Estate planning with an international element


Author: Emma Hurrell


What type of Will do I need if I have foreign assets?

If you own foreign assets, then you should consider putting in place a foreign Will in the jurisdictions in which you own those assets, in addition to a UK Will.  The advantage of this is that on your death, probate can be obtained more easily in each country if you have separate Wills to cover your assets in each jurisdiction.  This could be an advantage, especially if your executors would like to use your foreign assets to pay any UK Inheritance Tax, as obtaining probate in a foreign jurisdiction first would enable your executors to have access to those foreign assets.

However, if you draw up Wills in other jurisdictions, it is important that they do not revoke (and effectively “cancel”) your UK Will and this is something which you should raise with the foreign lawyer who is preparing a Will for you abroad.

What will happen to my foreign assets?

If you acquire any movable property abroad (bank accounts, for example), then either the laws of the jurisdiction in which you own those assets or UK law will apply.  Under UK law, if you are held to be UK domiciled, then the succession of this type of property (i.e. who receives your estate when you die) is likely to be governed by English law.  If you acquire any immovable property abroad (a house, for example), then this type of property is normally dealt with according to the rules applicable in the country in which the property is located.  However, you should also obtain advice on the foreign law implications from a foreign lawyer.

How might the “forced heirship” rules affect me?

Some countries have “forced heirship” rules, which state that part of a person’s estate must pass to certain close family members.  This means that, unlike in a UK Will, you cannot always leave your estate to the beneficiaries of your choice.  Different countries have their own laws stating which law should apply, but determining exactly which law does apply is by no means straightforward.  The EU Succession Regulation (Regulation) was therefore brought in recently to create more certainty when dealing with assets in different countries within the EU.

The Regulation applies to your estate if you own assets in more than one country and if at least one of those countries is an EU member state where the Regulation applies (all EU member states except for the UK, Ireland and Denmark).

Under the Regulation, the default position is that the law of the country where you are habitually resident when you die governs the succession of your estate.  This means that if you were regarded as being habitually resident in England but had bank accounts in France for example, then your bank accounts would be dealt with in accordance with English law.  However, this default position could be overridden if you were found to have been more closely connected with another country at the time of your death (for example, if you had only just stopped living in that country) or if you elect to apply the law of your nationality instead.  This type of election can be made in your Will.

It is important to note that as well as having an impact on who will inherit your estate when you die, the Regulation might also affect other aspects of your estate such as who will administer your estate and how it will be taxed on death.

How we can help you

We are able to advise you fully on your estate planning matters.  This includes preparing a Will that is tailored to your own specific requirements and taking into account the different types of assets which you may own in various jurisdictions.

If you have made a UK Will in the past, we recommend that it is reviewed as soon as possible, as it may need to be amended in light of the points mentioned above.  This is something on which we would be happy to advise you.

Emma Hurrell, Associate, Fladgate LLP (ehurrell@fladgate.com)

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