How to protect your family and wealth in the face of the Covid-19 pandemic?
6 April 2020In an unsettling time as this, it is of paramount significance to secure a safe and financially stable environment for you and your family.
We illustrate below (relatively to Bulgaria – where your assets or affairs may fully or partially be) some of the best practices to consider when preparing for a global pandemic that may disrupt your normal pace of life for weeks or even months. Flexibility and anticipation are crucial when making any arrangements.
1) Arrange for a delegate in emergencies
The situation may drastically change and it is crucial that you are able to hand over your personal affairs, whether medical, legal or financial, to a trusted family member or advisor or to an appropriately governed structure. In Bulgaria, you could delegate powers by way of executing a power of attorney.
2) Wealth and corporate restructuring
Identify a safe place where you can store your ownership documents, financial records and other valuables and make sure to create a way for your trusted family members or advisors to find them in case of an emergency.
Restructure your corporate affairs so that you can make decisions remotely.
Ensure if possible that you have a locally compatible digital signature to optimise the level of security. While in principle all EU issued signatures ought to work, in practice we find that Bulgarian government agencies, notaries and banks tend to accept locally issued signatures from several suppliers.
3) Draft a will
Without a will, the Bulgarian position is to reserve shares of your assets for your spouse and children. This type of ‘reserved share’ inheritance law applies elsewhere (e.g., in France, Germany, Spain and Russia). The exact distribution may vary from country to country and it is crucial to have a contingency plan. The applicable succession law would depend on factors such as the place of last habitual residence of the deceased, country of nationality, country, in which your real estate is located.
4) Create an Emergency Fund
Open a bank account or create a fund which allows for your loved ones to have quick access to funds and be financially secure. This should help facilitate them including e.g. by funding their costs of stepping into ownership of your assets as heirs as needed.
5) Check you existing structures
If your structures were created some time ago, please check if they are still legally sound and continue to serve your purposes fully.
6) Get Appropriate Insurance Coverage
Review your assets and structures and make sure to consider the risks and potential damages that your business may be facing. It may be wise or necessary to have additional insurance in place.
7) Obtain a second passport
Being a global citizen is more important than ever. Different countries provide for different healthcare systems and opportunity to travel freely. Having the option to move quickly and to a developed country may at times be the best solution and a potential lifelong insurance for times of crisis.