Can A Will Include Foreign Assets?

Yes, a will can include foreign assets, but it requires careful consideration of both Indian and foreign laws. While an individual can specify the distribution of their foreign assets through an Indian will, the laws of the country where the assets are located will also play a crucial role in determining the validity of the will and the process of transferring those assets.

Key Considerations for Including Foreign Assets in a Will:

Jurisdictional Issues:

When a person owns foreign assets, their will must consider the laws of both the country of residence and the country where the assets are located. Each jurisdiction has its own rules regarding inheritance and the execution of wills. Therefore, it is important to ensure that the will complies with the legal requirements of both the country where the person resides and the country where the foreign assets are held.

Probate and Recognition of the Will:

The Indian will may be recognized in the foreign jurisdiction, but probate procedures might need to be carried out separately in the foreign country for assets located there. Some countries may require the foreign will to be probated locally before the foreign assets can be distributed. In such cases, a separate probate process will be required in that jurisdiction.

In some countries, it is possible to have a foreign grant of probate or a resealed probate to ensure that the Indian will is honored abroad, but this may involve additional paperwork and legal formalities.

Different Rules for Foreign Real Estate:

If a person owns real estate in a foreign country, that asset may be subject to the laws of the country where it is located. Many countries have restrictions on the inheritance of foreign real estate, and some may even require a local will to be drawn up to address the distribution of such assets.

For instance, many countries in Europe and the Middle East have laws governing the inheritance of real estate that may override foreign wills. In such cases, you might need to create a separate will for the foreign property, specifying its distribution according to local laws.

Foreign Bank Accounts and Investments:

Foreign bank accounts, shares, and investments can usually be addressed in a will, but the distribution of these assets might require compliance with the laws of the country where the accounts or investments are held. For example, certain jurisdictions may require the heirs to follow local tax laws, file documents in that jurisdiction, or even seek approval from local authorities to transfer such assets.

Taxation Considerations:

Foreign assets are often subject to the estate and inheritance tax laws of the country where they are located. A person’s estate might face double taxation—once in India and once in the country where the assets are located. To minimize tax liability, it may be useful to consult a tax advisor who specializes in cross-border inheritance issues.

India has entered into Double Taxation Avoidance Agreements (DTAAs) with various countries, which may help in reducing or eliminating double taxation of foreign assets. However, the specific rules will depend on the relevant agreement.

Executor of the Will:

The executor of the will plays a key role in ensuring that the wishes of the testator are carried out, especially when foreign assets are involved. The executor must be familiar with the laws and processes in the country where the foreign assets are located to ensure that the estate is properly administered.

It is advisable to appoint an executor who is familiar with both Indian and foreign legal systems, or to appoint a separate executor for the foreign assets who can manage the probate process in the foreign jurisdiction.

Steps to Include Foreign Assets in an Indian Will:

Consult Legal Experts:

It is important to consult with legal professionals in both India and the foreign jurisdiction where the assets are located. An attorney can provide guidance on the specific legal requirements for creating a will that covers foreign assets, as well as the probate process in that country.

Create Separate Wills if Needed:

In some cases, it may be necessary to create a separate will for foreign assets, especially if the foreign jurisdiction has strict laws regarding inheritance. However, care should be taken to ensure that the provisions of the foreign will do not conflict with the Indian will.

Clarify Distribution of Foreign Assets:

In the will, clearly specify the foreign assets and the names of the beneficiaries for each asset. Include as much detail as possible about the location and nature of the foreign assets to avoid any confusion. You may also need to include additional documentation, such as bank statements or property deeds.

Ensure Validity in the Foreign Jurisdiction:

Make sure the Indian will is valid in the foreign jurisdiction. This may require complying with additional formalities, such as having the will notarized or registered with relevant authorities. If necessary, have a lawyer in the foreign country review the will to ensure that it meets the local legal standards.

Consider Tax Implications:

Be aware of the tax implications of bequeathing foreign assets. Seek professional advice regarding estate taxes, inheritance taxes, or other potential tax liabilities in the foreign country.

Example:

Ravi, an Indian resident, owns property in the United States and several bank accounts in the UK. He creates a will in India that outlines how he wants his Indian assets distributed. For his foreign assets, Ravi ensures that the will specifies his property in the US and UK accounts. Ravi consults legal experts in the US and the UK to ensure that his will complies with local laws. He also creates a separate will for his US property, as required by US law, and seeks advice on how to minimize any tax liabilities in both countries.

Conclusion:

In conclusion, while it is possible to include foreign assets in an Indian will, the process requires careful planning and compliance with the laws of both India and the foreign country. It is advisable to seek legal advice in both jurisdictions to ensure that the will is valid and enforceable.