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So, tell me, do you have all of your affairs in order? Honestly? Or do you just think that you are organised and have planned ahead to ensure that everything you need to protect yourself and your family is in place?
It is hard to keep up with all of the areas of our finances that we need to, especially when there are so many more calls on our time – working, networking, spending time quality time with your family whenever you can. There are so many things that provide much more joy than poring over paperwork and, ultimately, paying out money for things that you may not see any benefit from for years – if ever.
That is why I thought it would be worth putting together a brief outline of the areas that you should be considering more regularly than you might ever imagine, to keep you up-to-date with your financial housekeeping.
One of the key items that people all too frequently deal with and then forget about is their will. There are many people who never even get around to making a will, but those who do still often leave it for such long periods of time that when the time comes and it is finally needed, it is woefully out of date, and can cause more problems than it solves.
For example, let’s say you were married, but got divorced. You may have had two children with your first spouse, and some years later remarried and had another child with your new spouse. Well, if you had not updated your will in the intervening years, there is a chance that not only would your first family inherit everything, but that your latest child may be excluded as a beneficiary.
You should revisit your will every time something significant changes in your life. Divorce, remarriage and having children are the more obvious events, but you should also check your will if you sell your home, or you relocate from one country to another. If you have assets in more than one country, you may also need to write a local will to cover the assets within that country, to prevent your estate falling foul of cross-border rules.
If you have put any of your assets in trust – which can be a useful way of mitigating inheritance tax on your estate – then you should also make sure that any letters of wishes are current. These will impact on the way that the trustees will deal with the assets in the trust at a trigger point, which could, perhaps, be when a child reaches 18 or 21, or when you die.
In a similar vein, you should also make a point of double checking who is going to benefit from your life insurance – have you changed the details from your ex-spouse who you now cannot bear to be in the room with? Will all of your family be taken care of in the way that you hope?
Many company pension policies will also have some kind of death in service benefits, or you may have another form of life insurance through your employer, and you must also make sure that not only will the right person get the benefit if you die, but that the company can always get in touch with you, even if you simply move home. The employer should also have current contact details for your beneficiaries and next of kin, because these people may not have been posted abroad with you.
You should also think about whether you have all of the protection you need. For example, what if you could not work, do you have income protection that would pay your bills while you are recovering? Or, think about what would happen if you had a severe illness and what impact that would have on your family. Critical illness cover would give you – and them – a lump sum to help cope while you get yourself back on your feet.
However, all of these measures will be largely irrelevant if your nearest and dearest have no clue where to find all of the relevant paperwork for your accounts, pensions and assets. If you are no longer here, your partner will need to know where to go for these vital documents – it can mean the difference between allowing your family to maintain their standard of living, or plunge them into a greater depth of turmoil than they already will be. It would be wise to make a list with details of all policies, accounts, wills, trusts, and so on, stating where the documents are and who to contact in the event of something happening. You should also make sure your spouse or dependents have a copy and understand it. You should review this document once a year.
None of us likes to think about our own mortality, but death is a fact of life, no matter how unpalatable. If you have not thought about your financial affairs for at least a year, then do it now, and make sure all of the protection you have in place for your loved ones will help them when the time comes.
First published in Expatriate Lifestyle