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Understanding Inheritance Laws When Owning Property Overseas

By U.S. News & World Report

Imagine that you and your spouse are living your retirement dream in, say, Ecuador. Then your spouse dies and you discover that you now share ownership of your Ecuador dream home with your deceased spouse’s adult children. It’s not a wholly unlikely scenario if you buy a home in another country without understanding that country’s inheritance laws.

In the United States, citizens enjoy a great deal of flexibility when it comes to estate planning. With a valid will, you can leave your property to anyone you like. Usually, we leave our homes to our spouses.

However, that’s not how inheritance law works in much of the rest of the world. Many countries require that you leave your property — or your portion of a jointly owned property — to your children or your parents rather than to your spouse. The concept of joint tenancy with right of survivorship is not widely recognized.

What’s more, you cannot always override these inheritance laws with a will. The practice of leaving property to children or parents is based on old European laws designed to keep family estates in the family. It’s founded on the premise that descendants have an inherent right to the family’s holdings.

However, following this approach, things can become complicated if a husband or wife has children from a previous marriage. In that case, the children of the deceased inherit the deceased’s share of the property. Even if the children all belong to the same parents, having a number of co-owners can complicate things. Before the surviving spouse could sell the property, for example, all of the children would have to agree and sign. And if the surviving parent outlives one of the co-owning children, then that child’s heirs become additional co-owners.

Again, a will can’t always override these complications. In Ecuador, for example, a married couple doesn’t get much more control with a will than the law otherwise mandates. You can’t simply leave your half of the property to your spouse, even with a will.

In Brazil, on the other hand, a will is extremely important. Half of your estate in this country can be bequeathed as you like, without restriction, and your spouse is included as a mandatory recipient in the other half. Also, in Brazil you can use a will (and the inheritance laws) from your home country, provided any Brazilian heirs you have are treated fairly.

In France, your spouse is entitled to a quarter of your estate, although it can be more depending on how many children or grandchildren you have. To leave your entire property to your spouse, you should look into a French marriage contract, trust or a family inheritance pact. These tools do the job in France better than a will.

In Belize (a common law country like the United States), you can leave your property to anyone you like. However, if any of your relatives think they have been treated unfairly in the will, they can apply to the Belizean Supreme Court for relief.

I give these examples to show how varying the global hereditary landscape can be, not to attempt to give legal advice. It’s important that you discuss succession with a qualified lawyer to understand the current situation in any given country.

Here are four strategies to consider when determining how to handle your estate in another country:

1. Do nothing and hope you don’t die before you’ve sold your foreign property. This is the strategy that most expat owners employ, and it works great for those who know precisely how long they’re going to live. For those of us who don’t, it can be risky.

On the other hand, it’s not always as risky as it sounds. If you’re happy with the country’s default inheritance laws, then dying without a will can work. For example, if you’re a single person with two children, and you own a piece of property in Colombia, then that property will be split between your children when you die, whether you have a will or not.

2. Prepare a will in accordance with the country’s standard practices. This works fine if you do not have a spouse, no children are involved and you are satisfied with the country’s default options. It’s better than the “hope not to die” strategy above because it allows you to name an executor and to identify your ultimate heirs.

3. Don’t mention the kids when preparing your in-country will. In this case, you would prepare a will that leaves your property to your spouse and does not mention any children. In some countries, you need to explicitly state that you have no children. This can work as long as one of your kids doesn’t contest the will. If they do, they will win.

4. Own the property through a structure or entity. This can be the best solution, although it’s also the most complex. In this scenario, you create a corporation, LLC, trust or other entity and address succession within its structure or bylaws. The entity owns the property.

This works well and can eliminate the need for an in-country will. It can also reduce the eventual selling transaction cost because the property remains in the company’s name. You simply transfer the company to the new owner. Note that this can also have tax implications, positive or negative, depending on the country, which you should discuss with your attorney.

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group.

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Understanding Inheritance Laws When Owning Property Overseas originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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