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How Do Foreign Assets Affect Probate?
With more and more of us working abroad, opening foreign bank accounts and investing in holiday homes, the need to deal with foreign assets after someone dies is increasing. The Probate and Estate administration process when foreign assets are involved can vary depending on the asset holders and the laws of the countries with which the deceased was connected.
If someone owned foreign assets at the time of their death, as well as assets in England and Wales, this is referred to as a cross-border Estate and it is likely to make dealing with their Estate more complex. As a result, when foreign assets are involved it will take longer to complete the Probate process.
When administering a cross-border Estate, questions can arise around which country's law should apply to each aspect of the Estate. These include the inheritance of assets, the validity of the Will (if there is one), the way we treat the UK and foreign Estate for tax purposes, and how you dispose of those assets.
Establishing Which Country's Law Applies
The deceased's domicile (i.e. the country of their permanent home, where they intended to remain) must be confirmed. This can affect the tax position of the Estate as well as which law will apply, and this may determine who inherits the Estate. It may also be necessary to confirm other factors, such as the deceased's nationality or residence, and it's important to note that these are not always the same as their domicile. For more information, see What Does Domicile Mean and Why Does it Matter in Probate?
If the deceased left a valid Will, it is sensible to review this to establish if it deals with the assets held overseas along with the deceased's assets in England and Wales.
In England and Wales, the approach to establishing which country's laws should apply, is that immoveable assets, such as land and property, are dealt with according to the law of the place where the land is physically located. Moveable assets, such as bank accounts, are dealt with by the law of the place where the deceased was domiciled when they died.
Other countries have different approaches to this, for example in most of the rest of Europe there is a set system based around residence and nationality. This can lead to difficult clashes between the legal systems, and this is sometimes called 'conflict of laws'. When dealing with foreign assets there is no universal or common approach to dealing with them as it's largely up to the individual institution and local practices.
For free practical advice following a bereavement, call 03306069584. We can help you with the practical steps, and if you need Probate, provide a no obligation fixed-fee quotation.
Probate Process for Foreign Assets
The first thing that needs to be done is to obtain a date of death valuation of the asset. Once a valuation has been obtained, the asset holder (such as the bank, for example) will usually confirm the requirements in order to dispose of the asset.
Obtaining a date of death valuation can be complicated, but if you instruct a Probate Specialist such as Co-op Legal Services to help you then we would do this on your behalf using one of our specialist providers.
Once it has been established that a Grant of Probate is required, it is vital that you seek legal advice both in this country and the country in which the asset is held. This is to ensure that all relevant laws are complied with and any tax liability in either country can be considered.
In some cases, it may also be necessary to obtain a Grant of Probate (or equivalent) in the country where the asset is located. In this instance it's a good idea to instruct a qualified Agent in that country to obtain this document. Again, with our Probate Complete Service we could liaise with a local agent on your behalf. The Grant of Probate will then facilitate the release of the funds or the sale or transfer of the deceased's foreign assets, or if the country in question does not have an equivalent to a Grant of Probate, the agent will advise on the next steps.
Alternatively, when an English Grant of Probate has already been obtained then some foreign asset holders, particularly in former British colonies, will accept this, providing it is resealed in their country. This process is quicker, more efficient and often less costly to the Estate than obtaining a new Grant. Ultimately, it is for the asset holder to confirm if this is something they will accept.
Specialist Probate Advice for Foreign Assets
Foreign assets can cause complications and complex issues for the Executors or Administrators of an Estate. For this reason, it is important to seek advice at the early stages of the Estate administration process. This article is not intended to represent legal advice nor an academic analysis of the law on this complex subject. It is merely to flag some of the key issues that one has to face when dealing with a cross-border Estate.
Our Probate Specialists are very experienced in dealing with cross-border Estates and can provide advice and guidance throughout the process. We also have trusted contacts in many different countries, should advice on foreign law be needed.
To speak with a Co-op Probate Advisor call 03306069584 or contact us online and we will call you.