Estate Planning with Foreign PropertyEstate Planning with Foreign Property
August 31, 2017 • Uncategorized
Estate planning can be confusing, even for those who consider themselves financially savvy. Most people have unique considerations when it comes to planning for the future of their families, but those who own property outside of the United States face special challenges. Foreign property depends on several factors, including where the property is located, the nationality of the heirs involved, citizenship status of both the owners and their beneficiaries, the value of the property, and taxing issues.
At the same time, estate planning for foreign property is becoming more commonplace, especially with an influx of green card holders and highly skilled workers entering the United States. In many of these cases, these workers and their non-citizen spouses own property in other countries. In other instances, a U.S. citizen may own property abroad and require assistance transferring it to their heirs.
Estate owners naturally want peace of mind and preparation for all contingencies, including real and personal property in other countries. Unfortunately, there is no “one size fits all answer.” However, if you meet with a skilled estate attorney, they can help you make a solid plan and enlist the help of other professionals that will help to see that your goals are realized. The following are general considerations that apply to estate planning with foreign property:
If you own international property, you might want to consider an international will. This is especially important because most countries will not honor a will’s provisions if it was drafted solely in the U.S. without an international will, you also run the risk of having your property divided in accordance with that country’s intestacy laws.
Filing an international will requires a complex set of procedures, and they must be recognized in all countries involved. It also depends on countries adopting the Uniform International Wills Act. Countries who accept this act require that:
- The will must be in writing
- It must be the sole wish of only one person
- It must be witnessed by two people
- It must be authorized by an attorney, and each page signed by the person drafting it
- There must be an accompanying certificate from the attorney asserting it was drafted in accordance with the terms of the Act.
Double Taxation Issues
Another major concern of anyone owning property in another country is that they may be taxed by both the US and the other country upon transfer. For tax purposes, the U.S. has a treaty with the following countries:
- The UK
- South Africa
These countries tax the estates when the property is not where the estate holder lived, and the U.S. provides a credit to decedent (or their heirs) for taxes paid.
As you can see, estate planning with foreign property can quickly become complicated. With the right approach, however, you can find peace of mind that your property will be efficiently transferred when the time comes. With the help of a highly skilled estate planning attorney, you can find confidence in your estate plan involving foreign property.