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ExpatWealth posted a topic in Shanghai News & DiscussionDo expats in China need a will to protect their assets in the extremely unlikely event that they pass away here? Yes, No and Maybe. Let’s take a look at the purpose and function of a Last Will and Testament. A will has 2 functions. First, it is a legal document that carries the weight of a binding contract to transfer property from you estate to your beneficiaries. Second, it is a clear, systematic declaration of your intentions for the disposal of your assets after your death. Since China only recognizes Chinese language contracts in its legal system, most of the documents we are discussing here function as a written instruction and declaration of your intent – not legally binding contracts. This helps friends, family or representatives from the consulate dispose of your assets quickly and efficiently. BUT – in the event that a local Chinese person or business challenges your will in Chinese court, the English language document merely serves as a record of your intent. Who needs to have a formal will in China? Not a big concern: If your assets (inside or outside of China) are not significant than a formal will is probably not a high priority. While it’s always a good idea to have a written will back home, ex-pats with no children or assets are best off steering clear of the Chinese legal system. Don’t compound the worries or stress on your survivors by making your parents fly to China to pick up your iPod and organize your sweaters and sock drawer. Good idea: If you have young children, then some type of formal will is probably a good idea. God forbid both parents pass away while living in China then the children may become ward of the state until your government can step in and clear up the matter. How long will this take? The best of all possible solutions will be reached as quickly as humanly possible. How long will that be? No one can say. Lawyers in Shanghai assure me that all the concerned parties want nothing more than to see those kids taken care of as fast and sensitively as possible. BUT – if your intention is that your children go to live with your sister on the farm in New England and not your wife’s alcoholic father with a gambling problem, then you are best off leaving clear, formal instructions. Having some type of formal will is basic financial common-sense, and everyone with significant assets or property should take this step. Even if your assets are back home and you plan on leaving them to your wife, children or other family members, it’s still a great good idea to have a formal document. Yes, you need a will: If you own Chinese property and fear that a Chinese local may try to claim those assets after you pass away. Single men with girlfriends should take note. Single men with ex-girlfriends and ex-wives should be VERY concerned. So should anyone with Chinese business partners. The same goes for anyone with significant off-shore investments. What if you need a Chinese language will? We strongly recommend that you deal with an international law firm based here that can provide you with a bilingual document that conforms to Chinese law AND integrates with your existing estate plans. Obtaining an international will in China: How do you get a will? If your situation is complex or involves Chinese legal jurisdiction, an international law firm based in a major Chinese city is your best bet. Make sure the translation is high-quality. You will be reading the English, but the Chinese court system will only be concerned with the Mandarin version. If you need a formal declaration of your intent, a simple will-kit or template will be sufficient. These have the advantage of being inexpensive, simple and clear. If your assets cover multiple jurisdictions (a US citizen with property in Australia and investment funds in HK), then you may need multiple wills. Joint-wills for spouses are NOT a good idea, and many jurisdictions don’t recognize them.
ExpatWealth posted a topic in Shanghai News & Discussion‘Every man is rich or poor according to the degree in which he can afford to enjoy the necessities, conveniences, and amusements of human life.’ – Adam Smith, The Wealth of Nations (1776) At the time of writing, I am in the process of helping a British expat couple do just this – a personal balance sheet. They are intelligent, capable, multi-lingual expatriates and are paying me 7500 RMB per day to help them understand their own finances. Only last month I completed similar work for another expatriate couple relocating from Dubai to Shanghai that had managed to get into such a pickle that their joint income of almost $12,000 each month was simply not enough to support a rather simple lifestyle for two. If these people can get unstuck and lose track, then I’m certain it can happen to anyone. It is a very common problem – spending so much time earning a living that you have no time to plan what to do with it. A projected departmental budget for next year will get analysed in depth, but next month’s grocery bills.
ExpatWealth posted a topic in Shanghai News & DiscussionHealth insurance for expats living in Shanghai can get very expensive very fast. Let’s look at a few numbers. Let’s say you are a family of 4 living in Shanghai, and you want to buy some comprehensive medical insurance that covers both inpatient and outpatient services. One leading international insurance provider offers coverage to Shanghai expats at 3 levels of service. The mid-priced package provides hospitalization, outpatient services, health checks, emergency medical evacuation, and a variety of other features that expat families in Shanghai would care about. It does NOT cover the US, except for emergencies. How much can you expect to pay for this kind of coverage? If you were a single 34 year old living in Shanghai, your annual premiums would be just a bit over US $1500 (as of November 2012). You first child would cost you an extra $700 or so, and your second child would add another $ 550. So for the whole family, you can expect to shell out around US$ 4,250 for a year’s worth of comprehensive medical insurance in Shanghai. (Being in Shanghai will cost you around 10% more.) It’s worth it to have piece of mind – but even better if you can get your company to foot at least part of the bill! BUT, you can lower your premiums significantly by opting for a “deductible” or “excess”. (US providers say deductible, UK and international say excess. Same thing.) If you select a $100 deductible, then the first $100 in medical expenses each year are your responsibility, and you must pay out of your own pocket. In the case of this fictional company, a $100 excess will save you around 5%, a $400 excess will cut your premium by 15%, and a $1,600 excess will save you 30%. Every company is different, and you will have to sit down with an advisor to get the facts for your unique situation. But expats and international Chinese in Shanghai can expect to see these kinds of premiums for high-quality comprehensive medical insurance.