Hope for the best; prepare for the worst- how to manage a US/UK estate plan in unprecedented times
In these difficult times, with no end to the lockdown in sight and the concern of what may happen in the coming weeks, from both a health and financial perspective, now is a good time to review your estate planning documents to make sure they are in order. Or, if you have yet to make a Will, there is no better time to do one whilst the risks we all face are ever present in our minds.
If you are a US citizen or domiciled in another country, it is particularly important that you take professional advice to ensure that your estate planning is up to date and benefit those you intend, particularly with travel restrictions in place, making it more difficult than ever to implement more complex estate plans.
If you have a US revocable trust in place these may have a different tax treatment in the UK and you should take advice on how they may be treated. Similarly, if you are the beneficiary of a trust set up by a parent in the USA it’s important you understand what tax considerations, if any, there will be on assets passing to you.
Why a will?
A carefully drafted Will can ensure that those left behind are not left with a “mess” and this is particularly important for people whose affairs are more complicated by virtue of having assets and beneficiaries in more than one country. It can also ensure that those you wish to benefit will do so, which is far preferable than having to navigate two (or more) sets of different intestacy rules.
What if I’m unable to make decisions?
Many US citizens may already have a durable powers of attorney and/or healthcare proxy in place, but the UK has its own documents to deal with decision making on behalf of someone who is not able to. These forms are Lasting Powers of Attorney (LPA), which would allow someone to step in and make important decisions on your behalf, whether in relation to who will run your business, ensure your bills are paid or take decisions in relation to your health.
A carefully drafted LPA is a useful insurance policy; you hope you will not need it but it’s there if you do. The LPA allows you to make the choice about who acts for you and what decisions they can take. Without one, a deputyship from the court will be required which is expensive and can take some time, particularly at the current time.
Here at Downs the whole firm continues to work remotely and we are able to provide you with expert and practical estate planning advice which takes account of your overseas assets or domicile status. Please do get in touch to discuss your circumstances.