Worldwide or multiple wills?
Working and investing offshore creates a need for proper estate planning
More and more South Africans travel, work and invest in different parts of the world, resulting in them holding offshore bank accounts, investments, shares in private companies, furniture and motor vehicles, and sometimes even fixed property in other countries.
While the focus of families is often on the creation and preservation of wealth, asset protection and taxes, estate and succession planning may be left aside. Many people never consider what will happen to these assets at their death as a last testament and will drafted in SA may not necessarily be applicable, appropriate or enforceable in other jurisdictions.
Every country has its own laws regarding property, marriage, minor children, tax, wills and succession.
There are also vast differences as far as the administrative processes of deceased estates are concerned. Some jurisdictions have forced heirship rules, prescribing to whom assets must inherit, while others, such as the United Arab Emirates, have specific rules about minor children within their borders when both parents pass away.
Individuals and families with assets in more than one jurisdiction should familiarise themselves with the different rules applicable to their estates.
There are also rules of international law and other prescriptions, such as European Union regulations, which may have an impact on particular estates.
One consideration should be whether you should have one worldwide will or multiple wills covering different countries.
Important aspects include the nomination of different executors, the potential of conflicting clauses in different wills, the risk of inadvertently revoking a will while dealing with assets in another jurisdiction, or the difference in language, culture, legal terminology or legal principles, such as matrimonial property regimes, prenuptial agreements and rules of succession.
Ideally, a proper estate planning exercise should precede the drafting of a will, considering the location of assets, the potential tax consequences at death (including double tax agreements) and the viability and enforceability of the last wishes of the parties.
Factors that may have an impact are the place of marriage, the marital regime, the nationality of the parties and their domicile and/or habitual residence.
Another important consideration is whether the surviving spouse will return to SA after the demise of the first-dying or where both spouses die, with the resultant impact of leaving minor children in a foreign jurisdiction.
The age of majority may not be the same in all jurisdictions and the acceptability and implication of a testamentary trust as beneficiary must be understood.
While it is relatively easy to move around the world and accumulate assets in different jurisdictions, the complexity of the world we live in must not be underestimated. When international families are disrupted by the death of a family member, the impact may be far more intricate than anticipated.
One way to manage the impact it may have on the family is to ensure that proper estate and will planning is done. International families with SA ties should appoint a local fiduciary practitioner with the necessary know-how to assist them in this process.
Though not all fiduciary practitioners specialise in international estate and succession law, many members of the Fiduciary Institute of Southern Africa will be able to assist, some of whom have the professional designation of Fiduciary Practitioner of SA (FPSA®). If you do not have an able adviser, you may find one here.
• Nel is the chair of the Fiduciary Institute of Southern Africa and FPSA®
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