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Jonathan Lachowitz of White Lighthouse Investment Management writes: Richard Lakin, 76, an American citizen and the father of a childhood friend, died earlier this week, two weeks after being wounded in a terrorist attack in Jerusalem. I grew up with his son, Micah, in Glastonbury, Conn., where Richard was principal of an elementary school. The Lakins moved to Israel decades ago.
I’m deeply saddened for his family, children and grandchildren and all of the students who’ll no longer experience his kindness. Richard would certainly tell me to not dwell on sorrow and instead focus on helping others with kindness and compassion. So, here goes.
Have you moved overseas and are you prepared for an unexpected tragedy in your family? Estate-planning is difficult; it doesn’t come naturally and it can often seem like a waste of time, especially if you’re young or middle-aged. Consider this list a starting point:
Estate-planning done in one country (e.g. wills, trusts, powers of attorney and medical directives) may not be recognized by the country you currently live in;
Make sure your wills are valid and reflect your current wishes;
Make sure your trust(s) are recognized in your new country of residence and still accomplish your goals;
Review your powers of attorney and advanced medical directives for accuracy and compliance with the laws of your country or residence;
Make sure your estate-planning attorney prepares a plain-English explanation of your legal documents – especially for trusts, corporations and other complex structures. It’s easy to forget many of the important details;
Proper estate-planning for individuals subject to more than one country’s rules (e.g. American expats) generally requires an international estate-planning attorney in both countries to make sure the planning works properly in more than one jurisdiction;
Make sure your beneficiary elections on IRA accounts, life insurance, pensions, annuities and other accounts are current;
Transfer on Death (TOD) elections for financial accounts in the US are generally governed by state law and may not be able to be changed when you live overseas;
The country where you’re domiciled normally gets the first tax bite in estate taxes, although other jurisdictions may also tax some of your estate;
The estate of an American overseas with US-based financial accounts will generally have to get an IRS transfer certificate before the financial institution will distribute the assets to the heirs or beneficiaries. This can take several months: ask your financial institution what documents are required;
Make sure you have enough life insurance – in the currency you need it and for the term in which life insurance is needed. Overseas life insurance may not be tax compliant in the US; it’s generally best to have term insurance;
If you have minor children, make sure you know who will care for them in the event their parents can’t and make sure your wishes are properly documented in the country you live in;
There’s a lot of estate planning that can be done that doesn’t involve legal documents and financial accounts: a) A list of important information/road map for the executor of your estate is invaluable in facilitating the estate settlement process at a time of grief; (b) a list of wishes and information that you would like passed on to friends and family members; (c) a list of important elements in raising your children if you’re not there to do it;
If you only had one year left on the planet, what would you do? Should you be changing your priorities?
The death of a friend or family member is often an important catalyst to preparing or updating your estate-planning. Richard Lakin and his life’s work – encapsulated in his book, Teaching as an Act of Love – are an inspiration and will live on through the many thousands of people whom he touched.