Two weeks ago, I replied to a reader who challenged me about neglecting Africa as a potential place to live or acquire property. I asked whether you would consider Africa, either for living or investing, and why or why not. Unsurprisingly, there wasn’t much support for the idea. Here are some of the replies, and my commentary in response:
The reason I would not consider a move to Africa is the same reason I would not consider a move to an Asian country. I am white. Wherever I retire to, I want to blend in and disappear among the locals. I simply do not want to stand out like a tourist, an easy target or an outsider. This is not a racist view, rather I’m thinking from a safety perspective.
That’s understandable, and certainly if one looks like a tourist or gullible foreigner, you’ll probably be treated like one — anywhere in the world. Nevertheless, tens of thousands of pale-skinned Europeans and an increasing number of North Americans call Africa and Southeast Asia home, and their experience is much the same as mine: Over time, you get used to it, and as you do, you start to look like you belong there. The truth is that it isn’t the color of one’s skin that makes one stand out — it’s the way you carry yourself and interact with people. In addition to living in South Africa (which is a special case), I’ve spent years of my life all over southern and eastern Africa and South and Southeast Asia. Trust me on this: The locals know a long-term resident from a tourist and act accordingly. All it takes is a few subtle cues to signal that you aren’t to be trifled with, and generally you won’t be. Nevertheless, that sort of life isn’t for everyone — I do understand.
Don’t know much about Africa. Not much interest in that part of the world, though I do appreciate the nature there. The reason I am writing is that I am surprised you had nobody recommending Southeast Asia. I have been living in Thailand for five years now and I truly love it. Love the culture, the people, the food and the cost of living. Medical care is excellent and affordable. And then there is the weather, the beaches and the restaurants. Hardest part each morning is to figure out what shorts and T-shirt I should wear followed by what restaurants I should eat in today. Personally, I think Thai food is among the best cuisine in the world. It would be good to enlighten your readers about the options here in Asia.
You basically make my previous point! It’s very much a matter of personal taste. I also love Southeast Asia — I’ve spent a lot of time in Thailand, as well as Cambodia, Vietnam, Indonesia and Malaysia. Thailand is unquestionably the most foreigner-friendly country in the region, with the most advanced economy and the highest levels of service, medical care and public amenities. And yes, the food is better than good — it’s a world-beater. I love it so much that I’ve learnt to make many Thai dishes, like larb moo and tom yum goong, and I even make my own green curry paste.
There is one thing about Thailand, however, that worries me … the politics. Despite being mostly Buddhists, Thais are very passionate people, and their political life is a lot like Latin America’s in the 1970s and ‘80s. The political and military elite love to play the rural folks against the urban dwellers, and, of course, the country is in a (fairly laid-back) military dictatorship at the moment. And don’t insult the king! You could end up in jail.
In December’s Sovereign Confidential you said that a “trust created under your last will and testament” allows transfers to the trust to be free of estate taxes. This doesn’t seem correct, and could be misleading, because it would allow individuals to simply transfer all assets, of any amount, and escape estate taxes entirely.
I can see how the wording of that is misleading — thanks for pointing it out. That sometimes happens when a more complex topic is included in a broader newsletter. Let me clarify.
As you probably know, if you establish a revocable living trust during your lifetime, its assets do not form part of your estate and are thus not subject to estate tax. However, it is possible to specify in your will that the assets in your revocable living trust be transferred to a second “residuary” or “marital” trust when you die, where your surviving spouse is the beneficiary. Because the marital deduction allows unlimited bequests to one’s spouse — you’re the same tax entity, after all — the transfer does not attract liability for estate taxes. Your surviving spouse may serve as the trustee of the marital trust, giving him or her the power to invest assets as he or she desires.
A related approach is the “credit trust.” This is also established by your will for the benefit of your surviving spouse. The trust is funded with a portion of your assets up to the estate tax exemption amount. By directing assets to this trust rather than to your surviving spouse outright, you preserve your exemption amount, which can be transferred to your surviving spouse, and thus avoid subjecting the same assets to estate taxes upon the surviving spouse’s death.
Editor, Sovereign Confidential