Don’t burn your bridges
Many expats are in such a hurry to put everything behind them when they settle overseas, that they sometimes take actions which can cause difficulties later on.
Bank accounts
Having an offshore bank account is a basic financial planning tool for expats. This provides unrestricted access to your cash wherever you may be. Show up at any ATM machine in the world with your cash card and you can make a withdrawal.
If you don’t have an offshore bank account, don’t make the mistake of closing your bank account in your home country until you have opened an offshore bank account. You will need an existing bank account in order to open an offshore bank account. This can be done much easier if that bank account is located in a Group 1 OECD country like your home country.
Some Thai banks have a policy of only dealing with the Embassy/Consulate of the deceased when a foreigner dies. This is avoidable by taking some simple precautions.
Credit cards
Credit cards are a very useful means of getting cash in an emergency and so they are a valuable life line that is well worth keeping.
Don’t cancel your existing credit cards from your home country, unless you replace them with offshore credit cards with an equivalent credit limit. If you can, arrange for an offshore credit card BEFORE you make your permanent move from your home country. In the home countries of most expats, credit cards are only issued to those who are resident there, so you won’t be able to apply for new ones, once you settle abroad.
Some Thai credit card providers won’t issue credit cards to people who are not ‘working’, meaning that expat retirees are ineligible. Most Thai credit cards actually work like cash cards, with the limit based on your bank balance and so at best, you end up with a much diminished credit limit.
Money
Keep no more money in your Thai bank account than you need for visa requirements or living expenses. As with many countries, it is often easier to transfer money into than out of a country.
Expats often enquire about currency exchange rates in relation to arranging bank transfers to Thailand.
It is beyond either the scope or knowledge of a financial adviser to advise on the timing of transfers to obtain the most favourable exchange rates and we don’t recommend our clients to second guess the currency markets.
After you transfer funds to Thailand, the exchange rate will almost certainly change. The question is would you feel worse waiting and seeing the exchange rate move against you or seeing the exchange rate improve after you transfer?
The other common question is in relation to which currency to choose for holding cash. Given the ongoing automatic devaluation of all currencies as a result of Government printing presses, there isn’t much of a case for holding significant long-term sums in cash, regardless of currency. However, given the exceptional imbalances in the US economy, highlighted by the OECD report in May of this year, which described the ‘unavoidable 20-50% devaluation in the US Dollar’, we would not recommend holding greenbacks.
Health Insurance
If you have existing health cover from a provider in your home country, don’t cancel it until you have fully explored all of your options, if any, here in Thailand.
It isn’t easy to obtain health cover in Thailand if you are over the age of 60, but if you have moved to Thailand with existing cover, your provider may offer continuing cover to you.
If you do not currently have existing medical cover you again need to explore your options carefully. Whilst the levels of cover are usually significantly higher when arranged through International providers, this comes at a cost, often more than five times the cost of the highest level of health cover with the best Thai based providers. Unless there is a compelling need for the additional levels of cover, such as significant time spent in the United States or other countries with very high medical costs, there is often little benefit derived from the additional premiums.
Some expat home-countries that provide free health care to its citizens are now imposing restrictions on those returning from overseas. In the UK, there is now a waiting period of 6 months before returning UK citizens can enjoy free medical treatment, making local medical cover even more important. This applies regardless of your age.
Property
Think hard before you buy property and then, think again. Property is a lot less liquid than financial markets investments. If you are buying anything other than a condominium in Thailand, you need to look very carefully at the ‘ownership’ arrangements. We would always recommend that you take professional independent advice from a Thai lawyer before making any property purchase.
Make a will
If you don’t have a will, your Thai assets are subject to Thai intestacy law when you die. This means that your Thai property, cash and stock market account will almost certainly pass to those other than whom you intended.
Life insurance
Many people have life insurance policies taken out before moving to Thailand. Very often these policies are set up in such a way as to be potentially taxable (often at very high rates of tax). This will also usually result in a very time consuming process in order for dependants to receive the proceeds of the policy.
These problems can be overcome by placing the life insurance policies into trust, a service that financial advisers offer free of charge to their clients.
If you are a working expat who is considering taking out insurance in Thailand, it is often advisable to have the policy written into trust from the outset, particularly if you are working in your own business or involved in any type of occupation that can be subject to penal litigation, such as lawyers, doctors and other professionals.
A protected legacy
Many expats have significant assets and their beneficiaries are not always able to manage such wealth in their best interests when you are no longer around. Your estate can be structured in a way that protects your loved ones from themselves and yet leaves you in control during your lifetime.
The particular structure used will depend on the personal circumstance of the person, including family structure, residence and nationality of family members and other dependants, location of assets as well as the net worth of the client.