In our increasingly globalised world, it’s becoming common for individuals to own assets abroad. Whether it’s a holiday home in Spain, a flat for your child studying in Amsterdam, or a retirement villa in Tenerife, dealing with foreign assets in your Will requires careful consideration. This guide will help you understand the key aspects of foreign assets in estate planning and why seeking specialised legal advice is crucial.
The Complexity of Foreign Assets in Wills
When you own property or assets in another country, simply including them in your UK will isn’t always sufficient. Different countries have varying laws regarding inheritance, property ownership, and estate administration. This complexity is why A.D.E Wills, while experts in UK Wills, always recommend seeking advice from lawyers in the relevant jurisdictions for any foreign assets.
Do You Need a Separate ‘Foreign Will’?
If you’re domiciled in England & Wales, you have two main options:
1. Create a single Will in England covering all your assets, including those abroad.
2. Make separate Wills: one for your UK assets and others for each country where you hold property.
While it may be possible to cover everything in a single UK Will, creating separate Wills for foreign assets often proves advantageous. Here’s why:
Advantages of Separate Foreign Wills:
1. Compliance with Local Laws:
Different countries operate under varying legal systems, which can significantly impact how your Will is interpreted and executed. For instance:
– England & Wales follow ‘common law’
– Most European countries use ‘civil law’
– Islamic nations adhere to ‘Sharia law’
A Will prepared by local lawyers will ensure compliance with these differing systems.
2. Avoiding Delays in Estate Administration:
Having a single Will for worldwide assets can lead to significant delays. Your UK will must go through probate in England, then be notarised and legalised for use in other countries. Separate Wills can allow for simultaneous processing in different jurisdictions.
3. Addressing Specific Local Requirements:
Some countries have forced heirship rules or don’t recognise certain legal concepts (like trusts) that are common in the UK. Local legal experts can navigate these nuances effectively.
Understanding Domicile and Its Importance
Your domicile status can significantly affect how your assets are treated upon death. It’s not the same as residency and is determined by factors such as where you were born, where your father was born, and where you’ve lived. This complex area often requires expert legal advice to navigate correctly.
Tax Implications of Foreign Assets
Inheritance tax (IHT) can be particularly complex with foreign assets. If you’re domiciled in England & Wales, IHT may apply to your foreign assets, potentially resulting in double taxation. However, many countries have double taxation agreements to prevent this. It’s crucial to seek expert advice on the specific tax implications for your situation.
Steps to Take When Dealing with Foreign Assets in Your Will:
1. Identify all your foreign assets, including digital ones.
2. Research the inheritance laws in each relevant country.
3. Consider creating separate Wills for each jurisdiction.
4. Consult with legal experts in each country where you hold assets.
5. Ensure your Wills don’t accidentally revoke each other.
6. Review your domicile status and its implications.
7. Investigate potential tax liabilities and mitigation strategies.
8. Keep your Wills updated, especially after major life changes or asset acquisitions.
The Importance of Local Legal Expertise
When dealing with international assets, it’s crucial to work with professionals who have specific expertise in the relevant jurisdictions. A.D.E Wills strongly recommends seeking advice from lawyers in the countries where you hold assets. These local experts will:
– Have in-depth knowledge of local inheritance laws
– Understand specific legal requirements for Will creation and execution
– Be aware of any recent changes in local estate planning laws
– Provide insights into local tax implications
How A.D.E Wills Can Help
At A.D.E Wills, we specialise in creating comprehensive UK Wills. While we do not directly handle foreign Wills, we can:
– Help you create a robust UK Will
– Advise on the importance of considering your foreign assets in estate planning
– Emphasise the need for seeking local legal advice for foreign assets
– Provide general guidance on international estate planning considerations
We always stress to our clients the importance of consulting with lawyers in the relevant jurisdictions for any foreign assets. This ensures that your entire estate, both in the UK and abroad, is properly accounted for and managed according to your wishes and local laws.
The Takeaway
Dealing with foreign assets in your will adds a layer of complexity to estate planning. While A.D.E Wills can help you create a comprehensive UK will, we strongly advise seeking specialized legal counsel in each country where you hold assets. This approach ensures that your entire estate is properly managed, your wishes are respected, and your legacy is protected across borders.
For assistance with your UK will and guidance on handling foreign assets in your estate planning, contact A.D.E Wills at 01865 507174 or info@adewills.co.uk. We’re here to help you navigate the complexities of estate planning and point you in the right direction for international considerations.
