Estate planning can be a complicated and tricky thing to do, but this is especially true when you have diversified assets. It can become even more complex for the estate plan that has to take foreign financial assets, including real estate, into consideration. Whether you are thinking of purchasing any foreign assets or you have already done so, you need to know how these affect your estate plan. Making sure you have an attorney who specializes in estate planning is key. An experienced estate planning attorney can help you better understand the steps needed when dealing with foreign assets and how to put them into motion.
Wills and Their Validity
In most cases, a United States Last Will and Testament is a valid way for you to make sure your assets reach the people and places you intended them to go. However, if your will includes any foreign assets, there are separate rules that need to be followed other than just writing up a simple will.
If your will should include any foreign assets and the proper steps were not taken, it could make your entire United States Last Will and Testament an invalid document. Needless to say, this will be a huge hassle for your heirs! To avoid this situation, you must ensure that the document complies with the requirements of a valid will in the foreign jurisdiction where your assets are located. It’s important to consult an estate attorney in the country where these assets are located or at least one who is proven to be very familiar with the laws of that country. If you do not take the time to do this, you can take the risk of losing those assets or having them distributed in a way that does now follow your wishes.
It’s also important to take into consideration how multiple wills can affect your estate. Most likely an estate plan that takes the laws of multiple countries into account will require more than one document to set up a will.
Your taxes are one of the more complicated issues that come along with foreign assets and estate planning. The United States maintains estate tax treaties with several other countries around the world. What this means is that when an individual passes away with any property in those countries, then that property will be included in the person’s estate and can sometimes be subject to the estate tax. If this should be the case for you, it may lead to a double taxation on these assets and would have a larger impact on the amount of assets that remain after all tax considerations.
Along with this, you need to remember that many foreign countries impose a higher estate tax rate on assets that are distributed in a certain way. Using France as an example: if you leave property to a cousin, it carries a higher tax consequence than if you were to leave the same property to a sibling.
Dealing with estate planning that includes any foreign assets will require a lot more work to make sure that everything is accurate in each document. Every document, both foreign and domestic, should be reviewed to make sure they all comply with the rules and regulations of both countries.
Since each document should be cross-referenced to make sure that they go along with the laws, you will see more up front costs. Just keep in mind that these steps will save you even more money in the future by preventing costly mistakes.
If you have already set up your estate plan but have added foreign assets since then, you need to make sure that you speak with an experienced estate planning attorney such as Dan Higson to make sure the newly acquired foreign assets are covered.
Any type of strong estate plan benefits from an experienced estate planning attorney, but in the event that you have any foreign assets, it is even more important to have that experienced attorney there to help you along the way. He or she will take the time to help you double check everything, make sure you are leaving everything as it should be, and that everything is filed in the correct way.
If you have more questions about estate planning in the state of California, contact us today.
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