For most people who create estate plans in the Greensboro, North Carolina area, foreign property issues are not a significant concern. Most people do not own property located in other countries, but for those who do, foreign property issues can be significant. What do you have to do if you own property that is located in another country? What additional steps will you have to take?
Estate plans for people who own foreign property can be much more complicated than those created by people who do not have such assets. Regardless of where your property is located, there are some key issues you’ll have to consider.
Estate Planning When you Own Foreign Property. Foreign Law
The big wild card with any foreign property issue is what law applies. In general, each country will have its own laws that apply to property located within its borders. Those laws may or may not be affected by international treaties that apply to foreign nationals who own that property, or may they may not. Generally speaking, most people who own property in a foreign country will have to contact an attorney who practices in that jurisdiction. Your own estate planning attorney can coordinate with such an attorney to ensure that your plan is complete.
Estate Planning When you Own Foreign Property. Inheritances
One of the most important issues to consider when crafting an estate plan is determining how your foreign property will be treated as an inheritance. For example, some nations, such as France, operate on a civil law system. In such countries, a decedent’s legally recognized heirs automatically inherit the property upon the owner’s death.
In other situations, a country may recognize the validity of an international will, one drawn in accordance with the terms of the Uniform International Wills Act. This act gives nations the ability to legally recognize the validity of a will created by someone who is not a citizen of that nation, but who owns property there in. However, only a minority of states have adopted this act, and North Carolina is not amongst them.
Estate Planning When you Own Foreign Property. Taxes
Another important issue with foreign property estate plans comes with taxes. Different countries treat estate, inheritance, property, and income taxes differently, and often apply different rules to non-citizen or non-resident property owners. You may also face tax issues because you are an American citizen who owns foreign property.
For example, if you are a United States citizen who owns property in France, the Untied States may tax that property as a part of your estate. You may also have to pay French taxes on that property, especially if it is real estate. Further, French law imposes higher taxes on property transferred from an estate to more distant relatives, such as a cousin.
If there is one lesson to take away from this discussion, it’s this: talk to your lawyer. Foreign property estate planning issues can be complicated, and you need legal advice if you want to plan appropriately.
To help protect your foreign estate, contact The Law Offices of Cheryl David at 336-547-9999. One of our competent estate planning attorneys will be able to help you.