What to Know About Estate Planning if I Want to Retire Abroad?

A senior man is excited about retiring abroad after planning his estate.

These days, many Americans are considering retiring to another country. From 2007 to 2017, the number of people receiving Social Security in other countries rose by 40 percent. There are numerous reasons behind the urge to move overseas. Some people want to travel and see the world or move somewhere they visited before and loved. Others choose locales where their retirement savings will go much further thanks to lower living costs or healthcare. Whatever your reason for wanting to retire abroad, it’s important to have all your legal and financial plans aligned with your goals. You’ll want to make sure your will is still valid, your assets protected, and you’ve assigned someone to handle financial or business decisions if you maintain ownership or a controlling interest in retirement. 

Consulting an attorney about your estate planning is an excellent way to get started. The Van Dyck Law Group is happy to assist you with all stages and aspects of estate planning, from wills to trusts. If you have questions or concerns about planning for your overseas retirement, please contact us for a consultation today.

In the meantime, here are some frequently asked questions about legal planning for your retirement move:

If My Spouse and I Already Have Wills, Are They Valid in Other Countries?

It depends on the country, but in many cases, yes. 

There are two important pieces of legislation pertaining to retirement and estate planning that will continue in another country. The International Will Convention is a treaty created in 1972, in which signatory countries agreed to enforce the terms of wills created in other signatory countries. The US is one of these countries but requires each individual state to decide if it will ratify the treaty, and only 22 have done so. New Jersey is not one of them.

However, your will may be covered by the Hague Convention Relating to the Form of Testamentary Dispositions. That’s a lengthy title for another piece of international legislation about wills, in which signatory countries agree to recognize a will from another country if it adhered to internal laws:

  • Of the state or country where it was signed.
  • Of the nationality the testator belonged to, either when they signed the will or when they died.
  • Of the place the testator lived either when they made the will or when they passed.
  • Of the location where the testator maintained a residence, either when they wrote the will or when they died.
  • Where any “immovable” assets like real estate named in the will are located.

You can find a list of the 42 countries that agreed to this convention here. If the country where you plan to relocate is not on the list, or you’re unsure if your will meets all the above qualifications, ask your attorney about it. They can check on specific laws regarding the country you wish to move to, or help you draft a new version if necessary.

I Don’t Want Any Extraordinary Measures at the End of My Life, So I Have an Advance Healthcare Directive. Will This Be Valid in Another Country?

It depends on the country you’re moving to, but in most cases, the best solution is to create a new directive in that country, have it notarized, and make sure you have copies handy in case you are hospitalized. You should also ask your attorney about the particular country’s laws regarding healthcare directives, physician-assisted euthanasia for terminal patients, DNRs, or other topics you may have considered when planning your healthcare directive.

What About the Role of Trusts in International Estate Planning?

Placing assets in a trust is a good way to protect them in some situations. It may also be helpful if you want to provide for a child or other family member or make it easier for your assets to pass to your loved ones after your death. But what if you set up a trust in the US and later move overseas?

The Hague Trust Convention was established in 1992 and ratified by 14 countries. This convention broadly allows signatory countries to recognize trusts established in other countries. It also created rules for resolving any conflicts that arise regarding these trusts. The US has not ratified it, but under the terms of the convention, a US trust may sometimes be recognized by signatory countries. Again, you should check with your attorney about where you plan to move. 

Depending on the location, there could be other reasons to reconsider a trust. Some countries will technically recognize a US trust, but you may have to jump through many complicated hoops to make a simple transaction. There might also be tax issues related to having assets in a foreign trust – in other words, it could end up simply not being worth it. In some cases, your lawyer may be able to recommend alternatives to managing your assets without a trust.

What Will Become of My Remaining Financial or Business Assets in the US?

Perhaps you want to retire but maintain a controlling interest in the business you founded or hang onto some real estate in the US. In fact, most people will leave behind some business or financial interests, and it’s likely that these will need attention at some point. For these situations, we recommend an international power of attorney, which allows a person you select to make decisions for the property remaining in the US. You don’t have to be physically present or worry about what would happen if there was an emergency, like a fire in a rental building you own. The person with your power of attorney will make decisions and handle any financial issues that come up. 

A power of attorney can be continuing or non-continuing. A continuing power of attorney lasts indefinitely, unless and until you decide to revoke it. A non-continuing power of attorney will end on a specific date. People going overseas for vacation or business trip may choose a non-continuing power of attorney. If you plan to move abroad permanently, a continuing one may work better for you.

Trust in Van Dyck Law Group

When you’re ready to get your documents for your overseas retirement or learn more about your options, please contact Van Dyck Law Group for a consultation. Our estate planning attorneys can answer all of your questions about retiring abroad. Call today for a review of your options at 609-293-2562.

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