That’s a pretty complex question, so no surprise therefore that it comes with a complicated answer. In the words of the legendary Bamber Gascoigne, your starter for ten is that if you have assets abroad it’s absolutely vital that you seek legal advice about your estate in the UK and any assets abroad.
In England and Wales we have testamentary freedom meaning a person is allowed to dispose of their assets freely, ie to anyone they want (subject to certain caveats which I won’t go into here, although they are pretty significant – see my article Risky Business for more on that).
Much of Europe on the other hand has variations of fixed inheritance (or forced heirship), often meaning children have precedence over surviving spouses. Without planning that could result in an unexpected tax liability, not to mention a surprise when little Johnny breaks the news to his Mum that she’s got a week to move her sun creams out of the holiday villa!
And whilst I try to keep any legal jargon to a minimum when writing an article, given the complexity of this particular area of law it’s important to touch gently on one important regulation and consider its impact post Brexit.
International succession focuses on how a person’s property is dealt with on their death, who is entitled to inherit, and the mechanism for paying tax and other creditors. When it comes to the provisions in a Will, the local succession laws can sometimes conflict and hey presto, “Houston we have a problem.” To make things easier for EU member states, Regulation No 650/2012 seeks to enable EU citizens to organize their succession and remove any obstacles relating to cross border estates.
Oh but hang on, following the Brexit vote we’re not invited to that party anymore. Don’t worry though folks, the decision to leave the EU doesn’t affect the application of the above regulation in relation to Wills of UK citizens. The UK isn’t bound by the Succession regulation, but it is a third state (ie non-EU member state) for the purpose of succession Regulation, meaning the rules on ‘Renvoi’ come into play. Older readers at this point might remember the line in one of my old TV favourites, ‘Soap’, “Confused? You will be!” The rules on Renvoi are somewhat complicated, but in essence usually need to be considered when a conflict of law arises between two or more jurisdictions.
By the way if anyone ever tells you Wills are simple and they did theirs using one of WH Smith’s ‘Will Writing Made Simple’ programmes, you probably met them at the hairdresser, and it’s very likely they are cutting your hair.
Ok back to basics:
Of course, you need to make a Will here in the UK, and whilst the common perception is that you need to make a Will in the country where you own other assets, that may not always be the case. Before you get out of the blocks you need to be very careful that any Will you make abroad doesn’t revoke your English Will.
Next you ought to consider the following points:
Where are you domiciled? For retired individuals, or those whose work requires them to spend a significant time abroad this could be more complex than meets the eye.
If a choice of succession law is to be made, does it need to relate to your worldwide estate?
For double taxation relief or unilateral relief, where is it preferable to pay tax first?
Will each jurisdiction accept the Will as valid under their private international law rules?
Which estate planning techniques are suitable taking into account tax regimes in all relevant jurisdictions?
If you can answer any of those questions correctly then you’re likely to be a Wills, Trust and Probate Lawyer. If you can’t, then you need to speak to one!
Where it is appropriate to have a single Will covering worldwide assets, it’s still advisable to take advice in all relevant jurisdictions. In the case of a foreign estate or legacy, it might also be worth considering the appointment of separate executors to deal with the administration in those countries.
The bottom line is, whether you need a UK and a foreign Will is dependent on some, or all, of the above, and in any case this article really only scratches the surface of what needs to be considered before you come to a conclusion.
If you’ve got assets in the UK and abroad, give me a call and let me guide you through the process.
This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitor before decisions are made and before you embark on a certain course of action.
Penn Chambers Solicitors
0207 183 1485