One of the last things you are probably thinking about is your estate plan. You just want to get to your island in the sun and start your new life.
But beware of certain issues when planning to become at expatriate (expat for short) and the difference between tax residence and domicile.
We know that there are significant differences between legal systems in different countries. To give an example, British people who live in countries of the Middle East are for the most part subject to Islamic law and that law would apply when it comes to how their estate is treated. This might mean that as an expat the law could divide your estate, your property and your wealth in ways that you never intended. Assets could go to someone that the expat never realized.
Once you establish domicile in a country, then Domicile typically decides where inheritance is paid and how (upon death) an expat’s estate is split. The laws of that country regarding property, bank accounts, etc. could override any will or estate plan of the United States.
In most countries, expats should prove they have no intention of moving to another country to show their domicile has changed. For example – if you are moving yourself from Wisconsin to Guata Guata, the relocation is permanent and you have no intention of returning to Wisconsin. This could mean relinquishing your U.S. passport; closing all U.S. bank accounts and selling Wisconsin property.
It is beyond the scope of this brief article to review all of the possible outcomes of becoming an expat. The best advice -
Discuss with a professional (financial; legal and international) the long term consequences of a permanent move/relocation to a foreign country. Know before you go, how the laws in that country could affect your estate plan and your beneficiaries.
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