29/06/2023 by Northwood Banks & Co
Wills & Assets in Foreign Countries
What happens if you have assets overseas when you pass away?
A Will, as you will already know, is a legal document stating how your assets will be distributed in accordance with your wishes when you pass on. Therefore, it is especially important that your Will is professionally written as this ensures that loved ones receive what is intended, plus it can also be used for tax planning. However, what happens if you have assets overseas?
Foreign Assets Included in a Will
Inheritance laws are likely to differ from one country to the next and so, even having a Will in place may not mean that your beneficiaries will receive what you have left for them. Something known as forced heirship might come into play which means that others may be legally entitled to your estate. Furthermore, it might also mean that there are additional tax considerations required as part of your estate planning.
When creating your Will you will need to disclose if you have assets, such as property or savings in other countries. It is vital to obtain the correct legal advice as this will ensure your Will is drafted correctly in order to allow for assets held globally. You might also want to consider creating Wills in different countries although they would also need to be drafted correctly to ensure they can work side by side without the risk of one revoking the other.
If a Will is created abroad which includes assets that are held in England or Wales, then additional consideration is required to ensure that when it is executed, it can still be proven in court.
Bringing Together Succession Laws Within EU Member States
Succession laws across EU member states have been unified using the EU Succession Regulation. For those who own assets within these EU member states their situation will be one in which the succession of these assets upon death will be handled by the law of the country in which they are situated. In contrast, an individual might choose to have a clause included in the Will that stipulates that they want the law of the country in which they reside and are national to, apply for the administration and distribution of those elements of their estate held in the EU.
The benefit of this is that if an individual is English and is preparing a Will in France in order to cover any French assets, they can elect their estate to be handled in accordance with laws in England which means that their estate will avoid French forced heirship rules.
This is true even though the UK never signed up to the EU Succession Regulation and has left the EU. However, the succession of immovable English property such as land or buildings will be governed under English law even if an EU national makes a similar election in their Will. For assets that can be moved, then these will be governed by the law of the state in which the testator was domiciled at their time of their passing.
These rules can be complicated and it is vital that professional advice is sought if you have assets abroad to consider in your estate planning.