Make your overseas inheritance easier for your beneficiaries
The passing of a loved one can be a stressful time emotionally and often those left behind find it difficult to cope with their loss. Dealing with the formalities and legalities on an inheritance can be stressful at the best of times but is even more stressful when you have to deal with foreign legal systems and processes that you don’t understand either from technical, cultural or a language point of view. With so many British people owning property abroad it is increasingly likely that an inheritance will have some international element to it.
Follow these 5 Top Tips from AIPP legal members, Judicare, for making an inheritance abroad as stress free as possible;
1. Plan from the beginning.
When you are buying a property abroad you should consider the possibility of an inheritance right at the start of the process. By thinking about this you can often make an inheritance easier and cheaper. One way of doing this is to consider who should own the property in the first place. Getting the form of ownership right when you buy can have a major impact on a subsequent inheritance and can also help reduce inheritance taxes significantly. Whose name you should register the property in isn’t necessarily obvious or even the same as you would do back home so you should take legal and tax advice on this before you sign the title deeds and, preferably, before you sign the purchase contract.
2. Make a foreign Will
Most people assume that they can only have one Will but that is incorrect. You can have several Wills, providing that they work together and do not revoke each other. It is therefore sensible to have a Will for each country that you own property. By doing this you can take advantage of the inheritance and tax systems in both countries. This will make any inheritance quicker and smoother, therefore reducing the stress on your loved ones and making things easier for them. It can also potentially save a lot of inheritance tax and in some cases reduce down legal fees. It is, however, imperative that the people who draft your Wills up for you know what they are doing and do so in a way that makes the Wills work together rather than revoking or working against each other as this would cause more problems than it solves.
Making a Will in the other country will mean that it is drafted in the local language and the local layout. It will therefore be more easily understood by the authorities in that country. You won’t need to pay for the translation and legalisation costs with a foreign Will but would do if you leave the foreign assets with a UK Will.
3. Get organised
Should you pass away your beneficiaries will need to information in order to proceed with the inheritance. They will need to know what you own. They will need to know how to access those assets. They will need to know what you want to happen upon your passing. You can make things easier for them by making sure that they know where to find all those things that they will need – your Will, the property deeds, details of bank accounts etc. Keep a list of your main assets so that things don’t get missed off. Get your paperwork in order. Have a list of key contacts – your Lawyer, your Bank Account Manager, your Accountant and so on. Make things as easy as possible to identify the assets and who they should go to. You will obviously need to keep such sensitive information in a safe place and make sure that after you pass away your beneficiaries can easily find it and access it. All of this will make an inheritance much simpler and quicker.
4. Use a specialist lawyer
Your UK High Street lawyer is unlikely to know the first thing about inheriting assets abroad. Whilst they can deal with the UK inheritance they won’t know where to start with the inheritance of the assets abroad and will often assume that it works in the same way as it does in the UK, which it rarely does. This can lead to wasted time trying to find out how things work, which in turn costs more money. It can also lead to the matter dragging on for longer than it should do. The legal systems in other countries can be significantly different from the UK and therefore you need a lawyer who can help you through that process. It also makes sense to have a lawyer who understands UK law as that way they can explain things to you in terms that you understand and draw comparisons with the UK system to explain things to you.
5. Deal with things quickly.
Making a foreign Will can help your beneficiaries and their lawyer to deal with a subsequent inheritance more quickly. That will have the effect that the legal fees should be lower but may also have a further knock on consequence that many people do not realise. In some countries you have to pay any inheritance tax within a certain period of time or else you end up paying interest and fines for late payment. Dealing with an inheritance quickly can therefore save money as well as stress.
Using these tips you can make things as painless as possible for your loved ones after you have gone and, potentially, also save them a considerable amount in fees and taxes.