Planning for international clients takes special care. This blog focuses on how to handle assets outside the United States. In last week’s blog I examined how citizenship and residence are important in determining U.S. estate taxation.
As American lawyers, our focus is American law, as it should be. However, when a client has assets overseas, the laws of the other jurisdiction(s) come into play.
For example, if a client owns realty in Canada, the transfer to a U.S. trust may trigger income tax recognition in Canada. As American lawyers, we would not even think of this as an issue, since there is no problem from an American tax perspective. Similarly, some jurisdictions mandate that certain land or property only go to certain statutorily-designated people. Thus, an estate plan that leaves assets to people other than those who are required to inherit the property would be void. This highlights the importance of consulting with local counsel in the foreign jurisdiction whenever foreign property is involved.
Typically, wills in the U.S. contain a provision that revokes all prior wills. Sometimes, clients with property in more than one jurisdiction will have a will controlling property in country A and another will controlling property in country B. In such a situation, it would be important to except the other will from the revocation, by including a sentence such as “I hereby revoke all prior wills and codicils, except the will executed by me in Paris, France, on December 1, 2013.”
In last week’s blog, we examined how citizenship and residence are important in determining U.S. estate taxation. In this week’s blog, we examined how it is important to coordinate an international estate plan by incorporating advice from local counsel. Also, as with the U.S. estate plan, it is important to coordinate all the moving pieces in the plan.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
www.aaepa.com
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