Foreign assets - what happens after death?
If you own foreign property, you need a careful and co-ordinated approach to your estate planning as there may be specific rules in the country concerned that affect how the property will be dealt with following your death.
Many countries (e.g. France, Germany and Spain) have what is known as ‘forced heirship rules’, which are restrictions on how property you own in that country can be left to your heirs. For example:
- In Germany, the testator’s descendants, parents and spouse or civil partner are entitled to compulsory shares.
- In Spain, the testator’s children are entitled to inherit two-thirds of the estate, although rules vary between regions.
Forced heirship rules vary from country to country, but they tend to specify that a certain percentage of your assets must be passed in equal shares to particular members of your family. As these rules are part of public policy of the country in question, any will you have written that goes against the forced heirship rules will be invalid.
England and Wales does not have a forced heirship regime, so you are free to decide who inherits your assets based there (subject to claims from dependants – for more information, please see Can you disinherit family and dependants?). But if you own foreign assets, it may be that, depending on your circumstances, you need:
- a multi-jurisdictional will in order to deal with assets located in more than one country; or
- different wills dealing with the property in each jurisdiction to avoid local problems.
If the property is located in an EU country (other than Ireland or Denmark), you may be able to elect in your will for the laws of England and Wales to apply to the succession of the property instead. It isn't yet clear whether this will still be the case after Brexit.
In any of these situations, it is recommended that you obtain specialist advice so that a co-ordinated strategy can be put in place for you.