Category Archives: Legal

Expat family essentials: Estate planning checklist. Defining Moves: information, inspiration for the global expat family. Trailing spouse, supporting partner, expat partner, accompanying partner, international assignment

Expat Family Essentials: The Estate Planning Checklist

Expat family essentials: Estate planning checklist. Defining Moves: information, inspiration for the global expat family.  Trailing spouse, supporting partner, expat partner, accompanying partner, international assignmentWhen my mother came to visit us in Los Angeles, she neglected to bring her swimsuit, and was faced with the challenge of what to wear in our pool. My generous offer of a string bikini was rudely rejected with the words “Over my dead body”. I am taking her at her word, and when she moves on to a better place, we will be marking her passing with an open casket viewing and the aforementioned attire.

Just to compound your already low opinion of me, I also respond to unwanted maternal points for improvement with the words “ Just remember who’ll be choosing the nursing home”…

Let this be a lesson to those of you who are feeling complacent having written your will; if you also want a say in your care and send off, do in it writing, and make sure it can be found before the services (healthcare, financial or spiritual) have taken place. It applies to all of you, but if you are an expat, the risks are even higher..

 

There are four more documents that you need to consider preparing:

  • Guidelines for your funeral arrangements
  • Power of Attorney
  • Trust / Catalogue of assets
  • Letter of intent

Funeral arrangements. 

If, like myself, you have specific ideas about your funeral, you need to put a plan in place so that loved ones left behind can honor your wishes. For those of us with a somewhat warped sense of humor, it’s a great time to mess with everyone a little, but I appreciate that not everyone out there is as cruel as I.

The key points to cover include:

Location for service (church, crematorium etc.), preference for cremation or burial, memorial service, storage / distribution of ashes, etc.

Funeral preferences – hymns, caskets, flowers, donations, clothing (yours, but feel free to have a little fun with their dress code too…). You could even write your own eulogy and obituary, complete with an embellished (and  potentially wholly fictitious) list of accomplishments.

Funding – it’s the one we all forget, but if you are living overseas and wish to be buried in your home town, make provision for the costs of repatriating both your body and your family. Your embassy can give guidance, but the costs are entirely your own. Bear in mind that your heirs can’t easily access accounts left in your name once you have died – funeral expenses are deducted from the estate before it is divided between the beneficiaries, but flights etc are usually paid in advance, so ask your lawyer the best way to facilitate this.

Power of Attorney.

The Durable Power of Attorney / Enduring Power of Attorney is a document that designates a representative to make financial, health care, or other business decisions for you if you become unable to do so for yourself.

This can be general or limited / springing. A general durable power of attorney gives permission for whomever you name to make every decision on your behalf, if you are no longer able to advocate for yourself. A limited durable power of attorney cover specific events, like selling property, making investments (often given to financial advisors / brokers) or making health care decisions (also called an Advance Directive of Health Care).

You can choose anyone to act as your agent, but commonsense rules apply – choose someone trustworthy who has your best interests at heart, and who is physically able to make those decisions; while many decisions can be made remotely, those living overseas should consider choosing someone who is able to travel.

Trust.

I am not a lawyer, nor have any legal expertise or qualification, so I am leaving the explanation of what exactly a trust is to those in the know – click here for the best explanation I could find, or check out the additional resources at the bottom of the page. Your task is to go away and get legal advice on whether trusts are applicable to your situation.

Simply put, a trust is a legal holding zone for assets, which are controlled by individuals known as ‘trustees’, for the benefit of other named parties “beneficiaries”. You nominate multiple trustees and beneficiaries, allowing both flexibility (it is relatively straightforward to change the conditions of the trust) and smooth transition of both control of and benefit from the trust.

The vast majority of people set up trusts for financial reasons – properly crafted, your trust can help to avoid significant estate taxes. However, for expats, the ability for assets to be transferred seamlessly is often far more important; especially where the remaining spouse is on a dependent visa and no longer legally entitled to remain in the host country.

It also has the advantage not just cataloging major assets but also specifying how beneficiaries can access the funds contained in the trust, meaning that should the unthinkable happen and both parents die, they can leave instructions for funds to be released at appropriate intervals (for example, lump sums to cover college tuition and living costs, down payments on a first home etc) rather than giving total control when the children reach legal adulthood.. As someone with a 17 year old who is unable to manage his birthday money effectively, the thought of leaving him in charge of half our net worth in a year’s time sends shudders down my spine.

Letter of Intent.

Finally, it’s the easy one – your letter of intent. It’s not a legal document, instead simply some guidance to the guardians of your estate and your dependents about what your wishes, your hopes and your future plans for your dependents are.

There are two things to bear in mind:

  1. Think of your letter of intent as a set of guidelines, not rules. You are handing over the job to someone who is not you (and never will be), so let them do their best with the situation they have; if there are any ‘dealbreakers’, it’s probably a good idea to discuss them in person before you assign them the responsibility.
  2. Make sure you have the funds to back it up. There’s nothing like being left with a laundry list of expectations, and no money to do it. It’s the same lesson we teach our children; if it’s that important, you should be willing to pay for it with your own money..
  3. Don’t assume children are your only dependents; you may need to make provision for your parents, your pets or your clients.

So there we go – you are well on the way to getting your plans a little more ‘future-proofed’, whether in terms of money, care for your dependents, or what they say about you in your obituary. Just remember; your epitaph really is the one thing that is written in stone…

 

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)

Relocating? 9 Essential questions every expat should ask. (Part 2)

It’s the second part of our guide to avoiding relocation disaster – and the same rules apply for domestic moves, diplomatic postings and international assignments. So before you sign on the dotted line, here’s numbers 4 and 5 of the essential questions that every relocating expat should ask.. If you missed the first part, you can catch it here.

4. What support is available? If you answered the first three questions, you already have an idea of what support you’ll need – so here’s where you have a clear conversation with HR about what support services are in place to meet those needs. Many packages seem lavish to the casual observer, but when you scratch the surface, the services included are not always right for your family needs.

Schools, for instance. While the local schools may be excellent, if you are on a 2-3 year contract with a high school age child. you need a curriculum that accepted by their target college rather than a host location one. If the relocation package doesn’t include funding for private schooling, your salary has effectively been reduced by anything up to $30,000 per child, per year.

Increasing numbers of assignments are to developing markets – India, China and Africa – all of which need considerable amounts of cultural orientation and language training. Does the package include enough for you to be able to function effectively and meet your personal goals outside the home or workplace? Shopping, medical visits, dealing with bureaucracy – all are a very real part of the transition, and all involve interpersonal communication.

These examples are gleaned from experience, and the best way to understand what support is needed is to see it firsthand. Hence number 5.

5. Do we get a family pre-visit? In my mind, the pre-visit is vital to a successful relocation – there is no substitute for seeing firsthand the challenges that you all will be facing. Throughout the assignment process, your life transition is facilitated by people whom you have never met, and who are deciding your needs for you. The pre-visit is your chance to see what they got right, and what they have wrong.

The biggest mistake people make is to use the pre-visit purely to find housing. This is wrong for two reasons:

  1. it means you agreed to the assignment based on a very small amount of information and
  2. the time is better spent identifying the challenges you face, not choosing floor plans.

So what should you be doing? Sadly, not staying in the hotel enjoying room service, or visiting the local tourist sights. Your goal is to recreate daily life, in all it’s glory, using the information that you put together in the previous steps. Look at neighborhoods, visit schools, experience traffic and commute times, do some grocery shopping, and most of all, talk to other expat residents.

Listen carefully to what they are telling you about the good, the bad and the plain ugly of your new home. Not all  of their concerns will be problems for you, but you can count complaints about the weather, issues with utilities, security, traffic and schools being pretty universal.

Once everyone has given you the low down and dirty, listen carefully to the concerns of your own family. The work environment will be more familiar and (usually) more supportive, whereas everyone outside of work is flying solo, and your package needs to acknowledge and make allowances for that. With “62% of all refusals to accept an international posting .. family related” and “34% of expatriates return from assignment prematurely because of family concerns”, this pre-visit is a time for the whole family to identify the potential pitfalls and possible ‘deal breakers’ while you still have time and negotiation on your side.

References:

Tales of woe from the roaming professionals

Brookfield Global Relocation Trends Survey

 

Camel train circa 1900's

Relocating? 9 Essential questions every expat should ask. (Part 1)

Camel Train circa 1900

 

When we think of living abroad, we instantly conjure up images of white sandy beaches, turquoise seas, friendly locals and a leisurely quality of life. That is, until we’re two days into our first relocation, surrounded by boxes, with no power, not internet, and no help in sight. By day four, the bloom has gone off this particular rose, and by day seven, we realize that we were possibly just a little naive in thinking that four bedrooms, a balcony and guaranteed sunshine were really all we needed to find our bliss. So for the anyone considering relocating, here’s part one of the ‘9 Essential Questions Every Potential Expat Should Ask’ series. And yes, the same rules apply for domestic relocations too..

1. Where am I going?

The standard ways of finding out destination information – travel guides, websites and maps – tell you very little of what you need to know when relocating. Visiting a country for a short period is very, very different to living and working  there, and it’s the challenge of day-today living that causes many assignments to end early.

To understand whether your new location is a good fit for you and your family, you need to do two things. Firstly, assess how your time is spent currently, including work, school, commuting travel, after school activities, sports, socializing etc. Using resources specific to long term living rather than short term visits, assess how much change you would experience, what benefits and disadvantages your new location has, and decide whether or not this is really the move for you.

This might be anything from a lack of sunshine /open space/daylight hours/ professional theatre to different education systems, religious practice or high crime rates. There is a whole world out there, and it’s better to keep your options open for a more appropriate assignment than be forced to terminate one early.

Ask your HR department about global information that the company purchases –  resources like Living Abroad, Expat Arrivals, the Not for Tourists guides and the Lonely Planet guides will give you much of the information you need, and online blog registries and expatriate forums have the real life experience. Consider joining a network like Internations to meet locals and expats from your potential host location.

2. How long will I be going for?

Notice that didn’t I ask how long was your contract was for?  Ten years and 5 relocations ago, we were offered a 1 year temporary assignment to Kenya. I have yet to return home, and all of our wedding photographs, birth certificates, photographs of our children as babies and furniture are still in a house in Wales. Contracts get extended, new transfers are offered, and if you are taking short term assignments, often all your belongings are not included in the relocation policy.

More importantly, you need to have a clear understanding of how long all members of the family are willing and able to participate a globally mobile life.

The long term issues surrounding schooling mean that your children may not have the required qualifications to attend the school of their choice (although colleges and universities are becoming much more flexible in terms of acceptable international admission criteria) or they may now be liable for higher ‘international’ tuition fees as you have lived outside your home country for too long to qualify for local fees.

The accompanying partner may have negotiated a year’s leave of absence, or may be required to maintain professional registration status, both of which become vulnerable if an assignment is extended.

3. What does the package include?

There are various types of relocation policies, including local, local plus and international, all of which give different levels of pay and benefits dependent on location. And while some will seem very generous in terms of base salary and hardship allowances, once on assignment you can quickly discover that the money is eaten up in unexpected ways.

If you have the information from the previous questions, you will have a better idea of what your new lifestyle will cost, and whether or not components that you consider essential are reflected in the assignment offer.

Key areas to look for are not just base salary, but frequently reviewed goods and services supplements (useful in less stable countries where the price of goods and exchange rates can fluctuate wildly) , health insurance coverage, childcare and school funding, whether you will be paid in your home or host currency, travel allowances, emergency evacuation policies, and repatriation assistance.

Talking to other expats will give you the best understanding of the real cost of living, which brings us neatly to the first question in Part 2 – “Do I get a preview visit?”

Vintage photo of five girls on a horse

Essential Expat – Negotiating your International Assignment Contract

Vintage photo of five girls on a horse
Photo courtesy of the State Library of Queensland

 

 

 

 

 

 

 

 

 

 

 

When it comes to international assignments, relocation policy is not just a ‘one-size-fits-all’ affair. Not only is there flexibility to cater for specific individual needs within the various policies in use, there are also plenty of potential pitfalls to consider too. So what are the main areas that you need to understand when negotiating your expat assignment contract?

Home or Away. There are now a number of different types of contracts being used by the HR and relocation companies to manage your assignment. The two most common are local (including local plus)  and international. Local means that you will be temporarily governed by the employment pay and conditions of the host country, and aims to ensure parity among employees within a specific location for the duration of your contract. It can mean a increase in salary for more expensive regions, but a decrease for less expensive, and can significantly affect annual vacation entitlement. Local plus provides for additional needs or expenses incurred because of your temporary expat status, such as international school fees and trips home.

An international contract means you continue to work under the terms and conditions of your home location, regardless of the salary and benefit entitlements in your host location. As a comparison, European employees on an international assignment in the US would probably be entitled  to more annual leave days than their American counterparts, whereas US employees heading to Europe would find the opposite was true.

Matching Up. Once you have established what type of contract you will be working under, you need to look carefully at the terms and conditions of that contract, most specifically with regard to equalization. You need to be sure that the package provided gives you the same (or better) standard of living as you would have in your home location. It is more than just the immediate basic requirements – housing, healthcare, schooling, transportation, financial and legal status – you also need to consider the longer term: school planning, college eligibility and fees, provision for dependents becoming legally adult, access to legal services should you need them, long term medical and social care, financial planning, tax implications and superannuation (company pension plan). You will need to do detailed research in advance with reference to your specific individual and family needs, and if you have a preliminary visit, try and talk to resident expats to get a realistic picture of what the cost of living in your host location might be, and what challenges to expect. Don’t assume that the information given by the relocation management company is accurate – they use a generic formula that may have little relevance to your situation and needs. There are plenty of resources available to help you – Living Abroad, the ExpatInfoDesk , Journeywoman and Expatwomen all have country specific information and contacts that can help you understand what you are getting into.

Homeward Bound

“There is nothing like returning to a place that remains unchanged to find the ways in which you yourself have altered.” – Nelson Mandela

What happens when your contracted assignment is over? In an ideal world, there is a clear progression that goes beyond your repatriation, and provides for a smooth transition back to your home location.  Even with successful international assignments, many people have discovered that repatriation is as hard as expatriation, and there is an increasing awareness that companies need to provide similar support services to move employees back to their former home successfully. And finally, ensure that you are supported should the assignment not go to plan, and either the whole family or the dependents need to repatriate early. If the situation is serious enough to make you leave, the last thing you need is to have to manage and fund your own return journey..

Additional resources:

Expat Info Desk – Negotiating your contract

ExpatArrivals – Expat contract negotiation

BritishExpat – Negotiating the expat contract

 

Relocating? Essential documents that every expat should keep, copy and/or carry

We are in the process of applying for our Green Card, and it’s nothing like the film. For a start, we are legitimately married, and have been for so long that our vacation family photos usually just feature the Other Half and the kids, because having planned, packed and catered for a weeklong sojourn, there is no way I want my exhausted, disheveled state recorded for posterity. Anyone who wishes to verify that we are married just needs to spend half an hour in the same room and listen to a disjointed conversation that involves car pool commitments, emergency meal planning and a reminder of outstanding (not in the good way) household tasks..

However, back to the Green Card bit. So far, we have fallen foul of a lack of vaccination records for myself and the OH (resulting in a fresh round of childhood vaccines and a very sore arm), the inability to recall exact dates of employment from back when work meant I was actually paid, and an inadequate birth certificate. As our original posting was a year long temporary assignment, all our official documentation, wedding and baby photos, etc. etc. are safely in storage and completely inaccessible from sunny San Francisco. My latest interruption has been attempting to obtain a certified copy of my birth certificate from 4000 miles away – pausing only to pray to whatever God might be listening that my online order a) is not an elaborate scam, and b) gets here before next Christmas.

For those of you who like myself, had no idea what documentation might be needed over the course of your expat relocation adventures, I’ve prepared a checklist.

Essential Docs Checklist

It doesn’t just apply to relocating expats – it’s a good idea for everyone to have immediate access and back-up copies of the documents listed, so please feel free to share. Buy a scanner to make electronic copies of documents and store securely – you’ll be surprised how you need copies, and how useful it is to be able to email them  immediately. If nothing else, you will look and feel supremely organized. Unlike me..

 

The Top 10 concerns of Expats #2 – Defining Moves Version

5) The Relocation Process

The trouble with the Relocation Process is that there very rarely is one. Anyone experienced in relocating will tell you that by the time you know you are really going, life becomes a maelstrom of moving trucks, school searches and house hunting, all against a backdrop of a disappearing spouse desperately trying to get to grips with a new role. Focus is inevitably placed on a checklist generated by a Human Resources intern somewhere who has decided that all you need for life fulfillment is a house to live in, a school for your children and a myriad of boxes to unpack. If only they had read Maslow’s ‘Heirarchy of Needs”, this would all be so much easier. Thankfully, there are plenty of people, communities and resources to help you achieve the life you want, so with a little research, some thought, and advance planning, you can get to the good stuff quickly.

As  a rough guide, these are my recommended steps to take.

Assessment. The shortest step, but by far the most important. This is where you need to identify what is most important to you, what you want from life, and whether relocating will actually meet those needs… It’s also the time to discover whether your relocation package is all it’s reported to be, and whether your expectations have anything in common with the company’s.. You may be entitled to cultural orientation training, and if so, wonderful. But don’t assume that it will cover your own particular needs, so try to find time to do your own research and use online resources like expat websites, Facebook and Twitter to connect with people who have experienced your new location firsthand. Expatwomen and ExpatBlog both have location specific resource groups, and most expat bloggers will be only too happy to answer questions.

Planning. The nitty gritty of relocation; a seemingly endless cascade of paperwork, documents, internet searches and phone calls. Assuming that you have a source of income in place, key areas to focus on are documentation and finance, schools, neighborhoods, health issues, transportation to and in location, and finding a social network. A pre-assignment visit is by far the best way to make sure that your planning is effective, and that you have realistic expectations, but make sure that you have done background research before you go, or you will come home with more questions than answers. Don’t spend all your time answering the ‘where’ questions, remember to ask ‘how much’ and ‘how long’ too – many an expat has found life far more expensive or far less relaxing than they had expected.

Implementation. If your planning has been effective, at this stage it should just be a case of carrying out your plans, and getting the basics established in location.  Expect this stage to take up to six months, and in many cases to be an emotional roller-coaster. Ironically, your new social network will be most valuable at this point, both in terms of cultural and destination orientation, and for emotional support. It’s worth spending time on some of the excellent expat forums online and using social media like Facebook and Twitter to discover already established expat networks that you can tap in to.

Evaluation. At some point, you will begin to get a true picture of your new reality. You have all the essentials in place, you have established a day to day routine, and  you have a social network (however small) to smooth the inevitable bumps. Now you can make informed decisions about life in location, and think about what you personally want from it. Up until now, your time is consumed by the practical details, but once those are out of the way, it’s common to feel a sense of loss and a lack of purpose, both for you and your family. Now’s the time to start adding that purpose and quality to your life, whether exploring the local area, starting a new hobby, finding work, whatever floats your boat. Try as much as you can, expect to hate a lot of it, but take pride in the knowledge that you’re getting out there and living life to the full. And don’t forget to take notes – whether photographic, a blog, a diary, whatever. A, inspired friend today confessed that she has a Tumblr account to which she loads a single picture every day, and even after three months, she enjoys looking back and relieving those moments. Chronicling the highs and lows helps to put experiences in perspective, and is a clear reminder of what’s important your own, personal expat life..

8 Noble Truths of Relocation

Yes, I know Buddha only taught four noble truths, but I don’t have his powers of concise thought..

1. It sounds far more glamorous than it is. The leisure industry has been brainwashing us for years about the wonders of travel, whether domestic or international, focusing our attention on the turquoise sea, the golden beaches, the breathtaking landscapes and beautiful people with their fascinating culture. They spend less time discussing the language barriers, healthcare issues, traffic jams and isolation from your support network which consume most of your new shiny life abroad. It’s real life, after all.

2. Support from your employer is never as good as you are led to believe. Fewer than 50% of employers offer relocation assistance, and when they do, the emphasis is getting you and your belongings to the new location as quickly as possible. How you survive once you are there is your own business. Destination support is usually an outsourced part of the physical move, and the variation in quality and service is immense. We have had everything from “What more can I do to help?” to “What do you want, flowers??”. Sadly, the latter was obviously sarcastic, because I have yet to be buried under a deluge of blossoms.. Here’s a checklist of what to expect from a good one..

3. Finding paid employment is usually more difficult than you anticipate. If it takes you less than three months just to get all the paperwork finished, the kids to school, find your bearings and manage to shower once a day, you are better at this than I. My main barriers are the ever changing school schedule, endless volunteer requests, navigating the legal requirements and trying to explain on my CV why my qualifications are not valid, why I move every 3 years, and how exactly that is an advantage to the prospective employer. I’m finally self-employed, but it’s taken me ten years. (For those of you who are wrestling with this conundrum, check out Jennifer Bradley’s website. She’s relocated, so she understands..)

4. Your spouse / partner will rarely give you the support you need. It may sound harsh, but I’m betting anyone who has relocated will agree with me. For one, the partner is starting a new role, and are having to adapt to their own changes in the workplace. Secondly, they are buffered from reality by a) the work environment and b) you. Unless you experience firsthand the sense of isolation and bewilderment that moving to a new place creates, it’s difficult to understand, especially when the spouse is a tangible asset to the company, whereas you appear to be more of an encumbrance, logistically speaking. The good news is that you will discover you are stronger than you ever realized, and will make lifelong friends who help you find your feet.

5. There is more paperwork than you can ever imagine. If you are embarking on an international assignment, you have the passportvisas and employment authorization documents to deal with before you go, and with rental agreements, driving licenses and dual tax filings to look forward to when you are there. Then you have the school applicationseducation transcriptshealth insurance and medical provider information, pet licensing and financial services.. And you needn’t be smug if you are on a domestic move – any savings in the passport / visa / driving license area are more than made up in any home sale or purchase. I know; I have bought and sold in California…

6. You have more clutter than you ever realized. ven if you move every year. We went to Kenya with a D sized container.. We returned with a 20′ container, and let me tell you, Kenya is not the shopping capital of the world. I was smugly telling my in-laws how I used to be a pack rat but now I don’t collect anything, and their eyes drifted to the three dogs, three cats and a goldfish that we have accumulated across three continents. Touche.

7. None of your furniture fits. Or, for that matter, the bedding, the appliances or your clothes. Your house may look the same, your needs may be the same, and you might have ruthlessly maintained your high school weight, but the dimensions, the voltage, the climate and the style will all look hopelessly out of place. Which brings me to my next point..

8. You become a master of the art of reinvention. Better than madonna, in fact. So far, my credits include bartender, nurse, college lecturer, events organizer, therapeutic riding assistant, retail sales associate and now this. I have bought clothes from Saks Fifth Avenue, and the secondhand market in a Kenyan slum, and gone from brunette to blonde and back to brunette, which means my driving license is never accurate. I have learned two things;  if you don’t try, you’ll never know, and the longer the title, the smaller the pay.

Now it’s your turn.. what are yours?