IN531 - The Importance of a Will - International Clients Need To Consider Their Position Across Jurisdictions
As families become increasingly international, with family members located in different countries, it is vital that appropriate wills are drafted and, subsequently, regularly reviewed and amended to reflect variations in circumstances. Often the jurisdictions where assets are located and/or where family members reside will be subject to change.
Writing A Will
There is no doubt that a will is an important document. Without a valid will, a person’s wealth and assets could be at great risk. Other documents can be revised, cancelled, amended and interpreted by the author, but on death a will is final.
The drafting of a will is usually associated with death and regarded as a morbid task. Wills are sometimes delayed until the last few weeks of a person’s life, or preparing for events such as major travel or a medical operation. This approach is not recommended. If the will is poorly drafted in haste, or signed incorrectly, the person might die intestate.
A well-drafted will, together with expert legal, estate and tax planning advice, facilitates the smooth and efficient liquidation of your estate and gives family members peace of mind, ensuring that your wishes are respected. A well-drafted will ensures that your estate will be distributed efficiently and quickly to your heirs upon your death, and means that a host of practical problems are dealt with in advance.
Failing to make a will can leave your family with a financial and personal burden and could severely prejudice your business or property interests.
Using a Professional Adviser
A will is a legal document and we recommend that a suitably qualified lawyer, attorney or solicitor (preferably one who is a specialist in wills, probate and estate planning) should draft your will. Tax and other savings may be significant and far outweigh any time-based professional fee.
A specialist professional will be able to reflect your wishes in a clear and unambiguous manner within a legal format. Completing a pre-printed form incorrectly, or not obtaining advice, may result in disastrous consequences and the will may be considered invalid or unenforceable.
A professional can provide expert advice on how to deal with your business and property interests, and succession planning. An appropriate specialist will advise on organising your affairs to minimise inheritance tax (estate duty/death taxes) and other taxes, such as capital gains tax, and offer advice, where appropriate, for creating a trust within your will or utilising an existing trust as part of your estate plan.
Requiring a Multi-Jurisdictional Will
If you are tax resident in one country, but hold foreign assets in another jurisdiction, you may be liable to death duties in that second jurisdiction. A professionally planned will (and establishing more than one will to cover assets in other jurisdictions) can avoid potential problems for your heirs, and add significant value to your estate.
Provision for an Executor and Legal Guardian
A will must provide for the appointment of an executor (the responsible person to carry out the wishes expressed in the will) and a guardian (for any minor children). If you do not make a will, there will not only be a delay in the appointment of these individuals, but these positions may even be filled by a person nominated by a court, incurring potentially expensive legal costs in the process. The UK authorities may not recognise the executors or guardians nominated in a foreign will; therefore a separate English will would always be strongly recommended.
It takes time to administer an estate and it can be very complex. You can often be placed in a conflicting situation with heirs (who may or may not be your family).
Acting as an executor is a responsible role. An executor can be personally liable for his/her actions and often controls assets of significant value. Does your nominated executor have the time and expertise to deal with the potential number of matters and individuals involved and accept the potential risks in winding up an estate or acting as a trustee?
You must ensure that the person named as executor (and trustee if applicable) can be trusted implicitly as he/she will be granted access to all of your worldwide assets. It is possible to appoint a professional person or professional service company, such as Dixcart, to administer the estate and act as executor and trustee. An ideal partnership could be a spouse/civil partner and a professional adviser as co-executor.
If you require further information regarding wills or multi-jurisdictional wills, or have any questions regarding estate planning, inheritance tax planning or probate in the countries where you own assets, please speak to Paul Flude at the Dixcart office in the UK: firstname.lastname@example.org, or your usual Dixcart contact.