This post was originally made November 21, 2016.
There is a lot of complexity and international implications swimming around in the world of estate plans dealing with property in foreign countries. Here are some considerations to look at if you are drafting these kinds of documents:
- Always consult with local counsel in the country where the property is currently situated and/or where your client resides.
- The country you are working with may not recognize foreign wills/other estate planning documents. You may have to draft and execute a will in the foreign country as well as one from the United States. I would recommend working closely with local counsel in the foreign country and making sure the estate planning documents in both countries do not have conflicting language. Pay special attention to standard language that would revoke other wills and codicils to ensure the current estate planning documents remain in effect.
- There is something called the Uniform International Wills Act. Not all countries have signed on to this.
- The Uniform International Wills Act was created in 1973 with the hopes of creating an international will that can make estate planning with international ramifications more straight forward.
- The Act states that drafters can include an International Wills Certificate which designates that the will shall be valid in any jurisdiction that has signed on to the Uniform International Wills Act. The Act provides draft language for this Certificate.
- Each state within the United States has also been requested to be a signer on the Uniform International Wills Act, however to-date only 15 jurisdictions have done so. It may be advisable to prepare your estate planning documents with a Certificate in any jurisdiction if you are dealing with international wills to help ensure enforceability.
- There are also international tax issues that may arise. If tax issues are beyond the scope of your expertise, I advise engaging with a tax professional on those points. There may double taxation issues if your client’s property is transferred to the United States in any form, there may be yearly caps on amounts of transfers, and the property may be subject to United States estate tax. The United States has estate tax treaties with some countries (which would allow the country of origin’s estate tax to apply).
- If your client passes away with property still located in a foreign country, their beneficiaries will likely have to engage with a local attorney in that country in order to administer the property through a probate system.
- Make sure to tell your clients that if they purchase additional property in the foreign country, the United States, or elsewhere, their estate plan should be updated. The additional property may not be accounted for within their current estate planning documents.
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Every legal issue is very unique. Accordingly, the information in this blog is intended as general education material and not as legal advice. If you think you may have a legal issue, you should consult an attorney.