International connections are now a routine feature of private client work. A client may live in the UK but own assets abroad (or vice versa), may be working in the UK or abroad on a short-term basis or be part of a family whose wealth and succession planning span several jurisdictions.
Will validity - the ‘hooks’
The Wills Act 1963 (the “1963 Act”) provides a framework for recognising the formal validity of wills i.e., whether they have been properly executed. These rules are of particular importance where a client has connections with different countries, but they can be easily overlooked. In broad terms, a will is to be treated as properly executed where it is signed in accordance with: -
• the law of the place where the will was signed;
• the law of the place where the testator was domiciled or habitually resident (either when executed or at the testator’s death); or
• the law of the place of which the testator was a national.
Additionally, if a will is seeking to deal with immovable property (real estate), it will be valid in respect of that immovable property if it is signed in accordance with the law of place where the property is situated.
This means a will prepared abroad may be capable of taking effect in the UK, even where its format is unfamiliar (albeit an opinion from a foreign solicitor may be required to satisfy our courts). It also means UK advisors must understand a client’s connections with other countries.
The 1963 Act framework (which is mirrored in many other countries) is helpful for internationally mobile clients. But it should not lead to quick conclusions: depending on the limb (or ‘hook’) of the 1963 Act being relied on, further investigations may be required regarding the deceased’s personal position to support the analysis. For example, to definitively establish their domicile or habitual residence at the relevant time.
UK wills
UK advisors should be familiar with the provisions of the 1963 Act, and it should always be at the forefront of their minds when working with international clients. We have seen occasions (albeit, rarely, thankfully) where wills prepared for international clients under Scots law or the law of England & Wales have not been validly executed because assumptions have been made and there was no ‘hook’.
Imagine, for example, a Scots law will is being prepared for a client who is living temporarily in Scotland for work, and they sign it (in accordance with Scots law) when they are back ‘home’ visiting family. There would be real concerns as to whether such a will has been validly executed. Has it been signed in accordance with law of the place of domicile, habitual residence, nationality or execution? Probably not. It is incumbent on advisors not to make assumptions and to make full enquiries as to a client’s past movements and future intentions.
Why “valid” is not the whole answer
Even if a foreign will is capable of recognition in the UK under the 1963 Act, that does not necessarily mean that it covers all the testator’s assets or that it avoids administrative difficulty.
It may have been prepared for a particular country. It may have been drafted with local assets in mind or at a particular point in time (and not necessarily reflect any change in circumstances). It may also seek to sit alongside another will(s). It may use legal terminology from another jurisdiction which is difficult to translate across borders. Some (or all) of these matters may warrant consideration where a foreign will purports to decide the succession to UK estate.
It can be tempting to make one of two assumptions about a foreign will: that it must be ineffective in the UK, or that it must be fine because it was validly prepared abroad. However, one mustn’t be too hasty.
There are fundamental differences between different legal systems. For example, common law jurisdictions tend to recognise the role of an executor, whereas civil law jurisdictions usually do not. Even if a foreign will has been validly executed (in accordance with the above framework), it does not mean that it is a useful document in each jurisdiction.
Cross-border planning needs joined-up advice
In reality, international estate planning rarely involves a single will.
A client may have advisors in more than one country, each dealing with a different part of the picture: different wills for different assets; distinct administrative procedures; and, potentially, different tax liabilities attaching to the same assets. That may be entirely appropriate. But it also increases the risk that documents prepared in different jurisdictions will ‘clash’ with each other.
A UK private wealth lawyer with cross-border experience can help identify how the UK rules interact with the client’s broader arrangements. This may involve consideration of the following matters: the status of a foreign will; how multiple wills ‘fit’ together; whether additional documents are needed; and whether, when and from whom advice from another jurisdiction should be sought.
The practical message
A will executed in a different jurisdiction may still be recognised as valid for UK estate purposes. UK law recognises that modern clients may live, invest and plan across borders. Equally, though, a will, even one prepared in the UK, might fall foul of the rules if one of the ‘hooks’ is not available. At the very least, UK advisors should query the consequences of a client signing a document outside of the UK.
The existence of flexible rules should not encourage quick conclusions or assumptions. Domicile remains imperative for succession analysis, but recent changes have put a new focus on long-term residence for UK inheritance tax purposes. More than ever, advisors must ask the probing questions to understand a client’s background and their future intentions. Know your client. And know the ‘hooks’.
Contributors
Partner
Associate
