Estate Planning With International Assets4 Jul 2019 | Jan Atkinson
As more of us become internationally mobile, it’s increasingly common to own assets abroad. Yet lawyers say many people are failing to take this into account when making a will, creating costly probate nightmares for those left behind.
Whether it’s opening a foreign bank account, buying a holiday home or setting up an offshore trust, owning assets in more than one country can leave loved ones to negotiate a complex, protracted and costly probate administration process.
Jan Atkinson, partner and head of private client at London law firm, Osbornes Law explains, “Wills made in this country are not always effective in other jurisdictions and multiple wills can contradict and override each other, leading to confusion and legal wrangling over your true wishes.”
She recommends making both a local will in the country where additional assets are located (just dealing with those assets) as well as an overarching ‘worldwide will’ covering the remainder of the estate, apart from those non-English assets. These both need to be professionally dealt with and care needs to be taken to avoid inadvertent revocation of the earlier of the two wills.
“Increasingly people are living and working abroad, buying properties, opening bank accounts or marrying foreign nationals with assets in another country,” says Jan, “Making a will in these circumstances is not straightforward and in order to avoid potential headaches for loved ones, multiple wills need to be considered.”
Relying on just one will risks prolonging the probate process, potentially for years. Assets in each country have to be dealt with one country at a time and in many jurisdictions, probate takes longer than in the UK. Making local wills to cover foreign assets will speed up the process as the wills can be processed at the same time and the estate assets administered concurrently.
Jan says, “I have seen cases involving multiple wills in different jurisdictions where the most recent will unintentionally cancels the others. Sometimes failure to make a local will means foreign property is subjected to stringent and unforeseen forced heirship rules that operate in certain jurisdictions. These situations can mean leaving loved ones without their expected inheritance or charities without bequests. Disputes can arise between family members, whilst executors who are potentially liable for costs find themselves struggling to deal with the probate process.”
In a recent estate on which Jan advised, the deceased had made four wills in rapid succession, intending three of them to each deal with assets in a particular country. The last will however, had not been correctly drafted and inadvertently cancelled the earlier wills, leaving the executor in a quandary as to how best to proceed and the beneficiaries of the earlier wills being deprived of what the deceased intended them to receive. This unfortunate situation is unlikely to be resolved without court proceedings in at least two countries, which will seriously deplete the estate assets.
Watertight estate planning takes time and requires competent professional advice but will ultimately mean peace of mind that wishes will be followed and disputes and lengthy delays avoided.
Jan’s top tips to follow when you have overseas assets are:
1. Make a worldwide will in the country where you were born/have most of your assets/live.
2. Make a local will in each country where you have additional assets.
3. Do not prepare the wills yourself. The cost of using a STEP (Society of Trust and Estate Practitioners) qualified lawyer in each country where you own assets to do this will be far, far less than the cost of unforeseen consequences being sorted out after your death.