Owning assets in foreign countries could pose a hassle upon your death if they are not set up properly. The best way to handle a vacation home, business interests or other assets in another country is to add the property to your Will as soon as it is in your possession and to verify that your U.S. Will can be probated in the foreign county. In the alternative, you can have a Will drafted in the foreign country that handles distribution of the foreign assets.
Jurisdictional Issues
Because of the different jurisdictions—the United States and a foreign country—the Will must be drafted in a manner that it will be accepted in both countries. In some instances, the fact that the Will was accepted in the country you resided in meets this requirement; however, this is not always the case.
Taxes
You may be surprised to know that the United States does impose an estate tax on foreign assets, just as other countries do. The United States and several countries, including many European countries, South Africa, Greece and the United Kingdom, have tax treaties. The country where you have assets may tax your estate, as will the United States; however, the tax treaty may address these taxes and provide credit for estate taxes paid elsewhere. For example, if you own property in The Netherlands, that country’s estate tax laws apply. The United States may provide a credit to your estate to cover the estate tax required by The Netherlands.
One or Two Wills
Assets in foreign countries can be included in a single Will that covers distributions world-wide, provided the Will is properly executed such that it is recognized in each country. You should work with an attorney in each country where you have assets to verify the requirements for your Will to be valid.
In the alternative it may be more effective is to have two Wills, one for your domestic estate and one for your foreign estate. You should work with an attorney in each country where you have assets so that they are able to coordinate your estate plan. Both Wills must be drafted with care, referencing each other, so as not to nullify either Will.
If you are considering purchasing assets in a foreign country or if you already own assets in a foreign country, contact our Estate Planning attorneys at Grissom Law, LLC.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney client relationship between you and Grissom Law, LLC.