One thing that 2020 has taught us is that we live in the global era. Increasingly, notwithstanding the various lockdowns imposed this year around the world, South Africans work, live, invest in, emigrate and travel to various countries.
As a result of our participation in the global economy, many of our clients or their family members and friends own
offshore assets, including bank accounts, investments, shares in private companies, vehicles, and fixed property to name a few.
While you’re focused on living your life and growing your wealth, it really does also pay to consider estate planning when you consider acquiring assets in foreign jurisdictions. Every country has its own legal framework governing property, investments, marriage, children, tax, Wills and succession. Many people forget to consider what will happen to their assets on death – and assets around the world bring some complications of their own to your estate planning! In this two-part series, we will unpack some considerations which affect whether you need one worldwide Will or multiple Wills to govern your offshore and local assets.
Whether your assets and estate require one Will or two is often a matter of professional opinion, convenience and practicality. For this reason, when you have assets in multiple legal jurisdictions, it is best to seek advice from your fiduciary legal specialist based on your unique circumstances and needs.
Different countries have differing processes for winding up deceased estates and allow different levels of freedom to choose who inherits your assets. A Will drafted in South Africa is not necessarily applicable, appropriate or enforceable in other countries. Countries such as Spain, France, Mauritius and Portugal have a system of forced heirship (a set of legal rules which limit a person’s freedom to distribute his or her estate). Countries where Shariah law prevails present their own unique complications and forced heirship rules. Assets located in such countries might be subject to these forced heirship rules, so it is important for the person who drafts your Will to know about all your assets – and to get the correct information about all the legal jurisdictions in which they are held.
Normally, your South African Will covers your worldwide assets. It is always better to mention this expressly in your Will to avoid any doubt, but this will be the default position even if it is not explicitly set out in your Will.
One worldwide Will allows a consolidated and centralised approach to the administration of your estate after you pass away. You appoint one executor in your Will, and that person will be responsible for dealing with your assets wherever they may be situated in the world. This will be a beneficial approach if you do not have many offshore assets, if all your offshore assets are liquid (i.e. not immovable property), or where either your local or offshore estate may have some liquidity challenges that need to be managed.
Caution should be exercised in making use of only one Will; however, since not all countries’ legal systems are prepared to recognise a South African Will. Cross-jurisdictional language differences could preset major challenges and some assets may not be dealt with by your local executor, resulting in your executor needing to appoint an agent in a foreign jurisdiction to deal with those assets. This would naturally incur additional costs which your estate would be liable for.
As you can see, there are many factors affecting the practicality of one worldwide Will, and caution should be exercised before using this estate planning strategy. Please keep a lookout for our next newsletter, dealing with the use of multiple Wills in your estate planning.
If you need an additional Will please contact Philene@charteredlegacy.co.za or your RetiremeantTM Specialist.
Chartered Wealth Solutions is an authorised financial services provider
(FSP no. 13909)