Do you need a will for overseas assets?

In our increasingly globalised world, many individuals find themselves owning assets in multiple countries: a holiday home in Spain; investments in Singapore; or a bank account in Australia. Owning overseas assets can present challenges with estate planning. One important question is whether you need a will specifically for your overseas assets.

What are the legal issues associated with owning foreign assets?

Owning assets abroad involves grappling with a unique set of legal issues. Every country takes its own distinct approach to inheritance and taxation of assets on death.

As part of your estate planning, it is vital to consider the laws of the countries with which you have connections, including those where you hold assets. In some situations, having a will in another country where you hold assets not only ensures your wishes are given effect to, but also reduces the risk of expensive and lengthy delays in estate administration.

What matters most in international estate planning?

There are three key issues that need to be considered where international assets are concerned:

1. Where are the assets located?
   
   Every country will have its own system to determine what happens to assets when someone dies. For example, many countries have a system of 'forced heirship' which means that certain relatives are protected from disinheritance. Different jurisdictions will have different rules on taxes which need to be paid in the event of death (either by your estate, or by your beneficiaries).There will necessarily be distinct procedural rules in each country that need to be followed before your beneficiaries can inherit your estate.
   
   
2. What are the assets?
   
   The nature of the assets you own abroad does play a role in determining the need for a foreign will. Generally, where someone owns 'heritable property' e.g., a house or flat, outside the UK, it will be the law of the land where the property is situated that will determine how it is inherited. This is why it can be important to have a valid will governing succession to it.
   
   
3. Who is to inherit what?
   
   You may have different wishes in terms of who is to inherit different assets. Where assets are held internationally, there needs to be some coordination in terms of your estate planning to ensure that the assets in each jurisdiction are inherited by your intended beneficiary.

Will I pay tax more than once?

Taxation of assets on death is an important consideration in international estate planning. Every country takes a different approach to ) tax rules applicable on death, and there will often be a need for coordination between your UK advisor and an advisor based in the country where your assets are located to ensure that that there are no surprises! This could involve pro-active tax planning in life, or relocating assets to benefit from tax treaties in place between the UK and other countries.

What are the practical considerations of having multiple wills?

Having wills in multiple jurisdictions is a practical solution to avoiding most of the issues associated with international estates. However, there are some practical matters that need to be considered:

1. Thought needs to be given to how different wills are drafted, not least to avoid your UK and foreign will(s) from conflicting with each other and causing confusion over how your estate is to be inherited. That can involve some investment at the outset, but avoids unintended and costly consequences later.
   
   
2. English, while widely spoken, is not necessarily the first language of every country and may not translate accurately i.e., having a will, written in English but drafted under the laws of the country where your assets are situated, may not be the best course. There is merit in having wills in the language of the country where your assets are located.

Is a single will an option for international estates?

Potentially, but it depends on what assets you have, where they are located and your intentions for your estate.

Why should I speak to an experienced lawyer?

International or 'cross border' estates involve consideration of something that other estates do not: the rules of another country. A lawyer that is experienced in advising on these kinds of estates will be mindful of the key succession and tax issues that need to be considered, and will be able to work collaboratively with foreign lawyers to design a comprehensive plan for your estate.

How should you deal with your international estate?

Approaching estate planning for foreign assets requires a strategic and informed approach. Here are some key recommendations:

1. Prepare an inventory of your assets: The starting point of any estate planning exercise is for you to have a clear idea of what you own, and where it is located.
   
   
2. Instruct an experienced 'cross-border' lawyer: Consult with a lawyer that (i) is able to advise you on your UK estate and tax planning, and (ii) is experienced in coordinating with foreign lawyers to design a plan which includes your foreign assets.
   
   
3. Keep your arrangements under review: Everything changes with the passage of time and your estate planning is no different. Keeping your situation under review will ensure that your estate planning is fit for purpose.
   

International estate planning can be complicated and does warrant the involvement of experienced, knowledgeable lawyers that understand the key issues at play. If you need guidance on how to approach succession to assets abroad, please get in touch with our international wills and estate planning lawyers.