Sam Orgill of www.proactpartnership.com looks at the inconvenience of dying abroad

Death is always inconvenient for someone, especially the deceased and their loved ones. But there are those that can benefit from death, sometimes in the family, more often than not, those on the outside. Is there a convenience store where you can purchase things to cut the cost and delay of transferring wealth and assets to family and loved ones?

Tel:  +357 26 819 424  +357 26 819 424   

Plan ahead for Death

There are two ways to leave this mortal coil – quickly or slowly.

Which ever way you go, you can plan ahead to smooth the transition the living have to make after the departed.

I am not addressing the emotional or grieving aspect here that is not my forte. But if the finances are all well planned and clearly executed then the worry and distress of delayed transition of cash, property and cars can be avoided. More importantly you can avoid being caught with high inheritance taxes, death duties, legal fees and funeral expenses.

Inheriting Debt

Now I am all for paying for my funeral with a cheque that bounces, but you shouldn’t forget that the debts you leave become the liability of your widow or family. So if you get caught with high medical expenses pay them on your credit card then die, the money still has to be repaid. This is also true for mortgages and car loans. If debt repayment is not provided for a forced sale of assets could prevail.

Review your debts and cover them with life assurance.

Lottery of life on death

Life assurance is often castigated but in practice it can provide a windfall cash lump sum like a lottery win for the family recouping quick, clean cash. Life insurance can come in two forms; either a lump sum usually paid to the surviving spouse within 2 weeks that assists with the upheaval and expense of death, or considers a funeral plan. A prefunded funeral insurance plan that ensures all costs are covered under a fixed price.

Review using life assurance, funeral plans and possibly with Trusts.

Funeral Mystic

Spookily the cost of a funeral service and burial plot in Cyprus costs about the same as repatriation to the UK, except with the latter cremation and funeral expenses in the UK still have to be met!! I wonder if something is not lost in translation here regarding charges and prices. Again, funeral plans avoid this problem.

There is another point to ponder. If you paid national Insurance in the UK or Social Insurance in Cyprus then there are death benefits to cover the funeral expenses. Retired expatriates are still entitled to claim a lump sum death benefit to cover the funeral costs. The Cyprus practice is for the undertaker to complete the claims for Social Insurance and funeral expenses. It is important that you don’t pay them in full and then authorise them to claim your Social Insurance benefit direct to the undertaker. That would be paying for the funeral twice, surely not?? Review your entitlement and consider funeral plans.

 Transfer of Property on Death

Transfer of property, cars, bricks and mortar, individual bank accounts can be a massive issue in Cyprus especially in terms of the final bill. Cypriots have forced heir ship and children always inherit. If in doubt, make a Will. This will establish how your estate is to be settled.

Non Cypriots can make a Will and direct benefits to the surviving spouse and other family members, e.g. step-children or nieces rather than direct blood relatives.

If a Cyprus solicitor is nominated as Executor in a Will, or no Will exists they can charge a statutory fixed fee as a minimum of around 12% of the total estate value. They can not charge the fee if a family executor requests they administer the estate. The administrator would agree a fee with the executor before commencing work. Too many people fall for the old chestnut of “Don’t worry about the costs, they are fixed by the Bar Association”. True. But it’s still 12%. If your estate is valued at €250,000.00 then you could be giving a complete stranger at least €30,000.00. Surely not???

Review your Will; make sure you are not tied into high Probate charges. Review your assets. Make sure that they are arranged in such a way that as much as possible is settled, or can be settled outside of Probate.

Gift of Property before Death

Always the priority is providing for the couples financial security during their lifetimes. However using Gifts to Trusts and children can avoid Probate delay and dramatically reduce costs. For example if you were to suffer a long illness you could consider transferring your Cyprus property to children or to a Trust. This can be done free of Capital Gains Tax and Property Transfer Tax and costs from only €500.00 – a fraction of the cost of Probate. Plus it can take as little as 2 weeks to complete the paperwork.

“If it’s that easy, why haven’t I been told”? I hear you ask.

Consider the cost of Gifting a property for approximately €500.00 against the cost of Probate at 10% of the value of the Estate. Which method makes more money?

Review your financial and property assets and consider gifting to children, beneficiaries or to a Trust before you die.

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ProACT offer the convenience of a one-stop service that offers professional and independent advice on all matters regarding Wills, Trusts and Probate. Contact us for a FREE review before you die.

ProACT Partnership offer professional expatriate advice services to family and business living and working abroad including retired and working people. 

Contact us for a Free review of your expatriate issues including relocation abroad, UK & Cyprus tax issues, making a will, investment and savings and business services.

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Sam Orgill

www.proactpartnership.com