Where there’s an asset… there should be a Will

Many years ago, I chuckled as I heard the one-liner… where there’s a Will, there’s a relative!

In the last few years, I have helped some clients with their Wills, estate planning and managing estates after their passing. It’s a hard time for the family, and it’s always more challenging when there isn’t an adequately structured Last Will and Testament in place.

At Northern Cross Wealth Management, we’ve noticed how this has become even more complex, with an increasing number of families diversifying their investments through accessing foreign markets and holding assets in different countries.

The demand for multi-jurisdictional estate planning has grown. In a nutshell, wherever you have an asset (or assets), you should have a Will.

The globalisation of families, with children studying or residing abroad, and the trend of purchasing properties in countries such as the UK, Australia, Europe and Mauritius, contribute to this trend. Estate planning in these scenarios can be complicated and requires a comprehensive approach to avoid unintended consequences and confusion.

The need for careful and thorough estate planning is becoming more prevalent as our clients navigate the intricacies of offshore investing and a dispersed family structure.

When planning your estate, you must consider the jurisdiction and type of foreign assets you own. This can impact the structure of your estate plan and is determined by the legal system in place, either civil law or common law.

In countries like France, Germany, and Mauritius, civil law systems follow codified laws and often have “forced heirship” rules that limit who you can leave your assets to.

These laws vary by country, so it’s essential to seek advice from a specialist with in-depth knowledge of the jurisdiction’s laws, like our team at Northern Cross. In Mauritius, for example, a portion of the estate is reserved for the deceased’s children, regardless of citizenship.

French forced heirship laws protect children’s inheritance rights but limit those of spouses. These laws apply to the worldwide assets of French residents, but only affect immovable property for non-residents.

Whether you need an offshore Will, also known as a concurrent Will, depends on the type of asset, jurisdiction, and its value. If you own immovable property abroad, it is recommended to have a foreign Will to deal with it in case of death.

However, it is advisable to consult a fiduciary expert to weigh the pros and cons of having a foreign Will. Having one can ensure efficient administration of foreign assets, speed up probate, and ensure that the Will is drafted in the language and legal framework of the region where the asset is held.

Note that some foreign jurisdictions do not recognise trusts as entities, causing complications in transferring foreign property to a local trust.

The most significant danger of creating a foreign Will is that it may unintentionally render your local or other offshore Wills void. It’s best to have a foreign Will drafted by a specialist and make sure your financial adviser has complete knowledge of your entire estate.

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