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Estate Planning For U.S. Citizens Living Abroad

estate planning


Let’s face it, estate planning can get quite complicated, especially if you are a U.S. citizen living in a foreign country. There are tons of different legal procedures you have to follow and documents you have to prepare, and let’s not forget the two different sets of taxes and regulations you must comply with. It’s no wonder most people tend to avoid planning their estate until absolutely necessary.



However, as dark and depressing as it may seem, we never truly know what is around the corner. If you want to make sure that your heirs and beneficiaries receive the assets in your estate, you must put plans in place to ensure the rightful transfer of ownership to them upon your passing. That’s why you must contact an estate planning attorney to help you navigate the difficult legal processes that come with the territory, especially if you live abroad.


What Is Estate Planning?

Estate planning is the process in which an individual arranges the transfer of their assets in anticipation of their eventual passing. It’s often one of the most neglected parts of financial planning; however, it’s usually one of the most important.

Estate planning is all about working out the best way to leave your cash, assets, and property to your loved ones, so you can make their lives easier when it comes to claiming what is rightfully theirs. As such, an estate plan acts as a detailed plan for how you would like your wishes to be carried out once you have gone. It involved estimating the net worth of your assets, calculating liabilities and debts owed to creditors, and then ensuring you have all of the correct documentation in place to ensure your wishes are legally binding.


Who Needs An Estate Plan?

You could make a fair argument that just about anybody who has assets that they want to pass on to their loved ones needs an estate plan in place. They help protect your beneficiaries and make the transfer of assets much easier. If you don’t have a plan in place, this leaves the door open for disputes and quarrels, bad decisions, outside influences, creditor problems, and complications arising from divorcing spouses. An estate plan reduces the chance of these concerns.


Most Common Estate Planning Documents

When planning your estate, you need to have the correct documents in place in order to ratify your plans and make them legally binding upon your death; these are:

  • Your last will and testament
  • Beneficiary designations
  • Letter of intent
  • An advance medical directive
  • Guardianship designations
  • Revocable living trust


The Validity of Your U.S. Will in a Foreign Country

The validity of your U.S. will in a foreign country all depends on a number of variables, such as the country where you reside, your residential status, the value of the estate, and so on. In general, if your will is considered valid by a foreign country, this means they recognize it as a will. Fortunately, there are a couple of international conventions that cover wills and final testaments that permit foreign countries to deem your U.S. will as valid, so if you live within one of these countries, your U.S. will may work abroad, and you do not need to take any further action.

However, if you live outside of one of these countries, your U.S. will abroad be dependent upon the local law of the area where you now live. The two conventions in question are as follows:

  • Hague Convention on Form of Testamentary Disposition of 1961
  • International Will Statute, also known as the Washington Convention

If you live outside of the countries that have signed these agreements, you can seek legal advice from a local attorney to decide whether your US will is legitimate.


Recognition Of Your Disposition Of Property And Choice Of Law

Some overseas nations have heirship laws that vary from those of the United States. These countries impose certain limitations on what is and isn’t permitted through your estate planning regarding the transfer of property to your heirs. For example, “forced heirship” is prevalent in a number of countries, such as Germany, Canada, Iran, Japan, and France.

These laws can get quite complex, but in general, they only apply to the portion of your estate that lies outside of the amounts reserved to heirs. However, if you live in one of these areas, it’s worth consulting an expert just to be sure that your will and estate plan will stand up.


Is It Practical To Use One U.S. Will To Govern All Of Your Property?

Even if you reside in a country that is a signatory of one of the aforementioned conventions and does not have forced heirship, it may not be practical to have your U.S. will govern all of your property and assets. This is because coordinating the estate management through many jurisdictions can be very costly and time-consuming for the executor. This is especially true if you live in a non-English speaking area, as the additional administrative work and costs levied by the jurisdiction handling the primary probate will start to add up.

To get around this, it would be wise to use multiple (or “situs”) wills in order to make the executor’s life easier when it comes to the distribution of your assets.