It’s a dismal thought, but also a necessary one — with crew oftentraveling the world or embarking on adventurous activities, it’s important tohave your affairs straightened out when it comes to life and estate planning inthe event that something happens.
The key? Putting things in writing. “Leaving no writtenguidance means the law will decide who gets what if the worst were to happen,”says Mark Upton, director of Crew FO, which offers financial solutions tosuperyacht crew. “Even personal possessions such as watches and jewelry may endup with the wrong people,” he says.
And while sooner is always better than later, Peter Brookeof The Spectrum IFA Group points out that good estate planning doesn’t reallyhappen until you either have significant assets, such as houses, investments,etc., or direct beneficiaries, such as children.
Yet that doesn’t mean you can’t get started today — it’snever too early too think about the future. So, just what should you prepare? Considerthe following.
Technically speaking, a will, as most know, is a legaldocument stating your final wishes. As Upton puts it, a will means that nomatter how much or little you have, your wishes in relation to who gets whatare set in stone. “You avoid the high cost of litigation if someone claimsagainst the estate, and you keep control of access to your money,” he says.“You choose who administers your estate, and if you have children, who wouldhelp look after them if they were under eighteen.”
He stresses that the law makes zero provision for unmarriedpartners, so if you pass away leaving an unmarried partner, they will getnothing unless you made a will. Considering that crew often store much in adigital format these days, “Your will can also deal with who can access socialmedia accounts, cloud-based storage, and what might be sensitive informationcontained in medical records,” he adds.
Letters of Wishes
Although not legally binding, a letter of wishes givesguidance to the trustees and family members in exercising their discretion. It’sa private document of personal thoughts and can explain decisions made in thewill. As Upton puts it, it explains in your own words who should receivesentimental items.
He adds that accompanying a will with a letter of wishesmeans you can update the letter whenever you want instead of incurring a feeeach time to change your will.
According to Upton, if you have life insurance or thebenefit of a death in service scheme, you need to think about where the lumpsum would go when you pass away. Otherwise, it could fall into your estate andbecome subject to inheritance tax or end up being wasted if the wrong people benefitfrom what often are large sums of money.
That’s where a trust, which holds assets for abeneficiary(ies), comes in.
“Using a trust for life insurance and death in servicepayments can preserve the lump sum for family in a safe way and reduce the burdenof tax in the future,” says Upton. “If a partner survives you and meets someoneelse, if your insurance is held in a trust it can be protected for yourchildren or other family members.”
“Some very simple housekeeping can save a lot of unnecessaryprofessional fees, or even worse, avoid bank accounts going unnoticed and moneyending up with the government under intestacy laws,” says Upton, adding that aspreadsheet is a good way to make sure everything is easily accessible andnothing gets missed. It should be basic, consisting of information such as bankaccounts, pension, and investment, but secure.
Lasting Power ofAttorney
A lasting power of attorney means you can appoint someoneyou trust to act in your best interests rather than leave it to chance, says Upton,adding that many crew are putting these in place these days.
“When you are thousands of miles away from home and you needsomeone to pay a bill or make a financial transaction, they cannot do it unlessproperly authorized,” he says. “A lasting power of attorney gets around this.If the worst happens and you sustained a serious injury resulting in losingmental capacity or having sustained a life-ending injury requiring life-sustainingtreatment, you would need someone to help with medical and lifestyle decisionsand you can say whether or not you would want to receive treatment.”
While these administration basics can apply to all crew,Brooke points out that due to the varied range of nationalities and residenciesof crew, it’s impossible to go into too much detail about what to do withrespect to a will or trust. “It opens a whole discussion about domicile, whichis very complex and can be linked to residency,”
This gets especially tricky seeing as many crew don’t deemthemselves as a resident anywhere. Once you have a family and home, the bestthing to do, advises Brooke, is to take local advice to work out the best waysto structure your affairs in that jurisdiction.