The Importance Of Preparing A Will With Assets Abroad

You may have prepared a Will in England however if you own foreign assets, whether a holiday home or bank account, the Will you have prepared here may not cover the assets you hold in that country.

Including foreign assets in a Will – laws in the UK and other countries

English law allows for testamentary freedom which essentially means you can leave your assets in your Will to anyone you wish.

Certain countries such as France and Spain have forced heirship rules which means that your estate has to pass in accordance with those rules. In Spain, for example, the forced heirship rules dictate that your children are entitled to two-thirds of the estate, a third of which must be distributed equally to all children and with only the remaining third being allowed to pass in accordance with your wishes. This could prove problematic if you owned assets there and your intention was to pass them to a partner or other beneficiary.

Also, forced heirship could impact certain inheritance tax benefits, such as spouse or charity exemption, which may not apply.

The EU Succession Directive

Despite Brexit, you can still benefit from The EU Succession Directive, also known as Brussels IV when preparing your Will. This Directive allows for you to elect the law of your nationality when preparing your Will to govern your succession worldwide.

This would allow you to prepare a Will stating that you wish for all your worldwide assets to be dealt with as per English law avoiding the forced heirship rules.

Wills prepared in England and other countries

You may have prepared Wills in both England and another country to specifically deal with the assets held in that country. Great care needs to be taken when preparing Wills in different countries, have they both been drafted correctly so one doesn’t cancel the other? Have you elected to follow English law in a foreign Will to ensure this applies to your estate?

Not only could you fall foul of forced heirship rules, but a carefully prepared Will could also ensure it is as tax efficient as possible for your estate. Spain again, for example, has greater tax consequences for an estate if the executors you appoint are not Spanish nationals.

Obtain legal advice

It is always recommended to get legal advice when preparing a Will that includes foreign assets to ensure that it is appropriately drafted to consider all worldwide assets, or alternatively, separate Wills in the different jurisdictions may be more favourable to complete. As mentioned above, these Wills would need to be expertly drafted to ensure that one doesn’t revoke the other to ensure there is no risk of partial intestacy.

If a Will is drafted abroad with a view to taking into account assets held in England and Wales, special consideration needs to be given when it is executed to ensure it can still be proved at the Court.

A person’s domicile is also an important part when considering preparing a Will with assets in multiple jurisdictions. A person’s domicile decides two important and distinct issues: