We live in a world where people live, work and invest outside their mother country. Therefore, owning assets in multiple countries isn’t as strange as it used to be. However, while international assets like property, bank accounts and investments can broaden your portfolio, they make estate planning a difficult process.
Different countries have varying inheritance laws, tax structures and probate processes which can make transferring these assets a challenge.
This article will serve as a guide to help you navigate estate planning when you hold assets in more than one country. Continue reading to learn more.
Understand the Local Laws and Tax Regulations
Each country has its own legal and tax framework for handling inheritance and estate taxes. Some countries have forced heirship rules which means that assets must be distributed to specific family members regardless of your wishes as the deceased. Estate taxes are another consideration.
The United States, for instance, impose an estate tax on global assets for its citizens, while other countries may only tax assets located within their borders. Double taxation also occurs when two countries impose tax on the same asset. You must do your research on each country’s laws or work with an estate planning lawyer to help reduce these taxes and ensure you comply with compulsory laws.
Consider Creating a Separate Will for Each Jurisdiction
If you own major assets in different countries, creating separate wills for each jurisdiction can simplify the estate planning process. Each Will can specifically address assets in the country where it is drafted, allowing for a smooth legal process. It also helps in reducing delays during probate, especially if your country’s legal system is faster or less complex than others.
However, creating multiple wills requires careful planning and consideration to avoid flouting rules and instructions. Working with an estate planning lawyer who specializes in cross-border estates ensures that your will aligns with the laws and avoids contradicting other documents.
Review and Update Beneficiary Designations
For international assets like bank accounts, retirement funds and life insurance policies, review your beneficiary designation to ensure they’re in line with your estate plan. Some countries allow you to name beneficiaries directly on the account, bypassing probate. This can make the inheritance process faster and may reduce taxes on those assets. Also, note that beneficiary designations generally override wills, so you must keep them up to date as soon as any changes occur.
Work With Cross-Border Estate Planning Experts
Finally, when navigating estate planning with international assets, having an expert team is compulsory. Working professionals who specialize in cross-border estate planning such as attorneys, tax advisors, and financial planners can help you create a detailed plan that meets each country’s legal requirements. They can also provide insights into ways to reduce tax burdens and ensure you can transfer assets to your beneficiaries smoothly.
Conclusion
Estate planning with international assets can be complex and challenging, but with the right strategies and proper guidance, you can ensure your estate all over the globe is protected and distributed according to your wishes. Working with cross-border professionals and creating detailed wills, you can navigate the challenges of international estate planning with confidence and peace of mind.