Dazey

Hi all, I'm hoping someone has experience with whether or not you should keep your life insurance/assurance in the UK or not once you've moved to the US, and also if your will needs to be re-done.

My husband and I (both Americans) recently moved back after several years in the UK. We obtained life assurance there, and I didn't realize the best thing to do was for me to buy it on my husband. We instead had him buy it, but then it didn't let him list beneficiaries. Instead, it will go to his estate. So, we had a will made in the UK stating his estate goes to me.

Now we are back in the States. We always assumed we'd just get a new policy here and cancel the old one, but it turns out we'd pay more for less coverage here (possibly because he's a couple of years older). My understanding is it's best to have a will in the country where you live, but our UK will dictates how our UK life assurance will be paid out, and I don't know if that will work as smoothly with a US will.

Anyone have any experience with this? Will it be hard to collect on the life insurance in the unlikely event I ever need to? Will it matter if I change wills to the US? Also, this is life insurance for a 20-year term, so it would only pay out if something happened to my husband in that time period.

Bob

Few threads on the subject, difference circumstances have different opinions.

Some say have a will covering assets in that country, others just to have one where you are domiciled.

Probably all depends on the details of the policy as well as any local state laws.

celticgrid

I don't think you will have a problem.

We have some UK based life insurance which, as with yours, would cost somewhat more to replicate over here. When we moved across the company (Norwich Union or whatever they are called now) happily changed all the details re. our address and the change of country was not an issue, as long as we keep paying the premiums!

We remade the wills locally here and neither the attorney we used, nor the specialist executor involved, foresee any issue with the fact there is UK-based life insurance in the mix. A bit more hassle, but no real grief.

I will report back should I be in a position to add actual experience, though you may need a ouija board to access that report.

slummymummy

We also have UK life insurance. Cancelled the direct debits because we assumed it was not valid anymore but we were told it is still valid even though we live over here, so started paying again! It's with Aviva. Obviously you need to check if yours is valid.

Wills I don't know... We only have a UK one as most our assets are there. But we live here so probably best to have one here too.

JAJ

1. Normally you just want to have one will, in the place where you normally live.
If you have assets somewhere that does not probate out of jurisdiction wills (most jurisidictions do accept non-local wills), then you may need a second will. However this is something you need to be careful about that they do not contradict each other.

2. Unless there is wording to the contrary in the policy document, or unless you took out the policy just before emigrating, your U.K. life insurance should still be valid.

3. Normally, if you want to shed your U.K. domicile (that affects liability to Inheritance Tax), you normally want to start by making a non-U.K. will. If you're of U.S. origin you may not have acquired a U.K. domicile unless you became British citizens, if you have such a domicile you probably want to lose it.

Dazey

Thanks for all the tips. Our insurance is with Aviva and we have already changed the address, no problem. My understanding is we can keep it as long as payments are made from a UK account, which is why we left money in there and continued the direct debit. I guess we will go ahead and get a will made here then, and hopefully all will be well.

JAJ

Many people have done this. One complication is that if the amount is significant (GBP325,000 or more) it could cause a liability to Inheritance Tax as a U.K. situated asset. Get professional advice if this is important.

Also- re. the bank account, depending on how much funds it contains, you may have to report it on your U.S. tax return (FBAR, FATCA etc) and if it pays interest, you have to declare the interest.

Again - normally the best strategy. Your existing U.K. wills should normally be acceptable as out-of-jurisdiction wills if you were to die in the meantime, however you would need to verify this with an attorney in your state.