Your jetsetting lifestyle gives you plenty of freedom but complicates your responsibilities, particularly when managing assets in multiple countries. Your legal and financial obligations can quickly become a complex interplay of transnational estate planning, tax laws and inheritance regulations that differ across borders. 

Your estate plan must match your lifestyle. An updated plan will protect your assets and legacy, regardless of where you currently live or hold property. Here are the steps you can take.

1. Understand the Complexities of International Taxation and Estate Laws

Double taxation is a financial hurdle for American expatriates. The United States and Eritrea are the only countries that tax based on citizenship instead of residence. Americans living abroad are subject to IRS taxation even if they haven’t set foot on U.S. soil for decades. Before moving across borders, prepare to pay taxes in the U.S. and your new country of residence. 

Double taxation also applies to estate taxes. If your property exceeds the $13.99 million exemption threshold, your worldwide assets may be subject to U.S. estate tax. Additionally, some states, such as Maryland, impose separate estate and inheritance taxes, further compounding your tax liability.

Inheritance and capital gains taxes imposed at death by foreign jurisdictions may apply to assets within the respective countries, creating overlapping obligations that can lead to unexpected liabilities. Despite the significance of these issues, over half of Americans don’t have an estate plan or will.

To avoid paying taxes twice, explore options like the foreign death tax credit, which allows you to credit estate taxes paid to a foreign government against U.S. estate tax owed on the same assets. However, some countries, such as Spain, recognize U.S. trusts. In such cases, you must work with a local legal expert to ensure compliance and effective asset protection.

No uniform international law currently regulates cryptocurrency assets. The IRS considers all virtual currency property, which you can transfer to an estate and include in your will or trust.

2. Create Wills That Are Valid Across Jurisdictions

A well-written will under U.S. laws might not be immediately enforceable in other countries where you hold assets. Many expatriates need multiple wills or an international will to protect their estates in the appropriate jurisdictions. There are two international conventions to consider.

The Hague Convention on the Form of Testamentary Dispositions

This agreement allows signatory countries to enforce their will in multiple nations if it follows the legal rules of at least your home country, where you reside or where your property is. Bypassing various local regulations ensures acceptance of your will.

The International Will Statute

This statute is a uniform law governing the validity of international wills that meet specific criteria. It is legally valid in any country that has signed the agreement. The U.S. is a signatory, but not all states have implemented it.

Your best strategy as an expat is to have a U.S.-based or international will combined with a situs will specific to the countries where you own properties. This approach ensures easier administration across borders, especially when dealing with non-English-speaking countries or countries with vastly different legal systems.

3. Address Forced Heirship Rules and Guardianship Concerns

Forced heirship laws are common in many countries, including France, Japan, Switzerland and Italy. These laws limit how you can distribute your assets after death, requiring you to pass a portion of your estate to specific heirs regardless of your wishes.

A specialized will can address these restrictions if you own property in such jurisdictions. For instance, in France, the European Union’s Brussels IV regulation allows non-French nationals to elect the succession law of their home country instead of French inheritance law.

Expat parents should also pay close attention to guardianship arrangements. If you have minor children, your estate plan must name guardians. In the UAE, Islamic Sharia law applies to Muslims and non-Muslims. Custody and guardianship are separate responsibilities under UAE law, which grants custody to the mother until the child turns 11 for boys or 13 for girls.

Given these legal nuances, maintaining consistent guardianship provisions across all your wills ensures your children receive prompt care without legal complications, no matter where you live.

4. Consult With International Estate Planning Experts

The complexity of the legal systems across borders means working with experienced professionals is nonnegotiable. You don’t want to carry the headache of understanding them all.

Consult attorneys specializing in international estate planning, preferably those familiar with U.S. laws and the laws of your countries of residence or where you hold assets. Financial advisors can integrate estate planning with tax strategies to optimize asset protection and minimize liabilities. You should also consider working with professionals who can coordinate multi-jurisdictional wills, trusts and powers of attorney to avoid conflicts and ensure your plan is comprehensive.

Future-Proof Your Legacy With an Updated Estate Plan

Your estate plan is a living document that should evolve alongside your life circumstances. It also serves as a valuable guide for the loved ones you leave behind once you’ve passed. Review and update it regularly, especially after acquiring property in a new country or changing your residency or citizenship status. Significant life changes, such as marriage, divorce or childbirth, should not go overlooked.

Don’t let the legal complexities surrounding your assets constrain your global lifestyle. Start building your plan today to secure your family’s future.