Category Archives: Financial Records

Expat essentials. Writing a will. Defining Moves - The Art of Successful relocation. Information, inspiration and resources for the global expat family, trailing spouse, accompanying partner, global services manager, relocation service provider, destinations service provider.. you get the picture.

(Often Ignored) Expat Essentials – Writing a Will.

Yes, I know. You don’t want to think about it, much less talk about it, which is why I have been getting shifty looks from most of my expat network this week when I asked them the seemingly simple question: “Do you have a will?” Want to know how many people said “Yes”?

Two. Out of about thirty people, all of whom have high net worth, children from at least one relationship, and often dual citizenship / resident status. A little worrying, no? 

I can’t claim the moral high ground – we recently unearthed our Will, dusty from 10 years in an unmarked cardboard box in a storage container in Walthamstow. Not exactly accessible in the event of our demise, and even worse, was so out of date that the paperclip holding it together was rusty and the Feisty One was not even mentioned. So on her behalf, I am doing something about it… Here goes.

Expat essentials. Writing a will. Defining Moves - The Art of Successful relocation. Information, inspiration and resources for the global expat family, trailing spouse, accompanying partner, global services manager, relocation service provider, destinations service provider.. you get the picture. I have a new dirty word: intestate. For those of you who have been living a carefree life of blissful indifference, it’s what happens when you don’t have a will. For non-expats, the implications are unpleasant: it gives the state responsibility and control over the division of your estate, decisions about who will take care of your dependents, the timeframe it all happens and (of course) access to a large chunk of your assets via taxes.

It’s a simple fix – a Will. It’s the document that tells those left behind what you want to happen to your dependents and estate.  Most of us overthink it, imagining a torturous process requiring three weeks of desperate hunting for title deeds and old bank statements. Nothing could be further from the truth – the best wills are simple statements of intent, which give executors something to work with and a few clues about where you have hidden your treasure. Combine that with a good estate planning lawyer and you will create a plan that saves everyone time, money and heartache at a time when they are most vulnerable.

Introducing first part of the Defining Moves “Ducks in a Row” program. Our aims are simple:

  • To inspire you to act. Right now. Because this is important.
  • To get you to the lawyer on time. We want to prompt to you think, discuss, list and plan, so that any legal advice you get is based on reality, not just the bits you could remember in the car on the way to the lawyer’s office. And make sure that when whoever prepares your will asks a question, you know the answer and are not paying $300 per hour for them to watch you think about it / argue with your spouse / try to remember whether or not you mailed the last life insurance premium.

So grab your pencil and paper, and let’s get started…

 

Step one: The People.

There are three groups of people you need to consider when drafting a Will;

  1. your dependents
  2. your beneficiaries
  3. your executors

 

Dependents.

These are the people who rely on you for some sort of care, support and/or protection. Traditionally, these were children still living at home, but modern families are often complicated with blended families, shared custody arrangements, adoptive children, elder relatives and even pets added to the mix. Thankfully, lawyers have seen it all before, and, even better if you have a family as nutty as mine, are sworn to secrecy…

Make of the list of those who you are responsible for, whether physically, socially, financially or legally, and the type of care you provide. Keep it simple – the rest can be figured out later – at this stage, your task is to create a comprehensive list.

Now list any special circumstances that will have to be addressed.  For many families, this may involve shared custody, child support or special needs but for expats there may also be issues of differing nationalities, citizenship and resident status that may have tax and legal implications.

For those of you with your own business, bear in mind that you may also have professional responsibility for continuity of care of clients – check your licensing organization or professional code of conduct if you are unsure.

 

Beneficiaries.

Your beneficiaries are the recipients of your estate – usually immediate descendants, siblings, friends and charities. Typically, assets are divided equally between your children, so if you want to use a different split, make this clear to your lawyer so that they can prevent your will being subject to legal contest. Note also that laws differ about division of assets when you die intestate – half siblings, step and adoptive children are often treated differently, and the portion of the estate automatically assigned to the spouse varies widely internationally.

If you have any other people or organizations who you want to leave money to, add them to your list now.

 

Executors, Financial Guardians and Legal Guardians.

It’s your group of guardian angels, so pick wisely. These are people who you trust to administer your estate and make sure your wishes are carried out, to care for your dependents and to manage the finances of the beneficiaries if they are unable to do so. The roles carry huge responsibility, so discuss whether or not your intended choices are both willing and able. They can be family members, friends or lawyers; typically, lawyers are paid (and aren’t given custody of the children…) whereas family and friends are less likely to be.

Note that guardianship differs from child custody: while custody refers to the physical care provided by a parent (who may have no legal powers), legal guardianship may involve physical and/or legal custody, and continues until the child reaches adulthood or the guardian’s death. By contrast, especially in the modern family, custody is far more flexible and changes according to the situations of the parents.

Here’s where expats need to be especially careful, because the local laws may be very different to those of your home nation and custody / guardianship arrangements and next of kin may not follow familiar rules. In the UAE, for instance, if no will is in place, Sharia law prevails, meaning that assets and custody of children potentially follow the male line – your husband / partner’s parents, brothers and sisters. How is your relationship with your mother-in-law, by the way?

 

Step Two: The Money

Your estate is the sum total of your assets, and while many of you will be rolling your eyes that I am pointing out the obvious, I can guarantee that there will be plenty of things that you will have forgotten. The temptation is to run to the filing cabinet / junk drawer and fish out the most recent bank statement, and start noting down numbers, but don’t. Your assets are constantly changing, so you only need to include categories – current and savings accounts, property, jewelry stocks, shares, businesses, investment accounts, life insurance, digital assets (websites, videos etc) – and where those assets are held. For a starter list, click here for pdf cheat sheet.

While you are making your list, make note of who your beneficiaries are, and how they are reported. Typically, life insurance goes to the spouse, but in a world where divorce rates run at about 45%, there are a huge number of exes who are still listed as primary beneficiary. Take note, and make any necessary changes…

 

Step Three: The Decisions

Now that you have the information, you can start making decisions about how to pass on your legacy, human or otherwise. Your key priorities are the welfare of your dependents, so start with those and work from there.

Guardianship of dependents.

Who do you want to care for your dependents if you are no longer around to do so? Depending on the complexity of your family and the types of dependents, there may be more than one answer to this question, so set it all out clearly, naming each dependent individually. Talk to all the parties concerned before you head to the lawyer’s office – you may be surprised to hear who your children would hate to live with, or which relative is intending to move to Outer Mongolia next month – to prevent return visits. Factors that may affect your decision are not just emotional – also consider location (how will your children feel about leaving the country, for instance), age and health of potential guardians, relationship with other friends and family, support network and financial ability to provide care.

Include financial provision for your dependents and decide who you want to manage your estate for them if they are still minors. In many cases, life insurance helps to cover the cost of raising children, but once you include the cost of college education it may not go as far as you think.

Financial, legal and professional dependent provision will require discussion with your lawyer and with those who you nominate to take over; the good news is that if planned in advance, the process is straightforward (and certainly infinitely preferable to leaving your legal advisor / executor to try to unravel the mess in your absence).

 

Step Four: The Division

This is the fun bit, providing you have money to leave. But before you start divvying up between your offspring and the local cat protection league, here are a few pointers:

  1. Remember that your debts and liabilities (taxes, funeral expenses, etc) will be deducted from your estate before the remainder is distributed. You can offset many of these by establishing a Trust, which will will talk about in the next chapter, but for the moment, just remember to include your loans, debts and other obligations when you are cataloging your estate.
  2. Ensure that you own your assets outright before you will them away. Anything jointly owned needs careful consideration to avoid passing on a headache rather than a well-intentioned gift. If you hadn’t already discussed future plans with the co-owner(s), now is the time to do so.
  3. Now is not the time to make a point. Sure, you may have favorites, but remember that in many cases you are not just leaving behind a bequest, but a lifetime of family discord and ill-feeling – not to mention legal challenges. It may seem a lovely idea to leave the bulk of your estate to your newest grandchild/ favorite nephew or next door neighbor, but the resulting fallout can often sour the best of intentions. The same rules apply for property – find out which mementos, furniture or jewelry are most loved by your friends and family, and divide accordingly, informing all of them who has been given what. That way, any discussions, disagreements or disappointments can be directed at you, rather than unwitting recipients.
  4. While we are on the subject of leaving objects to people, think carefully about whether they want them, and the responsibility you are handing over. It’s difficult to part with things, no matter how ugly, unwanted or expensive to maintain without feeling disloyal to the person who gifted it.

Now you have done the difficult bit, it’s time to put pen to paper and make a rough outline to take to the lawyer’s office. If you are an expat, you may be advised to get legal input from both your home and host nation perspective – while the laws of your home nation usually take precedence, extended residence overseas may change the rules, so be sure to explain the situation rather than making assumptions.

You need to include:

  • Your name, and identifying details (usually your address, but if you are an expat, you will need to clarify your domicile (primary place of residence) with an experienced lawyer – it has significant tax and legal implications.
  • Names of beneficiaries; the people and organizations you want to leave your assets (whether money, housing, land, stock options, digital assets etc ).
  • The name of your executor (the person responsible for making sure your wishes are met).
  • Guardians of your dependents – Legal and physical.
  • Who gets what.
  • Your legal advisor should also include a “residual clause” that states the recipient for any assets you forgot to mention, or have been accrued since you wrote your will. “I bequeath any residue to” should take care of it.
  • Signature and date, with initials and date on every page.

Congratulations if you made it to this point- you are well on your way. In the next post, we’ll be introducing the fun stuff.. Planning your funeral, Living Wills and frustrating the tax man.

Bet you can hardly wait.

 

Further Resources:

Nolo.com – Legal encylopedia – Wills

USA.gov – advice on writing both social media and regular wills.

UK Citizens Advice Bureau information on writing a will.

Australia. gov – Resources on wills and power of attorney

The Fragile Finances of the Expat Trailing Spouse. Defining Moves, The Art of Successful Relocation

Women, Money and What ‘Dependent Partner’ really means. The Fragile Finances of the Expat Trailing Spouse.

The Fragile Finances of the Expat Trailing Spouse. Defining Moves, The Art of Successful RelocationUpdate: After considerable lobbying from consumer groups, the US Bureau of Consumer Financial Protection has amended the rule requiring evidence of independent income when applying for consumer credit, replacing it with a declaration of household income. This is excellent news for accompanying partners in the United States who had been denied access to credit and left unable to build an independent financial identity, in a country where a credit card or credit history is required for everything from hiring a car to setting up a cell phone contract. Sanity is restored…

I came to a horrible realization the other day that I was beholden to my husband. It sounds incredibly old-fashioned; even using the word ‘partner’ in that sentence would be wrong, because it implies an equality that I had let slip away.

The dictionary describes the term beholden as owing something to somebody because of something that they have done for you’, so if you view being shuffled from pillar to international post as a favour, the word pretty much covers it. I realized that although I live in California, where community property and a 50/50 division applies, I did not have the independent means to pay for legal advice. And when he leaves all his dirty breakfast dishes on the counter above the dishwasher for the 5 millionth time, there is a big emotional difference between don’t want to divorce my Other Half, and CAN’T…

As with the vast majority of dual career couples, when I agreed to the OH’s first relocation, I was aware that from now on my own career would take a back seat. Global mobility research discusses the change (usually reduction) in income when a couple relocate, but discussion centres around household income, rather than individual earning power.

Which is exactly what I have lost. I have never worked in professions known for lavish salaries (nursing or teaching, anyone??), but I was able to earn significant personal income with opportunities for promotion. Now, however, my sole income in drawn from the ‘household’, and as such, is vulnerable. And I’m not alone.

It’s not just those of us who relocate that are in this position. It’s anyone who has chosen to reduce or give up work to manage family commitments, whether you are in constant global motion, or have never set foot outside your home town. If you have no independent source of income, whoever earns the salary holds the keys to your supposed household income.  And while you are legally entitled to a portion of those, it requires court approval to gain access to them, whatever the circumstances. Which also requires legal counsel, who (funnily enough) will want to be paid.

Take credit cards. Over the last 20 years, we have become used to being approved for credit, regardless of our personal income; the household income has always been taken into account. Sure, the credit limit may be small, but it’s quickly increased once our payment history shows our ability to make payments and manage the account well. However change is afoot, certainly in the US, where credit card issuers are changing their rules, and making it far more difficult for the accompanying partner to gain credit (and a good credit history), unless they are employed outside of home.

Last year, the Fed ruled that credit card applications should ask about a consumer’s individual income or salary rather than his or her “household income”. This isn’t just for students under 21, but for everyone. That means that a stay-at-home parent is considered as unworthy of credit as an unemployed college kid–and seven out of eight stay-at-home parents are mothers. No one without a pay stub, no matter the value of her contribution to her household, can get a line of credit unless her spouse cosigns the account. (Anisha Sekar,  July 7, 2011)

Now, in light of the recent economic meltdown, placing more focus on individual income and ability to repay debts is no bad thing, but it does have ramifications for those of us who suddenly lose the ability to get even the most basic forms of credit like a cell phone contract or credit card. It also means that unless you are named on the account, you lose the ability to make financial decisions, access accounts and resolve disputes, which if, like mine, your partner spends a great deal of time out of the country and on air flights, can make financial management impossible.

The Other Half is also the primary name on the host country bank account, and I don’t have automatic access to his account. Typically, he goes ahead to take up his new post, while I remain behind with the children to finish up the school year and pack the house for the move. It works well for us, but does mean that he has sole responsibility for setting up basic financial services in the new location, so it is his name on the salary transfer and tax details, and therefore his name on the account, at least until we get around to updating it.

We choose to manage this by having me sign all the checks (if he signed one himself, it would probably be dismissed as a forgery), I have the ATM card and PIN number, and I’ve set up the internet banking with my passwords. And while this unusual state of affairs makes for amusing dinner party conversation, it gives me absolutely no legal right to the household funds in that account, nor access to them should he suddenly develop amnesia / get run down by a London bus / decide to trade me in for a younger, blonder model…

The mention of Tax ID and salary above should alert you to the fact that opening your own bank account is not necessarily as easy as it first appears. Requirements vary from country to country, but most require evidence of who you are, your legal right to be in the country, how you will pay tax on any interest, and how you intend to fund the account. So when you turn up with your passport and cash, you may be disappointed… However, it is something that is worth doing if you value your sanity, because things can and do go wrong, and I am willing to bet that it is you who will be left holding the can when it does. If the money is in your sole name, you have control over it; if it’s not, you don’t. Simple as that.

And finally, let me mention the dying thing. I have known a few situations where a spouse has died at a young age, and not once did I ever hear the words “well now, let’s get on and sort out the money”. What I saw were people who had their lives knocked out from under them, who were trying to cope with immense loss, overwhelming grief, and devastated children. Imagine how much worse it gets when you are overseas, your right to be in the country expired with the demise of your spouse, and all your assets (and therefore your ability to get home, to make funeral arrangements, to pay medical bills and to pay for normal household expenses) are now severely compromised. I have seen it happen, and it was horrific.

So, if you do nothing else today, do these things for me, wherever you are. Get started on your own personal credit history, even if you have to take out a secured credit card to do it. Promise to keep track of your credit score, every month. Get an independent bank account in your host country, and commit to funding it, every month. And finally, make a joint will, keep it simple and safe, and make sure it is legal in the country that you live in.

Oprah would be proud. I feel more secure already…

8 Rules for creating an expat budget. Defining Moves - the art of successful relocation. Information, inspiration and resources for the global trailing spouse, accompanying partner, expat partner.

8 Money Rules for Creating Your Expat Budget

8 Rules for creating an expat budget. Defining Moves - the art of successful relocation. Information, inspiration and resources for the global trailing spouse, accompanying partner, expat partner.It’s Part 2 of the “8 Money Rules for Creating Your Expat Budget” post – if you missed the first part, you can read it here.

 

5. Protect Your Credit

So you think paying your bills on time is enough to get an excellent credit rating? Think again. Credit companies don’e release the formula that they use to compute your credit score, but it is a combination of length of credit history in the location (strike one- you’ve only just arrived), range and types of open credit (strike two, because you can’t get credit easily due to lack of credit history, documentation, etc etc.), ratio of credit balance to availability (strike three – any credit cards you do manage to open will have tiny limits – think $300).

The bad news is that your credit score is used for everything from renting a home to getting a cellphone contract to job applications, so you can’t avoid it. The good news is that account management has the greatest positive impact on your score after length of history and range of loans, so set up direct debit payments for at least the minimum payment for every card.

This doesn’t mean we are giving you permission to carry balances from month to month – what we are doing is protecting you against memory loss, jet lag, time zones, and general expat chaos – all things that make it very easy for due date to slip by unnoticed, until your credit score plummets like a lead balloon.

There’s a final warning, however; don’t neglect your credit back home. For large loans, many global banks will do an international credit check, which is great news unless you forgot to put your other payments on autopilot and the now overdue bills are lost somewhere between here and Outer Mongolia..

 

6. The Expat Emergency Fund

No matter how culturally aware, linguistically talented or globally experienced we might think we are, I have yet to meet an expat, HR manager or Global Mobility Specialist who can predict the future, despite what we would have you believe. Instead, we focus on the assignment, assume that everything will go perfectly and rely on finely honed problem solving skills to get us through. Predictably, it’s a monetary recipe for disaster, so you need include saving an emergency fund in your budget now.

The financial gurus will advise you to aim for and emergency fund equal to 6 months of living expenses, with an additional allowances for dependents or if you work in a highly specialized field.

For expats, what constitutes 6 months living expenses can vary greatly, and so we need to err on the side of caution. If an overseas assignment ends early, you have significant additional costs: the cost of repatriation, temporary accommodation, down payment on a home / rental deposit, household goods (especially electrical items), location appropriate clothing. Repatriates face not just the financial implications of finding a new role, but finding a new home and a new way of life.

As a guide on what your long term emergency fund should look like, use your country of citizenship as a guide – while you may be able to live more cheaply elsewhere, you are not guaranteed citizenship, especially without employment. Take into account the cost of living, but also include a figure for transportation of yourselves and your household goods and pets, housing deposits (if you don’t already own a house), temporary accommodation, health insurance (if your country doesn’t have a national health service) and interim job search costs.

The good news for those of you who don’t suffer redundancy, early termination of assignment or other loss of primary income is that you have an emergency fund that will see you through almost anything expat life throws at you. And if you think expat life is all warm milk and puppies, you might want to head over to the Expat Life and Laughter section for some timely reading..

 

7. Think Long Term

Bottom line – the average lifespan of the international assignment has us all focusing on the short term, but our nomadic lifestyles mean that we should be paying more attention to long term planning than our less transient friends. Why? Extended or repeated expatriation can mean losing eligibility for home nation benefits such as healthcare, resident school and college fees, and even (should there be any left by the time we retire) state pensions.

Expats should be putting at least 10% of their income into retirement savings; even more if you change jobs frequently, plan on retiring outside of your home nation or somewhere with a high cost of living. Younger expats also need to budget for college fees for children, especially if their career path takes them through the US.

The good news is that many expats are eligible for tax free savings and investments accounts if they reside outside their home location for a named period, however you will need to get advice from a reputable investment advisor who is familiar with both your long term lifestyle goals and the tax rules for your country of citizenship.

 

8. Insuring Against the Unknown.

Somehow, we always seem to come back to the tricky subject of what happens if the worst happens, but it’s one of the most important pieces of your expat financial plan.  Life insurance for both partners is vital – while often only one partner is a direct income earner, that ability to fulfill the demands of the role is facilitated by the supporting partner.

The fundamental questions to ask about life insurance include length, value and cost of the policy, how premiums / eligibility changes according to location, health and age of the policy holders, and in the case of company provided policies, what happens of you leave the company?

You may also want to consider long term care (LTC) and disability policies – while not often included in employment benefits, they are extremely important, especially in light of the rising cost of health care. They will need careful consideration – many policies will exclude specific locations, activities or have requirements for redemption, so make sure that any policy you take out accurately meets your needs. More expensive premiums are infinitely preferable to risking a denied claim.

 

If it all seems overwhelming, don’t panic. We’re not expecting you to get everything done today, or even this week or this month. The most important thing you can do is something; most of the items on the list take under an hour to get set up and get started, and once automated, can carry on building quietly in the background. As for the rest? It’s up to you..

 

Additional Resources

The Household CFO – A Financial Guide for Expat Spouses.  Excellent basic guide to expat finances, from highly respected financial advisors writing in a way the rest of us can understand. (Email address required)

Credit Karma. Free credit score access with no pull on your credit record. (Email signup required, but the emails are rare, and are a very helpful reminder to check your credit)

Five Free Financial Favorites. Previous post with links to some great resources (including Credit Karma)

Creating a Relocation Budget. Defining Moves, the Art of Successful Relocation. Information, Inspiration and Resources for the Global Trailing Spouse, Expat partner, accompanying partner.

8 Money Rules for Creating a Relocation Budget

Creating a Relocation Budget. Defining Moves, the Art of Successful Relocation. Information, Inspiration and Resources for the Global Trailing Spouse, Expat partner, accompanying partner.
Creating A Budget. Striking error in our hearts since 1917..

Relocating plays havoc with your money; the cost of moving, the unpredictable expenses, the loss of local financial history and the soaring banking costs all make creating a relocation budget the greatest work of fiction since Harry Potter.

Despite the uncertainty, financial preparation and clarity is vital to a successful global transition, because if you think cultural orientation is challenging enough, try learning the Mandarin for “Why has my card been declined?”.

So for those of you considering (or already) living overseas, here’s part one of the  commonsense rules to follow for creating a relocation financial plan.

1. Budget no more than 25- 30% of your net household income for housing

– including rent or mortgage, property  tax and insurance and security services. While this may seem low, it gives you greater financial flexibility, so when other unexpected costs crop up, you are well prepared.

It’s especially relevant for homebuyers – while corporate assignment contracts often include a buyout policy, in the current financial climate you may get offered far less than you expect, or even be ineligible for the program. Check the fine print carefully before you buy if you may need assistance when selling or if you move on short notice – but for maximum security the less income you have tied up in property when you lead a nomadic life, the better. Read The Golden Rules of Expat Housing – Buying a Home.

2. Make friends with your tax advisor.

Expatriate taxes are complicated and while you need a qualified tax professional to oversee them, but don’t just relinquish responsibility.

Their priority will be to complete your taxes in a timely and accurate manner, but they have a wealth of information and experience relating to your tax breaks and liabilities for future plans and destinations and can help you avoid making costly mistakes. Higher education and retirement costs continue to rise, and with expat life comes the uncertainty of where these costs will be incurred and what support (if any) is available locally.

Most locations have tax free savings or investment policies for retirements, college funds etc., but you need to get independent expert advice to help you make the right choices. My personal favorite? Grant Thornton, for their knowledgeable, down to earth, easy to understand approach.

3. Plan for the Relocation “Money Roller Coaster”..

Changing location means fluctuating expenses – often much larger than you expect. Healthcare, school and college fees, retirement, cost of living and tax liabilities all vary hugely between locations and having a financial cushion can be the difference between all going well, all going into debt or all going without.

Don’t confuse this with your emergency savings account (for more on that, see part 2);  this fund is purely to manage expat related expenses that you can’t accurately predict. Anything from last minute flights home, the extra security deposit because of your pets or extra tutoring for your children – all are common expenses that most of us will have to cough up at one point or another, so forewarned is forearmed.

Once the dust has settled in your new home, add up how much you spent relocating – it doesn’t need to be accurate to the last penny, just a rough estimate. Divide this figure by the length of the assignment in months, and set up an automated bank transfer to a separate ‘transfer expenses’ account.

If the amount seems terrifying, don’t panic. Even $100 per month over the course of a 2 year assignment will net over $2400, enough to handle most short term expenses. The key to remember is that something is better than nothing, and the earlier you start, the bigger your cushion will be.

For a guide to cost of living expenses, use Xpatulator.com as a starting point but remember to take into account your individual family needs. While local clothing or groceries may be cheap, your preferred brand of  breakfast cereal, school wear or laundry detergent may be far more expensive than the index suggests.

4. Don’t Get Used To Expat Packages.

The days of the longterm expat living in one location for 10 years or more are over – nowadays, the trend is for shorter term assignments or moving the long term employee onto local, local plus or ‘expat lite’ programs. These packages may look seductive on paper, but they are designed to reflect the actual cost of living rather than as a perk.

While your income seems larger in the short term, you are exposing yourself to longer term financial challenges (potential loss of spousal income, international college fees, privatized healthcare and changing pension benefits to name a few), so explore the long term impact of your assignment and budget accordingly before you assume your increased income is disposable.

Read 9 Essential Questions Every Expat Should Ask  and

Don’t Let Your Expat Dream Become a Financial Nightmare.

 

Coming Next: Protecting Your Credit, Life Insurance, The Expat Emergency Fund, Long Term Plan.

Expat Essentials: Safeguarding your longterm health, finances and family. Defining Moves - The Art of Successful Relocation. Information, Inspiration and Resources for the Expat Trailing Spouse / Accompanying Partner

Not Just For Expats: 3 Ways to Safeguard Your Life, Health and Family at home and abroad.

Not Just for Expats - 3 steps to safeguard your longterm health, family and finances. Defining Moves The art of successful relocation
My version of long term care

This post was sparked by an episode Mad Men –  a series about adverting executives in  New York in the 50’s and 60’s.  This particular one covered the characters’ responses to the Cuban missile crisis.

Kennedy was had just given his famous television broadcast, highlighting the potential threat to the US from the Soviets, plunging the characters into a frenzy of uncharacteristic behaviors.

In justifying their sudden need to fulfill life dreams and expectations, one of the characters made the comment:

” We might not be here tomorrow”,

to which the reply came;

“Isn’t that always true?”.

We all applaud the idea of living each day as if it were your last, but are incredibly naive about what that actually means. Most of us imagine finally parachuting, walking the Inca Trail or any other number of ambitious, death defying activities listed on our bucket list. It bears little relation to the reality of life and death.

The concept of seizing the day is reliant on good health, or at least mental consciousness, the absence of pain, and a considerable amount of forward planning. If I ask how many of you have checked your medical records, understand your health insurance rights and coverage, or have an advocate who knows your wishes in the event you are unable to make decisions, 97% of the room start twitching nervously and suddenly find their notes fascinating. Sound familiar?

For those of you who are now in a state of panic, let me reassure you. You don’t need to start visiting psychics, ordering crystal balls or trying to predict every eventuality – in fact, the simpler you keep it, the better.

To get you started, here are the three essentials to consider:

 

Health Insurance for Locals and Expats Living Overseas.

For those of you who don’t live in a country with a National Health Service (and for many of you who do), for any travel abroad or residence overseas, health insurance is essential. While many services and regular care can be contracted more cheaply without going through an insurance service provider, for the expense  of chronic, emergency and long term health coverage, you need a safety net.

Sadly, most insurers are for-profit businesses, which means that they are careful (and in some cases, downright difficult) about handing out money, and have many ways of avoiding or limiting it. Not being completely honest about your age, activities, destination and current or previous health is the fastest way to get your claim rejected and end up with a huge bill.

Pre-existing conditions, so-called ‘extreme sports’ and high risk behaviors (i.e. drug taking, using prostitutes) are common exclusions and many policies only cover your host country. They often specify services and providers that you can use, required co-pays and ineligible treatment and procedures. This means that either you personally, or your family, will be liable for any healthcare costs not met by the insurers, and these can stack up really, really quickly.

The basics to consider include:

  • What exclusions apply to your policy, and are they relevant to your situation?
  • What are the insured maximums, and what does that really mean in terms of local care?
  • Are you covered for transport home?
  • In the event of your death, will your remains be repatriated or is that the responsibility of your next of kin?
  • If you have company insurance, how are your benefits affected if you are no longer able to work or have to terminate your assignment early?
  • What happens if care is not available in your host country? Will you be sent home, or to another country, and if so, can family members accompany you?
  • If you are taken ill when overseas, are you covered for a family member to join you? Who will look after the children? Who will be your advocate? How do I make my wishes known in a way that is legally binding?

 

In the event of serious or long term illness, where do you want to be?

Common wisdom dictates that we like to be surrounded by our nearest and dearest, but for some, that qualifies as the one of Dante’s Rings of Hell.

As Greta Garbo is famously uttered “I want to be left alone”.

Most of the time the answer is “wherever I can get the best care”, but the reality is harsher and involves finance, family, support and legal residence issues.

For working expats, the decision is often taken out of their hands – once you are no longer able to work, your visa is invalid, and you are repatriated. For those permanent overseas residents the choices are wider, and many choose to stay where care is cheaper and there is less pressure on family members to be full time caregivers.

Returning ‘home’ is often not as easy as it seems, and may require significant adjustment –  repatriation is difficult under the best of circumstances, so expect a period of transition for the whole family, especially if you have been expats for a long period. Consider both mental and physical health needs for all the family – there are many excellent counselors that can deal with adaptation and coping issues, both for you, your partner and your children. x

Before you take the decision to move back, you will also need to check that you are entitled to healthcare benefits – either though the national health service or via your insurance – before you move; many insurance companies will not cover people with certain pre-existing conditions or will demand high premiums, and your expat insurance may only include your host country. Consider also what is included, whether it is just urgent care, inpatient care or ongoing long term care – and also, the standard of care and and waiting lists.

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Do you have an Advanced Directive of Health Care?

More commonly known as a Living Will, this document defines who will make decisions for your care in the event that you are unable to do, and sets guidelines for your care. We tend to assume that here only apply if we have a serious debilitating illness, however having a stated person to advocate for you is invaluable for acute and emergency medical conditions too – whether you are simply under anesthetic, unconscious, in severe pain or have temporary amnesia.

Your advocate doesn’t have to be your life partner – I have chosen my sister for four reasons: firstly, we have similar decision making processes; I would rather that my partner was free to concentrate on his own needs and those of the children; she has a great relationship with my partner and I trust her to make the best decisions for both him and I without being burdened with guilt and expectations, and finally she has a great sense of humor, and if anyone can find the laughter in any situation, it’s her.

Many doctor’s offices have ADHC template forms that you can complete, but it’s worth getting legal advice – many terms vary between states and countries. Use simple language to eliminate the chance of misunderstandings, be specific about your intentions, state what treatments you are and are not willing to receive (especially in countries with different health standards and practices), nominate a healthcare proxy (someone who you trust to make decisions for you) and ensure that they understand, agree and that their contact details are accurate and finally, get it witnessed, preferably by someone with legal standing.

 

Expat Essentials: Safeguarding your longterm health, finances and family. Defining Moves - The Art of Successful Relocation. Information, Inspiration and Resources for the Expat Trailing Spouse / Accompanying Partner
How my children see it..

Ill health happens, and never when we expect it. When it does happen, it’s a knee jerk, all hand-on-deck approach, dominated by the need to get care quickly, the demands of the medical staff and the fear of the unknown. It is always inconvenient, unexpected and bewildering, and as a former nurse I can tell you that the last thing your partner or loved ones want to be doing is second guessing your choices. They need to know what you would want, and they need it in writing. It needs to be discussed, agreed upon, written down and easy to find. You can change your mind at any point, but we all need somewhere to start. 

And as a final piece of advice, bear in mind the words of wisdom from Phyllis Diller:

“Always be nice to your children – they are the ones who will choose your rest home.”

 

Expat Housing - Renting a Home. Defining Moves - The Art of Successful Relocation

The Golden Rules of Expat Housing – Renting a Home

Expat Housing - Renting a Home. Defining Moves - The Art of Successful Relocation
Make sure that everyone involved understands your housing needs.

It’s a time of turmoil in the Defining Moves household. After 14 years, we are finally selling our family home in Wales and transferring our home status to the US. It’s a funny feeling – despite living in six different homes since leaving, the process of finding and buying a new home away from “home’ is daunting.

The summer vacation is the peak time for family relocation; it’s the end of the school year, so educational transitions are easier, and you have more time to accomplish the endless tasks that moving yourself, your life and your family requires. With this in mind, I’ve put together a collection of golden rules garnered from international expats (I hesitate to use the term experts when there are quite this many blunders involved.) across the globe. Every one represents one of us learning the hard (and usually expensive and/or stressful) way, so take note. Today we feature renting properties – on Saturday, it’s the turn of the homebuyers..

N.B. If you are relocating with children over the summer, read this first.

Do your research.

Even if you have a Destination Service provider or relocation counselor assisting you with your search, don’t hand over all responsibility to them. Check out online rental listings, contact local realtors and ask amongst the expat community, international school networks and amongst work colleagues – often property owners use word of mouth or private advertising to find tenants independently, and you will get a much better idea of what is available and what you can expect to pay if you do a thorough search.

Understand what is both usual and available in your host location. In the US, for example, for a room to qualify as a bedroom it must contain a closet. In Europe, there is no such rule, and storage tends to be more limited, en suite bathrooms far less common and kitchens more basic. You are also more likely to be doing the yard work yourself, so be warned.

Check the standard of construction, even in newer housing, especially in less developed countries. While the houses may seem new and shiny with every modern amenity, leaky roofs, substandard electrics and insufficient water supply are very, very common. Where the local infrastructure is poor, ask to see the water supply and storage system (and whether it is mains, brought in by tanker, from a bore hole etc.) and how it is pumped into the main house. For electrics, ask to see previous bills, note whether there is a generator and look at the quality of installation. Is the property on mains sewerage or a septic tank, and when was it last emptied? And finally, from bitter experience, check for stains on the ceiling and around the floors to see what happens when the rains come..

Look at lots of properties and meet either the landlord or the property manager in person. If you don’t feel comfortable with them now, imagine calling them when the toilet backs up at 10pm.. Reputable landlords will be happy to supply references from former tenants (it’s even better if the former tenant is showing you the property), so don’t be shy about asking for them.

 

Get your finances in order

Most landlords will run a credit check, and it’s easy when transitioning between countries to lose track of payment due dates, utility fees – even medical bills. Once a bill falls 30 days past due (and sometimes even earlier) it shows up on your credit report and can negatively affect your credit rating, score, interest rate qualification criteria, home insurance rates and how you are viewed as a potential tenant.

Safeguard your international credit score before you leave your home location, by clearing any outstanding debts and payments, and set up direct debits or standing orders for ongoing recurring payments. When you arrive in your new location, get a secure PO box for mail forwarding rather than using the interim housing one – one glance in ‘your’ mailbox will tell you how many former tenants have been through and are still getting mail to that address. Then consider taking out a secured credit card, cell phone contract or other available credit to get your score started as early as possible. Take professional advice before taking out any credit – even a store or fuel card – if you plan on applying for a home loan. Every credit check, successful or not, has a negative impact on your short term score, which pushes up your available interest rates ..

 

Lifestyle Priorities

One of my wise friends gave me the advice to ‘shop for neighborhoods, not homes’, so spend some time working out what your priorities are before you sign on a six month tenancy agreement. For those of you with children, schools will almost certainly be at the top of the list, but also consider what will be beneficial or frustrating in day-to-day life. Parking, low traffic, good local amenities, parks, access to of leash dog trails, a diverse community with local events, libraries and good food are all on my list, but you may be looking for sports facilities, a supportive expat community and nearby shopping. The choice is yours, but make it before you drive the realtor mad, hey?

If you are staying in the same location for an extended period of time, consider the longer term costs. Many expats transfer to local payroll while still overseas, and allowances for private schooling, airfares and housing change. Will your income support private schooling long term – and if not, what are the local schools like? What college fees will you pay? Recent studies have shown that many expats’ current lifestyles are affecting their long term financial health, so don’t fall into the trap of living beyond your actual income and relying on expat allowances for the rest of your working life.

 

Consider the costs.

I love cathedral ceilings and picture windows. After two years in the East Bay area, with it’s 90 degree summers and breezy winters, I’m very, very glad that utilities are included as part of the tenancy agreement – especially when you have 79 internal light fixtures, not including lamps. Seriously.

There are the obvious costs, like transport into town or school, availability of public transport, memberships and maintenance fees, but there are also the ‘keeping up with the Jones’ costs that sneak in. The more affluent the community, the greater pressure there is to maintain the same standard of living, entertainment tends to cost more, and the local services, stores and amenities will cater to a higher disposable income. You have been warned..

 

Paperwork

Read the contract, and get professional advice about the local rules for both tenants and landlords. In many cases, the contract is difficult to enforce without a lengthy and costly legal battle, but it does serve as an early warning system of how experienced, knowledgeable and trustworthy your landlord is. A basic contract should include at the very least a name and address for both parties and the home for rent, the rental sum (and what it includes in the way of utilities, furnishings and any other applicable fees), the duration of the tenancy, the responsibilities of the landlord and tenant (garden maintenance, gutters, etc), any rules the landlord may have regarding treatment of the property (picture hanging, use of candles, parties etc) and an inventory of condition and contents of the property.

Before you sign, check whether the property is in financial good standing (your realtor or destination service provider should be able to help you with this) – tenant evictions because the house is being repossessed by the lender are increasing, and you have both the inconvenience of an unscheduled move and a lost deposit.

Do a move-in walk through with the property manager or landlord before your household goods arrive, and take lots of pictures, especially of any wear and tear or damage. And finally, get a receipt for each and every payment (especially the deposit) or at the very least, have a clear official record of the transaction.

 

Security

It’s our final piece of advice, informed by the experience of a friend of a previous tenant walking in unannounced at 7 am. Ask the landlord to change the locks. Establish who else has a key or access to the property – cleaners, gardeners, property managers, landlords – and what are the rules for permission of entry. Our front doors are the most basic form of security, and yet it’s the one thing that we all forget or take for granted. If you have an alarm, get instructions on how to change the code, and do it the day you move in. And then don’t do as a friend of ours once did and write the code on a Post It note next to the keypad. Hmmm.

 

 

Essential Expat Information - The Hidden Costs of Relocation - Defining Moves, the Art of Successful Relocation

The Hidden Costs of Relocation (and how to reduce them)

Essential Expat Information - The Hidden Costs of Relocation - Defining Moves, the Art of Successful RelocationWe never manage to move cheaply. We’re on our seventh home in 11 years and currently looking for our eighth, so you would think we would be experts by now. But relocation is an expensive business – the packing, shipping, storage, tax filing, document preparation and transportation are just the tip of the iceberg.

We get wooed by the mouthwatering figures presented in the relocation package, and at that point, grown adults start confusing their employer with Santa Claus. They’re not – those figures have been created by a calculator loving accountant somewhere, and have not been put together with the sole purpose of making you happy. Quite the opposite, in fact – they reflect the minimum sum that the company feels is appropriate to get you established wherever it is you are going. And by established, they are not referring to the new Laura Ashley room set that you have been drooling over.

So, after reviewing three years of detailed accounts from the Defining Moves household, here are our top ‘hidden’ costs of relocation, and what you can do to reduce them.

 

Paying off past credit.

It’s money that you have already spent, but it’s still a cost to consider as part of your relocation package, because I’m pretty sure that if you read the small print, you will discover that credit companies take a dim view of you leaving the country.. When you took out that kitchen / bathroom / Laura Ashley credit agreement, the three years interest free credit seemed like a good idea. Now you are stuck with a hefty bill and maple cabinetry 3000 miles away..

What you can do. If you are even thinking of relocating, don’t take out loans without having the money to pay them off immediately. Your loan contract will almost certainly include a residence clause, you will need money to relocate to your own new home, and if you are planning on renting out your house, you are going to need an emergency fund if your home is empty, damaged by tenants or requires emergency repairs.

If you think you need to spend money on your home before selling or renting it, consult a property professional before you actually get out your wallet, and consider carefully the return on any financial investment.

Interim cost of living.

Most assignments allow for 4-6 weeks of interim living allowances, but it’s easy to go over budget once you are there. Typically, you are spending time looking for more permanent accommodation, finding your way around and getting established and you don’t have the time, the facilities and the storage space to cook for yourself. Your entertainment tends to be outside the home (i.e. cinemas, restaurants, shopping malls) and costly, and you are potentially paying for storage of your household possessions.

What you can do. Try and find interim accommodation with a kitchen and enough food storage to avoid daily trips to the grocery stores. Consider taking packed meals with you on days out (yes, I know I sound like my mother, but has anyone else ever noticed that when hunger strikes, the nearest cheap and healthy eatery is 25 miles away / back at the previous freeway exit?). If you are going to be eating out for at least one meal, make it lunch – typically you pay between 25 – 35% less for a similar meal at lunchtime, and portions are often smaller. Your wallet and your waistline will thank you.

Find your local library and parks, so when you are desperate to escape the confines of the generic wall color and furniture, you don’t need to pay for it. Consider joining a class, club or volunteer group so that you are meeting people – anything that gets you out without a price tag attached.

The Cost of No Credit.

You would think that in the world of the internet, email and instant access, business and financial services would be able to establish your creditworthiness over a wider geographical range. But no, while hackers in China can access your accounts and make merry with your credit cards, the financial establishment can only judge you on your local credit history. Which, bearing in mind you have just walked off the plane, is precisely zero.

This has a huge impact on your local expenditure. In the short term, you will be putting down hefty deposits for everything from cell phones to utility services, will struggle to get any sort of credit card, and will be paying international fees for any transactions using your home country bank account or credit card.

In the longer term, any loans that you try to take out will be at a higher interest rate, and will usually require a large deposit to qualify.

What you can do. Many banks now offer global accounts, so if you are going to be paid in your home country currency, consider applying  – especially if you will be transferring money regularly. If not, there are many reputable online Foreign Exchange providers who offer far better rates and easy to use systems. Test them out with small amounts first so that if something goes wrong, you haven’t lost an entire month’s salary.

If you are planning on using your existing account for international transfers, negotiate rates and ask about rate thresholds – often there are better rates for larger amounts.

 

Home Furnishings.

Anyone who has relocated before will tell you that for the first 3-6 months, their living expenses skyrocket. Setting up a home is expensive – which is why we have bridal showers, baby showers and wedding gift registries for newly weds. If you are lucky, you have the slightly less exciting interim allowance, which covers the basic cost of reestablishing residence, but doesn’t allow for the cost of making it into a home. It also does’t allow for the considerable time pressure, which is why when we move we tend to head for the nearest department store and get furnishings that ‘will do for now’, with the intention of replacing them later. Not only do we end up paying full price, we end up paying out twice.

What you can do. Research home stores before you go, and if you can see that items are expensive or difficult to find, consider adding them to your household goods shipment. Avoid shipping things that require specialized parts / care / refills unless you have regular visitors from home who are willing to act as couriers.  Find out where locals buy home furnishings and when the sales are on. Consider outlet malls, consignment stores and borrowing items for the short term. Look on local noticeboards for “Moving Sales”.

Brand Awareness.

When you live somewhere, you develop a store / cost hierarchy, which assigns quality and cost to items sold in a store. If we want something cheap that may not last, we head to Walmart. If we are willing to pay more for something more permanent, it might be Pottery Barn, Marks & Spencer’s or a local department store. If alcohol is involved, we may find ourselves in Restoration Hardware.. Whatever your home location, you have preferred stores that carry the brands and products you want at a price that you are willing to pay, and you can set your budget accordingly. When you move, all this goes out of the window and you find yourself spending a fortune in fuel driving around trying to locate bed linen, laundry detergent and a pair of pink tights for the school play – all of which you end up paying full price for, because you have yet to discover where the deals are.

Waste.

Not only do you not know where to buy things, you don’t know what to buy. You would think a move between countries speaking the same language would make this easier, but the marketing departments have ruined it by changing the names on even the most familiar products. For the first year in the US, every contact I had with a British expat included discussion about laundry detergent, and the choice thereof.

The same applies to foods, clothing, furnishings, electronic appliances and even services – you don’t know where to go and what an acceptable price range is, and you end up paying for brand names that you know – the ones, inevitably are more highly priced. You buy a car from a large dealership rather than from a small used car lot, you get it serviced there because you don’t know any reliable local mechanics. You buy your furnishings at full price because you didn’t know about half price Wednesdays, and you have no idea what you should be paying for   bread.. So you waste money on a higher quality than you might need, and you waste foods

What you can do. Ask for recommendations, samples and referrals. When you meet people with children of similar ages, ask about anything relocated to children. Receptionists everywhere from schools to doctors offices are a mine of useful information, and once you have found one good provider, ask them for the names and numbers of their favorites. If you have managed to find yourself a mentor, download our mentor checklist and ask them for their help. I am notorious for stopping people in stores and asking them everything form where they get their hair done, to how they get their child’s karate kit to stay so white. Most people are delighted with the compliment, and are very happy to share the information.

Check out the manufacturers. The names and packaging are all designed to appeal to a local audience, but many big manufacturers have a global presence. To help you narrow your choices, start with products by the same company and work from there.

If you have a realtor, consider asking them for a list of their preferred providers – they will not only have a list of reliable and reasonable tradespeople, but if they are involved in staging homes for sale, will also know where to buy attractive, inexpensive home furnishings (they will also now the more expensive places too!), and can give you an overview of the different price ranges of the various stores and businesses in the local area.

 

If there is one thing I have learned over the past 11 years, it’s that it is impossible to predict your true costs up front – but they will happen, no matter how frugal you are. Our solution is to start a moving fund before we go, keep a close eye on our spending and to travel as lightly as possible. Now it’s your turn – what are yours?