Why Expats Need a Will
Rock star Prince is the latest multimillionaire celebrity to die suddenly without a will.
Prince was believed to have a personal fortune of tens of millions of dollars gathered from selling more than 100 million records, publishing rights to songs and films and decades of almost incessant touring.
He died suddenly aged 57 from unknown causes. Prince was married twice but was divorced at his death. He left no children. Tyka Nelson, 55, Prince’s sister, has told the authorities that her brother had no will. That leaves her and five step-brothers and sisters to share Prince’s fortune.
Tax man to profit from star’s estate
Under state law in Minnesota, where he was born, lived and died, the estate is divided equally among them. The Internal Revenue Service (IRS) is likely to profit most from prince’s death by taking a 40% stake of his wealth.
Had Prince made a will and planned how to divide his estate in the event of his death, the family could have avoided paying most if not all the tax due to the IRS. Prince is not the only wealthy celebrity to die recently without a will. Actors Phillip Seymour Hoffman, James Gandolfini and Heath Ledger all dies intestate, as did singer Amy Winehouse.
Dying intestate leaves a financial mess
In Hoffman’s case, he had three children with partner Marianne O’Donnell, who was cut out of inheriting because they were not married. The money left by Winehouse went to her parents, not her former husband.
Ledger did have a will, but it was years out of date and left his $20 million estate to his family, even though he had a partner and child.
The sad financial mess these celebrities left for their loved ones and families is a lesson for everyone about estate planning.
Even if you have a will, you need to revisit the terms to reflect milestone events, such as relationships, separation and divorce.
Why expats need a will
Children and grandchildren coming on the scene may make a difference to how you wish your estate to be divided on your death.
Without a will, no one really knows what your wishes were on death and the tax man is likely to take a larger slice of your estate.
Expat estate planning is always complicated because more than one country is involved and different laws may apply to how an estate is handled in probate in each.
Often, inheritance tax depends on domicile rather than residence, so sorting out your tax status is an absolute priority so lawyers can draft the right documents in each country.
The sad fact is that the tax man and lawyers benefit the most from any estate of any value in probate as disgruntled friends and family stake their claims.
Making a will almost certainly minimises any tax due and ensures your wealth goes to those who you want to profit from your lifetime of hard work.
From investments to insurance, Globaleye’s Wealth Management expertise provides unbiased financial planning solutions for over 15,000 clients worldwide from our head office in Dubai, with additional offices in the Middle East, Asia and Europe.