Retirement Overseas – Dead right or dead wrong?
reality that many expats who retire abroad will need to deal with
When you retire overseas, maybe you visualize long, relaxing days filled with adventure around every corner, coupled with a lower cost of living and a welcome escape from high taxes in your home country. But did you ever get past this vision and give much thought to what will happen if you die or become terminally ill while you are living overseas? Unfortunately, this is a reality that many expats who retire abroad will need to deal with. A death is hard enough on a family in the best of times, but combine foreign languages, foreign laws, possible extra taxes, confusing paperwork, insurance problems…and now imagine your family members trying to navigate this situation by themselves.
One of the most caring, considerate things you can do for your loved ones is to make sure that your expat affairs are in order, so at the time of your death they can spend their energy mourning you, and not dealing with foreign beaurocracy in a language they may not understand. Here we will cover some basic issues that you need to address or at least give some thought to. This article is not being written as an estate planning guide, as I am by no means an expert in this field, so please see a trusted lawyer, preferably one that has experience with expat law, to make sure that you are making the right decisions for your personal situation.
How will your loved ones be contacted?
At the time of your death, who do you want to notify your loved ones outside of the country? Do you have a trusted friend or neighbor in your new country that would be willing to take on this responsibility? You will need to provide them with names, phone numbers, and even possibly an international phone card to make certain that they have the ability to call right away. Does this person speak English? How will that phone call go if they do not? At the very least the embassy in your adopted country is responsible for making the phone call to your next of kin, but you also need to make sure that the information they have on file is up-to-date.
Does your insurance cover the costs of repatriating your body?
Understandably, this is a topic that most people would never think about. If you want to be buried in your home country, you would be astounded to know the costs involved in shipping a body overseas. The cost of moving mortal remains depends on weight, location of death and transport costs. To move a body from Costa Rica to the US, for instance, could run as much as $8,000. Keep in mind that you do not just have to buy airfare, but you need to cover the costs of a coroner, embalming, a coffin, refrigeration, and getting legal certificates (essential documentation includes a death certificate, embalming certificate, ‘no objection’ certificates from various government ministries and a ‘sealing of the coffin’ certificate undertaken in the presence of an embassy official from the country receiving the body). I have spoke to some expats who assumed that the embassy would cover the costs or repatriation of a body, and the answer is, a resounding no!.
To make sure your family is not burdened with these costs, make sure you buy out-of-country medical insurance that includes ‘repatriation of remains’ for all parties. While it is a standard element in many travel policies, group insurance provided by employers or credit card companies may not offer this in their coverage.
There are also wide differences among retail travel policies when it comes to overall coverage. Some policies may not pay out if someone dies overseas from a pre-existing medical condition, for instance. Others may not cover expenses incurred in countries for which the federal government has issued a travel warning.
Keep in mind that your actual coverage may be limited to certain expenses or a flat dollar amount. Be sure to check whether the maximum benefit will cover the full cost of bringing remains back to your home country.
What about traveling with an urn or cremated remains?
So after hearing how difficult and costly it can be to get a body shipped home, maybe a more simple idea would be cremation. But if you can’t board an airplane nowadays carrying an open bottle of water, imagine the complications that can arise when you try to pass security with a metal container filled with cremated remains. You will have an easier time passing through if the ashes are in a plastic, glass, or wood container, so think of this ahead of time. Metal, stone and ceramic can cause problems. You can always change the container to something more formal or decorative once you are in the home country. The ashes should be stored in a plastic bag inside the container, that can be easily taken out for inspection. And it goes without saying, do not check these items. Too many times luggage is permanently lost.
Wills and taxes
Research and legal advice is key to ensure your will is appropriate and legal in your country of residence and that you have considered all tax liability implications, but you may want separate wills to cover assets and minimize double taxing in different countries.
Inheritance laws vary widely in each country, and in some countries an individual is not able to dispose of their assets as they wish. For example‚ in France national rules exist that override any will you have made. A percentage of your assets will automatically go to your children (depending on how many you have, and whether you wanted to leave anything to them or not), leaving the rest for you to dispose of as you wish. In the case of property‚ this can cause difficulties for any surviving partner who may wish to remain in a property that becomes part of the children’s inheritance.
Planning properly can help you find legal ways to avoid these difficulties. For example‚ in France by leaving a ‘life interest’ in a property you allow a partner to remain in residence until their own death. It is a simple thing for a lawyer to draw up, but many people only figure this out after it is too late.
Things are extra sticky concerning taxes for expats from the UK. Let’s say that you left the UK permanently, you never visit the UK and are 100% considered non-resident for tax purposes there. Great. Just because you have lost your residency status in the UK, that’s not to say you have lost your status of domicile…and it is the latter that is important when it comes to inheritance tax for Britons.
If you were born in the UK, if your father was born in the UK, if you maintain a British passport and have significant ties with the UK such as a property in the nation or just family or a burial plot in the UK, then you maintain your nation of domicile as Great Britain. Most people never give this a second thought because for 99.9% of us, it is 100% irrelevant for all of our lives. But, in Britain, your nation of domicile ‘owns’ you and taxable access to your estate when you die. So, say you sell up everything in the UK to retire and buy a Spanish hacienda…when you die, the British taxman pops his head up to see how much your estate in Spain is worth and what the sum total of your worldwide assets is. If it is above the IHT threshold in the UK, your heirs will get a bill from the British taxman. This gets even more complicated as Spain will want their fair share as well (or more times than not, not so fair share). This means that all expats from the UK have to have a UK will in addition to one in their adopted country, to fully cover themselves.
Without a will, different countries, cultures and religions can also significantly impact financial and legal processes. Often bank accounts are frozen and the family is not allowed to (easily) leave the country if there is not a will in place. This is especially important in areas such as the Middle East where Sharia Law presides.
These are only a few examples of how life can be made incredibly difficult for your loved ones if you do not have a will or two in place. Take time to learn the specifics of both your home and adopted country. If you are living overseas, consider it a necessity to have a will drawn up – in the unlikely event that it will be called upon, it will make a painful and tragic situation at least a little less stressful.
For the terminally ill
For some of you, it may be important to know the assisted suicide laws in your adopted country in case you were to become terminally ill. Countries with more liberal attitudes and laws towards assisted suicide include, Belgium, Luxembourg, the Netherlands, and Switzerland. Spain and France have recently seen a lot of pressure trying to enact more relaxed laws, and may see changes in the near future. Make sure you have your wishes in regards to this clearly written, and it would not hurt to have an official translation into the language of your adopted country written up as well. And as with all other important paperwork, make sure that loved ones know where to find this paper in case they need it!!!
Organ removal
In some countries, for example Greece and Spain, organs may be removed during autopsies to determine the cause of death. This can be done at the discretion of a doctor, without needing the consent of the next of kin. Organs that are removed are not necessarily reunited with the body before repatriation. And if organ donation is something that is very important to you, you should look into the opportunities available for this in your adopted country, as your organ donation card from your home country may not be valid in your adopted country.
Here, we have only touched on a few of the many complicated issues that can arise when an expat dies overseas. I hope that you have been motivated to finish this article, and immediately look into getting your affairs in order. There is no better time than right now. It will never be a fun thing to do, it will never be convenient. Ever. So go do it now, get it over with, then go enjoy in peace those long, relaxing days that you retired abroad for in the first place.
About the author: Cathy Brown is a mother, writer, artist, teacher, traveller and explorer originally from Michigan. She has a serious case of wanderlust and currently lives in Argentina with her three amazing children, ages nine, seven, and five. She writes for and maintains Expat Daily News – South America and Expat Daily News – Central America
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