Jeff provides estate planning services to Americans living in the Czech Republic, elsewhere in Europe and the E.U. and worldwide.
Estate planning is always important, but even more so for American expats and those that have assets and property in a foreign country. By not having a will, you are giving up control over what happens to your property and assets. You may be leaving your loved ones and your priorities vulnerable to:
These concerns are compounded if you live abroad. This is because if you die without a will, or “intestate”, your property and assets will distributed by a court according to laws governing “intestacy”. Generally, the laws that govern the distribution of assets are the laws of the jurisdiction where the deceased was a resident.
This means that if you die in a foreign country, that country’s courts will generally apply the law of that country to the distribution of your entire estate.
This is the case for residents of E.U. member states. Regulation (EU) No 650/2012 of the European Parliament aka “Brussels IV” proscribes that persons who die in an E.U. country will have their estate divided according to the laws of the state in which they are “habitually resident”. This is generally interpreted as being the country where a person resides with the intent to stay indefinitely. Many factors can be involved in making this determination (length of time residing in the country, family status, employment, etc.).
For example, this means that if an American residing in the Czech Republic dies there without a will, then his or her estate will be distributed according to Czech law. This scenario should alarm American expats, because compared to U.S. law, Czech inheritance law has a rather rigid structure for dictating who receives a persons property and assets after they die, as is the case with many other E.U. member states. This rigid approach may or may not adequately protect the interests of the deceased’s family.
Fortunately, American expats can opt out of this default provision and elect to have the laws of their country of citizenship apply to the distribution of their estate by having a valid will prepared which expressly states that their estate should be distributed according to their will as interpreted by U.S. law.
Basic Estate Planning Documents Every American Expat Should Have
The will is the centerpiece of your estate plan. It determines who will take your property when you pass, who will administer your estate, and who will serve as a guardian to your minor children. Furthermore, it is essential that as an American expat, you have a will that specifies that U.S. law should govern the distribution of your estate.
Health Care Proxy
A health care proxy is the document where you name a health care agent or proxy. A health care agent someone who can make health care decisions on your behalf in the event your doctor determines you are unable make or communicate them. All U.S. states and many countries recognize health care proxy instruments.
Durable Power of Attorney
A durable power of attorney is similar to a health care proxy, except that with this device you name a person who can act for you in legal, financial and other matters. Like health care proxies, all U.S. states and many countries recognize durable power of attorney instruments.
A living will or an “advance health care directive” deals with end of life decisions if you’re unable to communicate your wishes. Living wills are not binding in many foreign countries and even some U.S. states. Nevertheless, they are useful because they help guide your health care agents and physicians about the choices you would make if you were able.
Highly Recommended: Revocable Living Trusts
In addition to the above legal documents, the formation and use of one or more revocable living trusts is often advisable for many American expats. Among other things, a revocable living trust helps reduce or avoid the time and expense of probate of your U.S assets. Additionally, a living trust ensures that your privacy is protected, because it’s a private document. The trustees, beneficiaries, and property of these trusts are all private. A revocable living trust can also protect you in the event you incapacitated. A revocable living trust may also include provisions that establish trusts for your minor children and/or grandchildren with their inheritance to be administered by the trustee, pursuant to the terms of the trust until the come of age. Furthermore, in some cases, a revocable living trust may be used to reduce or eliminate estate taxes.
Other advanced options are available for those with substantial assets, nontraditional families and particular needs.
If you need to have a will or comprehensive estate plan prepared, or are simply interested in learning more contact Jeff for a free consultation.