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Tony Wickenden: Getting wills right for non-doms

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Having looked over the past few weeks at some of the fundamentals of creating a valid will, I am going to look this week at some international aspects of wills. 

Where an individual has assets in several countries, it may be appropriate to have concurrent wills in each of those countries.

Since there is a general rule that a new will will normally revoke a former will, it is important where a concurrent will is made that one does not inadvertently revoke the earlier one. 

Therefore, in such cases, a clause should be included to expressly exclude any earlier will from the effect of the revocation.

It is important to remember that, particularly in respect of any real estate, that is, land and houses located in other countries, such property is likely to be treated as property subject to the local laws of succession.

The rules governing the cross-border administration and distribution of estates are mandatory. This means, for example, any forced heirship rules would apply. By way of example, under French law it is possible for succession to be governed by two different sets of laws:

  • succession to immovables, which will be governed by the lex situs (that is, the law where the asset is physically located), regardless of the residence, nationality or domicile of the deceased; and
  • succession to movables, which will be governed by the law of the deceased’s last domicile

Take a UK domiciled and resident individual owning a property in France. The destination of the property on their death will be fixed in that, for example, if they leave a widow and two children, two-thirds of the property will pass to the children. This would include children from a former marriage.

Similar provisions apply in a number of other countries and cannot be overridden by any provision in a UK will.

Those living in the UK but wishing to claim non-UK domicile status on death should remember that it is important that they make a will in the country of their claimed domicile (or in any case not in the UK), and that they should recite in the will their claimed domicile. 

There could be a concurrent will in respect of UK assets but the main will should be outside of the UK. The will should also be regularly updated.

If a non-UK-domiciled individual makes a will under English law, such a will may only be valid in respect of any real property they own in England and Wales. Even if such an individual were to prefer English law to apply to all their assets, this will not be possible.

Provided a foreign will has been executed in accordance with section 9 of the Wills Act 1837, it can be admitted to probate in England. If this condition cannot be satisfied, such a will may still be admissible, provided it has been executed in accordance with the laws of the testator’s country of domicile (section 1 of the Wills Act 1963).

The 1973 Washington Convention on International Wills sets out the requirements for such wills which, when complied with, are recognised by contracting states. In the UK, appropriate legislative arrangements have been made to put this into effect but the appointed date has yet to be announced. In principle, the requirements for a valid will are reasonably similar in most western countries and a will executed in the UK is likely to be recognised in most of those countries.

One method of avoiding probate in respect of assets held offshore (and therefore avoiding the need to deal with those assets under an individual’s will or perhaps having a concurrent will in the country of location of the asset) is for the assets to be held in trust. Naturally, this will only be possible in jurisdictions that recognise the concept of a trust.

In such cases access to the assets would be required and therefore any trust will normally be for the primary benefit of the donor during their lifetime, with further settlement provisions coming into effect on their death. As long as the assets are held by the trustees and the powers of the donor are not such that they would make the trust likely to be considered a sham, the trust should be effective to avoid probate both outside and inside the UK. 

Tony Wickenden is joint managing director of Technical Connection

Through Techlink Professional, you can access CII and IFP-accredited CPD, a full and up-to-date technical library, technical updates, business generation ideas and, through our additional ASKservice, case-related technical support. Techlink Communicator delivers content for regular client and professional adviser communication. Go to www.techlink.co.uk and click the Free Trial link. Go to www.technicalconnection.co.uk for more details on our services or call 020 7405 1600.

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