Many people diversify their investments both in type and, increasingly, in geography. While this makes for a more disaster-proof portfolio, it also complicates matters such as tax and inheritance. Your last Will and testament is extremely important when it comes to foreign assets.
For most people, the choice will be between using their ‘home’ Will to deal with their affairs in a foreign country or using a Will drawn up in the other country they have dealings with.
However, in some cases there is a third option and that is having a Will prepared in accordance with the Washington Convention on the Form of International Wills. Unfortunately, relatively few states are signatory to this convention and it generally seems easier to rely upon a will made in your own country or in the country in which you have assets. Read more about International Wills..
Why make a Will?
If you do not make a Will, then when you die your property will be dealt with by following a set of rules known as the Intestacy Rules.
Which rules will apply will depend upon the country of which you are a national (citizen) and/or the country (or even region, especially in the case of the US – see United States intestacy overview here) where the property in question is located. You can see where you stand under the UK intestacy rules here.
In either case, what happens may not be what you would want to happen to your property.
In some cases, the rules can have results totally different from what you would have wanted or expected. This is particularly true if your family life is complicated. For example, if you live with someone to whom you are not married or if you have children by more than one relationship.
In almost every case, the rules will not give you the same level of flexibility or control as you would get from a Will.
An additional problem is that relying on the rules alone can result in it taking longer to dealing with your international property than would be the case if you had a Will.
Why make a foreign Will?
If you have assets in a country other than your ‘home’ country, it is usually sensible to make a special Will to deal with those assets.
This is for a number of reasons:
- If you do not make a special Will then your assets are likely to be dealt with in accordance with any ‘home’ Will. This is, usually, a lot slower and more expensive that dealing with them under a local Will.
- The arrangements made in your ‘home’ Will are usually hideously inefficient in tax terms in the country where the property is located. This can increase, enormously, the taxes payable on your death.
- It makes it much easier to deal with your affairs. Your heirs or executors can be dealing with both (or all) of the countries at the same time. If you rely on one Will only, you will generally need to finish the formalities in your’ home’ country before anything can be done in the other countries.
Who can make a Will?
Your ability to make a Will is regulated by international law and treaty.
Generally, any adult of sound mind can make a Will.
In certain cases younger people can as well.
What types of Will are available for a foreigner?
This varies, quite a lot, from country to country.
There are, typically:
- Formal Wills, signed in front of as Notary
- Hand written Wills, sometimes acknowledged in front of a Notary
- Informal Wills
In some countries (such as the US) it might be better to make some other form of arrangement to deal with your assets on your death, such as a ‘revocable trust’. This is similar to a Will in its effect but can be a lot cheaper in tax and expenses when you die.
See our country-specific guides for more information.
In each case, there are advantages and disadvantages to any choice you make.
A lawyer can discuss these with you and help you decide which option is best for you.
What formalities must I follow to make a Will in a foreign country?
These, too, vary from country to country.
They are, again, regulated by international law and treaty.
In general, your Will is valid in terms of the formalities used if it is made in accordance with the formalities of the country of which you are a national or the place where it was made.
It is important to get the formalities right. If you do not, the Will is likely to be considered invalid and, of course, this is not likely to be discovered until after you die – by which time it is too late to put the error right.
Registering a Will in a foreign country
In some countries, it is mandatory to register a Will with the appropriate authority. In others this is merely recommended, or obligatory only for certain types of Will. In some countries, no register of Wills exists at all.
How long does it take to make a foreign Will?
In cases of urgency, a law firm can usually arrange for a Will to be prepared within a few hours. This may not be the most efficient of Wills in terms of the cost of dealing with the estate, but it will be legally valid and a lot better than no Will at all.
However, this is clearly the expensive and non-ideal option.
Typically, making a Will takes a couple of weeks.
How much does it cost to make a foreign Will?
This varies from country to country.
A fee for a simple foreign Will are likely to cost about US$450/£350 – plus, in many cases, the fees of the Notary in front of whom the Will must be signed.
What else must I do?
Let your heirs know what you’re doing
Once you’ve made and received your foreign Will, we highly recommend letting your heirs (children or otherwise) have a copy of the document. This is the best solution if you’re not too concerned about people knowing your plans. If you are more worried about privacy, at least let your heirs know:
- Where to find your copy of the Will
- The name and address of the Notary who prepared it for you
- The Wills Registry/other official body reference number, if applicable
While you’re at it, it’s a helpful extra step to put your new Will in a big envelope labelled “Will”. Store it with an up-to-date list of all of your assets – in the case of investments, include the reference number and person who you contact about them. This will make life much easier for your heirs.
Revising your current Will
This is essential to avoid conflicts between the two Wills.
What happens when I die?
This, too, varies from country to country. See our various guides to dealing with an inheritance for more information. Our global guide to dealing with an inheritance is coming soon.
Probating a Will
In many cases (especially in countries which work from Common Law systems – this includes England and Wales, the US, Canada, Pakistan, India, Singapore, New Zealand and Australia), a process of validation is necessary – to “probate” the Will.
Your executor may require probate from your home country and the countries in which you have assets. Some countries have reciprocal deals to avoid this – for example, the Colonial Probate Act of England and Wales.
All of this can get complicated, as you can imagine: it is a good idea to talk to a specialist international probate lawyer if you are concerned.
If you are the person dealing with an inheritance like this, we strongly recommend that you take specialist legal advice: lawyers experienced in this field will make sure you stay on the right side of inheritance and tax laws. They will also make sure you don’t miss deadlines – such things can be extremely costly.
Probate alternatives in other countries
If your assets are all in the European Union, a European Certificate of Succession (ECS) is a good document to procure. The certificate enables heirs and executors to prove their status in all EU countries (except in Ireland, the UK and Denmark, who don’t participate in EU inheritance regulation) without any further special procedure. Download a sample of the ECS here.
Acceptance of inheritance
In some countries, heirs must officially accept their inheritance in order to receive it.
Foreign inheritance tax
If you are making a Will for a foreign country, be sure to research the tax laws for that country:
- Overseas inheritance tax varies massively.
- The way a foreign country’s tax laws interact with your home country’s laws might be complicated.
- The way your home country’s tax laws deal with foreign inheritance in general might be complicated.
Take advice from a specialist while making your Will, as the tax-saving opportunities can be huge.