How can an expat manage their assets and investments while moving across the globe? ING provides some tips on international planning.
Estate planning is the process of reviewing one’s assets during life with the objective of organising their transfer partially during life or fully when passing away as efficiently and appropriately as possible according to one’s wishes. It is a comprehensive, complex and living matter. When international aspects come into play it is even more important to have a flexible plan and to involve true experts in all fields where needed.
With over 50 years of experience in advising expats on their finances, ING offers a range of banking, insurance and financial services to professionals moving to Belgium - from bank accounts to mortgages and advice on the Belgian pension system.
Can you plan for all your life stages?
If you accept that your plan will change all the time because of changing circumstances and laws and regulations, then you can. Of course, you should keep your key beliefs or wishes and not change them with the slightest new change in circumstances. To revisit your plan at least yearly to see if it still fits the new you and the changing environment is good management.
The most common approach to estate planning is to start by making sure you have everything you need to lead your life: a place to stay, an occupation, health care and an income to pay for all that. Then of course the same for your loved ones. Only thereafter projects come into play followed by investments. Eventually when all of that is set you can look at the legal and tax optimisation possibilities.
All too often people focus too much on the latter steps before getting the first ones right.
Life-planning as an expat
The perfect legal and tax structure for international people is often so complex that it needs to be revisited all the time because of ever changing civil and tax laws. This becomes exponentially more difficult the more countries that are involved in the situation. A marriage contract in one country, a will in another and residency in yet another country make your situation very complex.
For some countries even being a national of such a country makes you liable to the laws of that country wherever on earth you may be a resident. The USA, and even the UK to some extent, are typical examples. If you add to that investments in different countries, including real estate, and you have the recipe for an ever-changing plan.
The name of the game is to simplify and streamline your situation and to keep a file with all your documents. It may be good to prepare a list of people to contact for your heirs for when you are not there anymore: notary, lawyer, will and so on. It is important to be clear on your choices and the direction you want to go in.
The most complex situation for international mobile people often appears in the age bracket of 35 to 45 years old. Career expats then often have a life partner, young children, assets including pensions in different countries, and a plan to move countries a few more times. In contrast to the 55 year olds they do not yet have a clear vision on the base country from where they will lead the rest of their lives. Once that becomes clear, adapting the plan and the situation to that country simplifies things a lot. In the mean time keeping all the documents in a file, and doing close tracking of the evolving legal and tax environment for your key countries, is important.
Dave Deruytter is head of expatriates at ING Belgium and has first-hand experience of living as an expat around Europe. Dave boasts more than 30 years of experience in expat financial advice on everything from bank accounts to insurance and real estate.Explore asset management