Now and again, I get a client who owns property in a foreign country. Unsurprisingly, they want to know how to incorporate this property into their estate plan successfully. Since every country has a different set of laws, and some countries may not recognize a U.S. will or trust, this is a tricky situation to deal with. If you’re lucky, you may be able to find an attorney familiar with the laws of both countries, but this magical lawyer is often hard to find. Absent that, here are a couple of approaches to dealing with foreign assets:
The first approach is to have one estate plan for your U.S. assets and another estate plan for your foreign assets. Each estate plan should be drafted by an attorney familiar with the laws of that country. This approach guarantees that your wishes will be honored in each country where you own property, and you don’t have to worry about foreign laws or taxes causing problems for your beneficiaries. The downside is that it’s more complicated than just having one plan. For example, you need to be careful that one plan doesn’t override the other, and you want to make sure your attorneys consider international tax issues, not just the tax issues for their country.
The second approach is to use an international will. An international will has more requirements than a regular will, but following these requirements will ensure that your will is honored in foreign countries. This is a bit easier than having two estate plans, but it’s important to remember that this will only work if the foreign country signed the treaty that set out the requirements for international wills. If the country your property is located in did not sign this treaty, and your will does not meet that country’s requirements for a valid will, then they may choose not to honor it. At this time, only 13 countries have signed this treaty, so an international will is only of limited use.
There are other options out there, but these two are the most common and, in my opinion, the easiest to implement. If you have questions about dealing with foreign assets, international wills, or having multiple estate plans, please feel free to reach out at email@example.com.