‘As a probate professional, how often do you deal with estates that have overseas assets?’, asks Louise Levene, International Asset Services Manager.
In recent years, there has been a considerable increase in the necessity to deal with foreign assets after someone has passed away due to the fact that more individuals than ever are working and living abroad, opening bank accounts in foreign countries, and purchasing property in Europe, including Spain.
In a recent poll on LinkedIn, 21 per cent of respondents replied that they dealt with foreign assets every week, 14 per cent on a monthly basis, 50 per cent a few times a year and 14 per cent ‘never’, indicating that the bulk of probate professionals are regularly wading through the labyrinth of bureaucracy that surrounds the disposal of second homes abroad, foreign bank accounts and shares.
Probate and Administration
Foreign-owned assets mean that the probate and administration process take a lot longer overall since different countries handle probate in different ways depending on where the asset is located.
Verifying the deceased’s permanent residence is the first stage because it will probably have an impact on the estate’s tax situation and applicable legislation. It could also be necessary to verify the person’s nationality and place of residence.
Foreign Resources
If the deceased left a will, it may outline their preferences regarding the distribution of their foreign holdings. The laws of England and Wales govern immovable assets, including land, and must be interpreted in accordance with local laws.
The legislation of the place where the deceased individual lived at the time of death is applicable to bank accounts and other movable assets. However, what counts as nationality and place of residence varies in countries, which occasionally results in contradictory legislation.
Probate procedure:
How does the probate procedure work for foreign assets?
The assets must be valued by the executors and administrators on the day of death.
After that, they give the asset holder (a bank, for example) the valuation, and that organisation specifies what is required for the asset to be disposed of.
The administrators or executors will require legal advice applicable to the nation in which the asset is held if a grant of probate (or whatever its equivalent is in that country) is required. This is to ensure compliance with all applicable laws and that any potential tax liabilities in the nation are taken into account.
Read more about the stages of probate here.
Legal Counsel
Administrators or executors must obtain legal counsel in both this country and the nation in which the asset is kept when the Grant of Probate (or its equivalent) is required. This is to make sure that all applicable laws are followed and that any tax liabilities in either country is taken into account.
In our globalised world it has become relatively easy to acquire assets from different countries. You might open a bank account in one country to facilitate a property purchase or you might own shares in a company that has since been taken over by a multinational, and so on.
However, executors quickly face a plethora of administrative and occasionally legal obstacles in their attempts to liquidate those accounts and sell those shares once the owner passes away. Executors must become specialists at negotiating each of the restrictions that apply to each account and institution. When you are accustomed to dealing with UK services, these tasks can take up a lot of time.
At Finders International we offer an international assets service. If you would like to find out more, you can phone us on freephone 0800 085 8796 (UK only) or +44(0)20 7490 4935 for an informal, no-obligation conversation.