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The aim with estate planning is to ultimately reach your goals in the distribution of your assets and liabilities. These goals should make provision for the management of your estate during your lifetime, but also after your death.
While a clear, well-written Will is always essential to avoid potential family and third-party disputes, South Africans with offshore assets should also determine if they are not exposed to a foreign legal system or tax as it may than be necessary to draft an International Will.
To determine this, one usually consider the type of offshore assets the testator owns and where these offshore assets are located. If for example the testator’s only offshore asset is a bank, one will that deals with all worldwide assets will suffice. In such cases, the offshore bank would normally recognise the South African will, provided it covers all worldwide assets.
However, as each country has its own legislation regarding inheritance and signing of Wills, it can be possible that your South African will does not comply with all the requirements of the country where your foreign assets are located. This may result in the non-inheritance of your foreign assets in terms of your Will.
The succession laws of that country may even stipulate that the asset vests in a specific family member, irrespective of the stipulations of your Will. Some civil law jurisdictions – mainly European countries – have a forced heirship regime, which essentially limits the testator’s ability to bequeath assets freely.
Each jurisdiction applies its own specific rules, which often results in a conflict of laws if the person is domiciled in or is a national of one country and has assets in another. Your domicile, habitual residence and nationality are all variables that influence whether the foreign laws are applicable or not, as does the nature of the asset in question. This is also essential if you want to ensure the preservation of these assets for your intended beneficiaries, limit unnecessary delays, costs and taxes, and prevent any nasty administrative surprises. Whether probate has to be obtained and the fact that certain jurisdictions do not recognise an executor is therefore also relevant.
Another element to take into account is that of accidental revocation. This occurs for example when an individual who only has South African assets drafts a will applicable to all worldwide assets and only acquires an offshore bank account, for example in the UK. If an UK advisor drafts a will for these assets without knowing that the individual also has South African assets, the advisor could unintentionally revoke the South African will by not explicitly stating that the new will only relates to UK assets. Since the beneficiaries of the wills may not be the same, accidental revocation could have far-reaching consequences.
An International Will can be a convenient way to avoid the forced heirship rules and, for a South African national, ensure that South African law applies to the succession of the European assets.
Thus, whether it is truly necessary to draw up a separate International Will or just have one global Will depends on the following:
A separate International Will also has other advantages: It is administered in line and simultaneously with your South African assets; an executor/agent who is familiar with the required procedures in the relevant country where your assets are located will save you time and money; and someone who draws up Wills professionally within the jurisdiction of the relevant country can provide you with advice regarding the possible dangers in relation to tax accountability and hereditary succession when it comes to assets outside the borders of South Africa.
We thus highly recommend drawing up an International Will with reference to foreign assets, and also that your South African Will must be drawn up in English and it should pertinently refer to the fact that the document is only applicable to your South African assets.