Estate Planning for Foreign Property with Situs Wills and Domicile Hague Wills

When faced with clients needing advice for property they own in a foreign country, some firms might simply advise a client to contact a foreign attorney in that country. However, to ensure that a client’s estate plan is valid in each country the client owns property, a thorough estate planner should have some basic knowledge of the ramifications of foreign ownership and inheritance laws in both the United States and abroad. The importance of having this understanding to provide competent advice to a client is becoming increasingly apparent, particularly as the population becomes more mobile.

Multiple Wills

Many believe the easy answer that simply having a will drafted in each jurisdiction will alleviate any problems. Although it is true that having a will in the country where property is owned is preferred, in circumstances where property is owned in multiple countries the wills must be carefully drafted; otherwise, one last will and testament may ultimately revoke the other. If two wills are needed, it is critical that the two attorneys—one from each jurisdiction—work together and simultaneously. Everything should be carefully coordinated, and complementary language must be included.

It is possible to avoid revocation by drafting in the foreign jurisdiction a supplemental will covering only the property owned in that jurisdiction. Simply put, this is a foreign codicil to a domestic will. One must be careful with this method as well, however, to avoid revocation of any portion of the original domiciliary will. For instance, the supplemental will may only include the immovable property located in the foreign country, such as real property. The domiciliary will should also include a section referencing the supplemental will, and vice versa, so as to avoid any confusion.

Another problem arises when the foreign property is not addressed in either will. If an individual purchases property after the execution of a will and if he or she fails to update one or both wills, intestacy rules will then apply for that property, and any desires the client may have had regarding disposition will not be realized. Although intestacy laws among the states are fairly consistent, foreign intestacy laws often yield surprisingly different results.

Whether using two wills or a supplemental will, the cost of the estate plan may rise as the additional work and coordination requires a high level of precision. However, the potential present additional cost should be viewed as an investment. This investment will prevent unexpected additional costs and headaches during probate.

Foreign Recognition of U.S. Wills

Occasionally, some foreign jurisdictions will recognize wills drafted in the United States. Generally speaking, for a U.S. will to be valid in a foreign country, it must be formally valid under the laws of that jurisdiction. Some foreign jurisdictions, however, will not recognize a will drafted in the United States under any circumstance or will recognize the U.S. will only under certain unique circumstances. In the United States, an individual is free to dispose of his or her estate as desired. However, France makes almost no provision in its succession laws for a surviving spouse. So, if an individual had no will in France and the property there was purchased individually, then the surviving spouse would have no claim to that foreign property.

International Wills

One of the best ways to prepare for death while owning property in a foreign country is to execute an international will. In 1973 in Washington, D.C., the International Institute for the Unification of Private Law (UNIDROIT) held the Convention Providing a Uniform Law on the Form of an International Will. The Washington Convention was held in hopes of creating an international will that would make estate planning with international ramifications more straightforward and uncomplicated. The Convention did not and has not attempted to revoke or override the laws of signatory nations. It merely seeks to create a system of estate planning for those individuals who hold property and assets in a nation or nations other than their domiciliary country. Additionally, The Hague Convention on the Conflict of Laws Concerning the Form of Testamentary Dispositions provides cross-border will validity among signatory nations. Under both the Washington Convention and The Hague Convention there are certain requirements that must be met to ensure a testamentary instrument qualifies for cross-border validity.

The greatest benefit to an international will is the knowledge that, when drafted to meet the requirements set forth, the will is valid in any jurisdiction that has signed or enacted the Washington Convention, also known as the Uniform International Wills Act. Some of the major countries that have enacted the Uniform International Wills Act (UIWA) include: Belgium, Canada, France, Italy, Portugal, and Slovenia. Others countries are signatories to the treaty though they have not necessarily enacted the UIWA in whole include: Iran, the Russian Federation, the United Kingdom, and the United States.

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