Making a Foreign Will
If you’re lucky enough to own property and assets abroad, staying on top of your affairs is vital. While you’ll want to speak to an estate planning expert such as Nick Hughes to discuss matters of Inheritance Tax and who gets what when you pass away, it’s also a good idea to create appropriate Wills to ensure your wishes are respected beyond the grave. While making a foreign Will or Wills is not compulsory, it could help in many ways. Let’s delve deeper.
What are the Benefits of Making a ‘Foreign Will’?
- It Follows the Law of the Land
There are many benefits to writing a foreign Will. Firstly, each country has their own rules and regulations regarding the validity of a Will, as well as estate administration and tax. The jurisdiction where your assets are held might not recognise or uphold what you said you want to happen to those assets in your English Will, so it’s good to create a Will in accordance with specific country laws to avoid surprises or complications down the line.
To zoom in closer, English and Welsh law is a ‘common law’ jurisdiction whereas European countries are a ‘civil law’ jurisdiction. Civil law jurisdictions don’t recognise the concept of Trusts. So if you’ve assets in a European country like Spain, this could cause huge problems from a tax perspective. Islamic nations follow a ‘Sharia law’ jurisdiction which also comes with its own set of Will-making guidelines.
- You Can Clarify Inheritance Tax Matters
Professional Kent tax advisors can help get your finances in order. However, Inheritance Tax rules in England are very different to Inheritance Tax rules abroad. Under English law, you can leave your assets to the people of your choice. This doesn’t have to be family members. In European countries such as France, Italy and Spain, specific laws state who your assets will go to when you die. Forced heirship rules mean you can’t exclude certain individuals like your children. If this is problematic, seeking help early and knowing the local law will allow for estate management that puts your mind at ease.
Some countries, like Spain, recognise that some testators who are not Spanish nationals want their own domestic laws to be applied when it comes to Inheritance Tax. But this is not always the case, so it’s really important to get professional advice and guidance.
Brussels IV and How it Affects Owned Property Abroad
The EU Succession Regulation, known as ‘Brussels IV’ states that the laws of the country where someone habitually resides will apply to the property upon their death. All Europe-based countries apart from the UK, Ireland and Denmark have opted into this regulation to make it easier for heirs to settle estates. It would still be advisable to make a ‘choice of law’ statement in your Will, however, to ensure the law of your choice applies.
Get your estate in order by creating a Will or a series of Wills if you have property abroad.