Countries around the world have different inheritance and tax laws. As someone who is a domicile of England and Wales, you can make a foreign will with a lawyer which covers your overseas assets. However, in some cases it would be advisable to create a separate will to cover your assets in other countries.
In this article we will take a look at ‘foreign wills’, and whether you should make a foreign will for assets that you may have abroad.
A foreign will is sometimes also referred to as an ‘overseas will’ or a ‘cross-border will’. Simply put, it refers to a will which covers assets across multiple jurisdictions.
How does a person’s domicile status affect their will?
The status of a testator’s assets abroad after their death depends on whether they are domiciled in England or outside of England. The word domicile has a different meaning to residence in England Wales compared with other jurisdictions. Factors which affect domicile include:
- Your country of birth
- Your father’s country of birth
- Where you have lived
- Where the assets are located
The domicile of a person is an important factor to consider when preparing a Will which has assets in multiple countries. The reason for this is that the person’s domicile decides:
1. Which country’s succession rules will apply
2. The country whose inheritances tax rules will apply to the estate
For example, two of the most common countries for English expats to have assets abroad, France and Spain, have different heirship rules to England. In France, the system of forced heirship means the deceased’s children are entitled to a minimum share of the estate. This is also the case in Spain, where your children are entitled to two-thirds of your estate. In contrast, English law uses testamentary freedom, meaning you can leave your assets in your Will to anyone you wish.
What is the risk of not having a will which covers your foreign assets?
If you own any type of asset abroad, such as a holiday home or a bank account, then your estate will be considered a cross border asset when you die. You therefore risk your assets being subject to the inheritance laws of the country your assets are in even if you live in the UK. For example, a property you own abroad might be inherited by someone you do not wish it to be.
You may also see a delay in administering the estate from having a single will in a worldwide estate. The reason for this is that the English will has to go through the probate process in England first, followed by the grant of probate being presented in the foreign country. Having separate wills in each foreign country you have assets in therefore allows the lawyers in each jurisdiction to proceed with the probate process following death.
Solicitor Xinlei’s thoughts
Our resident Family Law Solicitor, Xinlei Zhang, gives her thoughts on succession when it comes to foreign assets abroad.
When the client has assets, especially real properties, in another jurisdiction, like China, because the succession law is different, and we cannot give advice on the succession of foreign property, I would suggest the client consult appropriate advice from a local expert. This is because, generally, the essential validity of a will of immovables (property which can’t be moved) or of a gift of immovables, is governed by the law of the country where the immovables are situated. Therefore, it would be more effective to make a separate will as to the foreign property under the local law, at the same time, the will we drafted will be limited to the assets in England and Wales.
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