Managing Overseas Assets and Properties During Probate

As an executor, managing the estate of a deceased person can be challenging enough, but the complexity increases significantly when overseas properties or assets are involved. These assets may require engagement with foreign advisors, agents, and authorities to transfer or sell them, as well as navigating unfamiliar legal and tax systems. This guide provides practical advice on how to handle overseas assets during probate and when to seek professional support.

Understanding the Challenges of Overseas Assets

Overseas assets can include properties, bank accounts, investments, or other holdings located outside the UK. Dealing with these during probate often involves unique challenges such as:

• Legal Differences: Each country has its own laws regarding inheritance, property ownership, and probate. Some jurisdictions may not recognize a UK Will or grant of probate.
• Tax Implications: You may need to address both UK Inheritance Tax (IHT) and local taxes in the country where the asset is located, potentially facing double taxation issues.
• Language Barriers: Communicating with foreign authorities or professionals may be difficult without fluency in the local language.
• Local Representation: Many countries require a local agent or lawyer to handle legal processes like property transfers or asset liquidation.
• Documentation: Obtaining and legalizing documents (e.g., death certificates, grants of probate) for use in foreign jurisdictions can be time-consuming and complex.

Given these complexities, it's often advisable to seek professional help to ensure compliance with all relevant laws and to avoid costly delays or penalties.

Steps to Manage Overseas Assets During Probate

Here are key steps to follow when dealing with overseas properties and assets:

1. Identify All Overseas Assets:

   • Review the deceased's records, bank statements, property deeds, and correspondence to compile a complete list of overseas holdings.
   • Contact financial institutions or advisors who may have managed these assets on behalf of the deceased.

2. Research Local Requirements:

   • Determine whether the country recognizes a UK grant of probate or if a separate local probate process is required.
   • Investigate local inheritance laws—some countries have 'forced heirship' rules that dictate how assets must be distributed, regardless of the Will.

3. Assess Tax Obligations:

   • Consult with a tax advisor to understand UK Inheritance Tax implications as well as any local taxes (e.g., estate taxes, capital gains tax on property sales).
   • Check if the UK has a double taxation treaty with the country to avoid paying tax twice on the same asset.

4. Engage Local Professionals:

   • Hire a local lawyer or agent familiar with probate and property law in the relevant jurisdiction to handle legal processes and paperwork.
   • Consider a translator if language barriers exist.

5. Decide on Asset Management:

   • Determine whether to sell, transfer, or retain the asset based on the Will's instructions, beneficiaries' wishes, and practical considerations like maintenance costs.
   • For properties, you may need to appoint a local estate agent to manage a sale or rental.

Finding Professional Support for Overseas Assets

Handling international assets often requires specialist expertise. Here's where to find the right help:

1. International Probate Lawyers:

   • What: Lawyers with expertise in cross-border probate and international inheritance law.
   • How: Search for firms through the Society of Trust and Estate Practitioners (STEP) directory, using filters for 'international estates' or 'cross-border succession' along with the relevant country.
   • Why: STEP members are recognized globally for their expertise in trusts and estates, often with networks in multiple jurisdictions.

2. UK Solicitors with International Networks:

   • Many UK-based probate solicitors partner with foreign law firms to manage overseas assets.
   • How: Ask your UK solicitor if they have connections in the relevant country or search via the Law Society's Find a Solicitor tool, focusing on 'international private client' specialisms.
   • Why: They can coordinate between UK and foreign legal requirements, providing a central point of contact.

3. Tax Advisors Specializing in International Tax:

   • What: Tax professionals who understand both UK Inheritance Tax and foreign tax regimes.
   • How: Use the Chartered Institute of Taxation (CIOT) Find a CTA directory, searching for 'international tax', 'trusts and estates', or 'private client' expertise.
   • Why: They can help mitigate double taxation and ensure compliance with HMRC and foreign tax authorities.

4. Clear Executor's Recommended Partners:

   • We work with professionals experienced in managing overseas assets during probate.
   • If you need a referral to a trusted specialist, get in touch with us.

Key Questions for Potential Advisors

When selecting professionals to assist with overseas assets, ask targeted questions to ensure they're the right fit:

• International Experience: "What experience do you have with probate matters in [specific country]? Have you handled asset transfers or sales in that jurisdiction?"
• Network and Collaboration: "Do you have local contacts or partners in the country to manage legal or administrative tasks? How will you coordinate with UK-based advisors?"
• Tax Expertise: "How do you handle double taxation issues or conflicts between UK and foreign tax laws?"
• Fees: Request a clear breakdown of costs, including any fees for local agents or translators. Ask for a written quote outlining the scope of work.
• Communication: "How will you keep me updated on progress, especially with time zone differences or language barriers?"

Making Your Choice

Choose advisors who demonstrate specific experience with the country or region where the assets are located. Look for qualifications like TEP (from STEP) for international estate practitioners or CTA (from CIOT) for tax advisors. Clear communication, a strong local network, and transparent pricing are also critical factors.

Wrapping Up

Managing overseas assets and properties during probate can be a daunting task due to legal, tax, and logistical complexities. Engaging professionals with expertise in international probate and tax law can save time, reduce stress, and ensure compliance with all relevant regulations. Taking the time to find the right support will provide peace of mind as you navigate this challenging aspect of estate administration.