Foreign Assets and Wills: What You Need to Know

When planning your estate, one critical aspect to consider is the management of foreign assets. There has been an increase in the mobility of the population with more accessibility to travel around the world and also move to live in different countries on a temporary or permanent basis.

As globalization increases, many individuals find themselves owning property or financial investments outside their home country. Understanding how to include these assets in your will is essential for effective estate planning. It also increases both the importance and complexity of having a Will in place.

Understanding Foreign Assets
Foreign assets can include real estate, bank accounts, investments, and other valuables located outside your country of residence. These assets may be subject to different laws and regulations, making it crucial to address them specifically in your will.

For example, if you have a holiday home or property in another country, would you know what would happen to that property on your death? If you are living abroad on a temporary basis and have a bank account in another country, do you know what would happen to that bank account on death and how your loved ones would obtain those funds?

Legal Considerations
1. Jurisdiction: Different countries have varying laws regarding inheritance, taxation, and property rights. The jurisdiction where the asset is located will often govern its disposition. For example, a property in France will be subject to French inheritance laws.
2. Conflict of Laws: If your home country and the foreign country have conflicting laws regarding inheritance, this can complicate the distribution of your assets. It’s important to consult legal experts in both jurisdictions to navigate these issues.
3. Tax Implications: Foreign assets may be subject to taxes both in your home country and the country where the assets are located. Understanding these tax obligations is crucial for effective estate planning and can affect the net value of the assets passed on to heirs.

Including Foreign Assets in Your Will
1. Specific Bequests: Clearly specify any foreign assets in your will. Use precise descriptions, including location, type of asset, and any relevant account numbers. This minimizes ambiguity and ensures that your intentions are clear.
2. Multiple Wills: In some cases, it may be advisable to create separate wills for different jurisdictions. This can simplify the process of administering your estate in each country, although you must ensure that these wills do not conflict with each other. It will be important to inform any legal advisors or solicitors that you are speaking to, if you already have a Will in place so that if another Will is required in another country, then they can ensure that they don’t revoke the Will you already have in place. The legal advisor would also be interested in seeing a copy of any current Will in place so that they can make sure that they have all the information.
3. Local Legal Advice: Engaging a local attorney familiar with the laws governing inheritance in the country where the asset is located can be invaluable. They can provide guidance on how to structure your will to comply with local laws. It is highly recommended to speak to a legal advisor in that country so that they can advise you on the inheritance laws, any tax advice and whether you need to have a Will in that country.
4. Updating Your Will: Regularly review and update your will, especially after significant life changes (e.g., marriage, divorce, birth of children) or changes in asset ownership. This ensures that your estate plan remains aligned with your current circumstances.

The Role of Trusts
In some cases, utilizing trusts can be an effective way to manage foreign assets. Trusts can offer benefits such as:
• Privacy: Trusts are not typically subject to probate, allowing for a more private distribution of assets.
• Control: Trusts can provide specific instructions on how and when assets are distributed to heirs, which can be particularly useful for minor children or beneficiaries with special needs.
• Tax Efficiency: Depending on the structure of the trust, it may offer tax advantages in certain jurisdictions.

Conclusion
Incorporating foreign assets into your estate planning is a complex but necessary task. By understanding the legal landscape, consulting with professionals in relevant jurisdictions, and clearly articulating your wishes in your will, you can ensure that your foreign assets are managed according to your intentions. Careful planning not only protects your assets but also provides peace of mind for you and your heirs.

Our team at Baines Bagguley Penhale have the relevant expertise and experience, to provide you with appropriate advice.
For further information please visit our website at www.bbpsolicitors.co.uk. Or contact us for further information on 01524 401010.