Although most people are aware of what a last will and testament is, the number of issues that arise concerning foreign property ownership and what happens to it after you die is substantial to say the least.
It's not unusual even for those who do have a will to assume that everything will be covered by their existing will after buying a holiday home or a foreign investment property. As many have discovered, some at very considerable cost (in some cases beyond the value of the initial investment itself) this is not necessarily case.
Given that the law is different in every country or jurisdiction, and a lot will depend upon your country of domicile also, a specific in depth guide is not really very practical. However, there are some key points that should be kept in mind and checked, whenever you make an investment outside your current domicile. (Please not that this article should not be taken as direct advice, we are neither lawyers nor notaries, seek specialist advice pertaining to your specific requirements.)
One will does not cover all!
As much as it sounds like it should, nothing could be further from the truth. Because taxation laws differ from country to country, and even the laws dictating who can inherit what, the practicality of such a will is not feasible. If you are domiciled in the UK, then your UK will covers your affairs within that jurisdiction. It does not cover your holiday home in Barbados, or your antique watch collection in a safety deposit box in Switzerland.
A will in each country
The general consensus of opinion suggests that a will in each jurisdiction in which you own assets is the best practice. The primary will should be made, held and administered from your home domicile, your home domicile being usually from where your passport is issued (There can be exceptions to this, check with a lawyer.) and where you are technically taxed.
How it works
The will in your country of domicile is taken as the "master will" (for want of better terminology!) this being the case, one needs to be aware when amending or making any foreign wills that you don't "overwrite" your master will by revoking previous wills in other jurisdictions and vice versa. In essence, when you renew any will, ensure that you are specifically only amending the will as it pertains to that country; otherwise you can end up in even more of a mess than having no will at all. Another term used by the legal profession when amending wills is a "codicil" which is an addendum stating specific changes.
Most people tend to rewrite wills after getting married, if you don't, your will could be completely null and void unless your current will is written using the clause "in expectation of your marriage".
World wide wills.
Whilst the terminology is there, and will assist in the bequeathing of your assets, a world wide will does not specifically cover the distribution of assets outside the jurisdiction in which it was written. This is the primary reason for having separate wills for each country, to deal with local legalities regarding gifting and taxes.
Property with a mortgage
Unless stated otherwise, if you leave a property to someone in your will which still has a mortgage or loan secured against it, the debt will transfer with the property. If your estate has the ability to cover the debt, it is possible to bequeath the property "free of mortgage", in which case the debt would be taken care of by the estate.
Executors and Administrators
Although both do pretty much the same job, there is a difference. An Executor is someone you specify in your will to take care of your estate. In most cases an Executor is not permitted to benefit from the will itself. An administrator is appointed when there is no named Executor, or the Executor named is unable or not prepared to undertake the task.
The term "Property"
In the case of wills, the term "property" refers to all of your assets, not just houses and so on. Whenever writing a will it is best to be as specific as possible.
In general, wills can be very complex in their own right even if you don’t have foreign investments. As a rule of thumb, remember that your place of domicile will be the primary point of administration regarding your requests initially, and any other wills you have to cover other assets will be taken from there. What is law and legal in your domicile, will not necessarily be the same in another. Have your foreign wills compiled with the assistance of a lawyer and a notary from the country where they are being written, and ensure that they are aware of which nationality you are, and the domicile in which your affairs originate from.
- Tuesday 29 June 2010