines to ensure that nobody is left with only memory to go from.

Even the simple things, such as online shopping or paying the window cleaner, may be complicated for others, but are important not to be forgotten.

Create a bucket list

Whatever your situation, your life is important, and how you spend your remaining years is also important. After all, you can’t take anything with you when you die.

Therefore it is a good idea to prepare a bucket list, or a list of things you would like to do before you pass away. This will allow you to plan for what you would like to do, as well as ensure that you have enough money in your estate to either look after you or pass to your loved ones.

Regularly review your estate plans

If you circumstances change it is important that you review how that effects your estate plans. For example, if you move country you should review your will and tax situation as these are things which are likely to be impacted the most with regards to your estate.

Similarly, if you separate from your partner or, alternatively, marry someone, you should see take some time to consider how your estate will be affected and make the necessary arrangements to update your estate plans.

Request free and independent advice to assist with your estate planning

If you would like some help creating or reviewing your estate plan to ensure that it is both tax efficient and also likely to meet your personal objectives, we can help.

Simply enter your details using the form on the right or below and we will arrange for an independent adviser to contact you to arrange a free consultation to discuss your estate planning checklist with you.

During your free consultation you will be able to ask all manner of questions about your estate plan, but you’ll be under no obligation to take any advice offered.