You might recall reading our article in the December 2020 Beacon introducing this three-part series reviewing the use of one or two Wills in your estate plan. In our first article, we dealt with the importance of understanding that different countries have different legal rules applicable to estates, inheritance and family law, the benefits of having one worldwide Will and the fact that there is no one-size-fits-all approach to decide whether a worldwide Will is appropriate for your unique circumstances.
In the second of our three-part series, we will unpack some considerations around having multiple Wills governing various assets in different countries .
Some people believe that having a Will drafted in each jurisdiction will prevent all problems. This is not necessarily the case and we recommend that you seek bespoke legal advice to determine whether having more than one Will is right for you.
There are however some factors that may necessitate a foreign or offshore Will (or having a few of these) in addition to having a local Will for your South African assets. These considerations include: the type of assets you own, which legal systems apply to your foreign assets, the ability of your estate to have cash on hand to settle taxes and costs due as a result of your death (and in which jurisdiction these need to be paid), the needs and location of your beneficiaries (such as dealing with children or persons needing special care) and some practical considerations about the winding-up procedure.
Some clients choose to have an offshore Will to facilitate a more efficient process of administration since the local and offshore estates can be dealt with separately and simultaneously. This is beneficial. However, caution still should be exercised as the two Wills need to be carefully drafted to operate alongside one another.
Generally speaking, if you own assets in a country with forced heirship rules, it is good to consider having a separate foreign Will governing your assets in that country. Since each country’s laws are unique (and can have far-reaching implications), we recommend that you consult with a local expert where this is the case.
A foreign Will is also normally advisable if you own immovable property (like a house, farm, flat or stand) overseas, since this must be transferred according to the laws of that country and all foreign legal formalities must be adhered to. Although a foreign Will may not be required by law, it may sometimes be practically advantageous.
Having multiple Wills may allow for the South African and foreign estates to be wound up separately and simultaneously. This can be helpful, especially in countries that require estates to be wound up within a certain amount of time. Where a foreign language is spoken, having a Will in the language of that country could also be beneficial to ensure smooth administration of the assets in that country and avoid costs and delays incumbent on translation of legal documents.
Then again, drafting an offshore Will can be expensive upfront, which is sometimes a deterrent. It also means that you need to choose an executor in each legal jurisdiction where you have a Will.
Care must be taken when drafting Wills in various jurisdictions to ensure that the documents do not revoke one another. The various legal professionals from each jurisdiction must collaborate to ensure that your Wills work in cohesion where multiple Wills are necessitated. Distribution of assets, costs and estate planning goals must be carefully planned to ensure a cohesive outcome for your family.
In the final article in the series we will explore the importance of proper estate planning, the complexities of having children and joint offshore bank accounts with regards to your Will.
Chartered Wealth Solutions is an authorised financial services provider
(FSP no. 13909)