5 Issues to Take Note When Addressing Overseas Assets in Your Will

5 Issues to take note when addressing overseas assets in your will

Over the course of your life, you may have acquired overseas assets for investment purposes, as a family holiday home, etc. You may wonder what happens to your overseas assets when you pass on? Can you include them into your assets to pass on to your loved ones? And how do we go about doing it? If you have assets, such as bank accounts, properties, or jewelry located overseas, writing a Will on your own can be hard.

In this article, we will touch on the issues you have to take note of when dealing with your overseas assets in your Estate Planning. This will come in handy to those who are looking at how to manage their overseas assets when planning out their Wills and Trust for their family.

You can include overseas assets to your Singapore Will. In fact, testators (people who create Wills) often do this as it may be more convenient as compared to drafting two separate Wills for your assets in two different countries. However, there are 4 issues you have to take note before you decide to include your overseas assets to your Singapore Will.

Your overseas immovable property is subject to the laws of the jurisdiction it is located in

This means that all immovable properties, such as houses, land, condominium will be subject to the laws of the jurisdiction that the immovable property is located in. For example, if you create a Will in Singapore, the house you own in America that was listed in the Singapore Will would still be subject to and dealt with according to the American law. Your beneficiary, the person who inherits your property, will thus have to pay relevant taxes for the property, as specified by the American inheritance tax rules.

Your overseas moveable assets are subject to the laws of the jurisdiction where you are domiciled in

This means that all moveable properties such as money in bank, accounts, cars, and jewelry will be subject to the laws of the jurisdiction of the country that you are domiciled in. What is a domicile? The domicile is the country which a person officially has as their permanent home, or has a substantial connection with.

Hence, if you create a Will in Singapore, any overseas movable property mentioned in the Will would also be subject to Singapore law. If you create a Will in Malaysia, overseas movable property mentioned in the Malaysia Will would be subject to the Malaysian Law.

If you die domiciled in Singapore and you create a Will in Singapore, any overseas movable property mentioned in the Will would also be subject to Singapore law. Even if you created a Will outside of Singapore, such as with the creation of a Malaysian Will to cover your movable assets in Malaysia, such property is subject to the law of your domicile i.e. Singapore law and not Malaysian law.

Types of Domicile

  1. Domicile of origin: the place/ country of the individual’s parents’ home.
  2. Domicile of choice: in which the person chooses to replace his/her former domicile, which can be a domicile of origin or domicile of choice and acquires a domicile of choice in another country. According to common law, every independent person can acquire a domicile of choice by satisfying the following conditions:
    a) One must have freedom of choice; b) One must make an intention to change their current residence; c) One must change the residence to some other state; and d) One must have an intention to make the new residence their permanent residence.
  3. Domicile by operation of law: domicile that the law vests in a person without taking into consideration a person’s residence or intention to change residence. There are two classes of persons who acquire domicile by operation of law:
    a) those persons who are under the control of another; and b) those on whom, the domicile of another is given by law.

The “resealing of probate” in other  jurisdictions

When you write a Will in Singapore, the executors of the Will whom you have appointed must apply to the Singapore court for a “Grand of Probate (GP)”, which will give them the power to carry out the instructions in the instructions in your Will..

However, when your Will includes assets (whether movable, immovable or both) located in another country’s jurisdiction, that jurisdiction must “reseal”, or give legal recognition to, the probate that your executors were granted in Singapore. Only then will your executors have the same power to carry out your instructions in relation to your overseas assets.

Note that Commonwealth jurisdictions, such as Australia and Malaysia, can typically reseal probate granted by a Singapore court. If a jurisdiction rejects your application for the resealing of probate, you will likely be treated as having died intestate (i.e. having died without making a Will), and your overseas property will be subject to the inheritance laws of whichever jurisdiction your property is located in.

Note that the resealing of probate involves its own separate court application, and thus involves more costs. The extra costs involved is one of the reasons why testators sometimes choose to create separate Wills for the assets that they hold in different jurisdictions instead of having just one Singapore Will which includes their overseas assets. A much easier process is to engage in a professional Estate Planning company that will have the expertise and experience to help you in managing the Will writing and distribution of assets both in Singapore and overseas to benefit you and your loved ones efficiently.

Another point to note on dealing with foreign investments is that the Will may need to be translated into the language of the jurisdiction, which can be quite costly. Hence it will be better to create separate Wills for the different jurisdictions and appoint a corporate executor and trustee to manage the overseas legal process.

Other jurisdiction may not recognise your Will

Another risk of including your overseas assets in your Singapore Will is that sometimes other jurisdictions may not recognise your Singapore Will. Consequently, you will not be able to have that Will executed in that jurisdiction according to your wishes.

In general, jurisdictions that do not follow Common Law, such as Indonesia and Thailand, might not recognise a Singapore Will. In contrast, Common Law jurisdictions, such as the United Kingdom and New Zealand, will generally recognise a valid Singapore Will. However, this is also dependent on whether the jurisdiction in question:

a) Accepts the formal validity of the Will; and b) Accepts the terms of the Will.

In relation to these two factors, a common law jurisdiction may sometimes accept that a Will is formally valid (i.e. it complies with the jurisdiction’s legal requirements for making a Will), but also refuse to accept the terms of the Will because they conflict with other national laws or regulations. This results in the Will not being recognised by the jurisdiction.

For example, if you were to leave all your United Kingdom assets to charity, a person who can show that they were financially dependent on you can apply to the United Kingdom court under the Inheritance (Provision for Family and Dependants Act) 1975 to challenge the terms of your Will.

If they are successful in their application, the term in your Will stating that all your United Kingdom assets should be donated to charity would not be accepted, and a portion of such assets could be allocated to the applicant instead.

You can have multiple Wills in different jurisdictions

It is possible to have multiple Wills in different jurisdictions. However, this must be managed carefully so that the Wills do not supersede each other. The different Wills must be drafted carefully, and it will be a complicated process.

For example, there could be an instance where your beneficiaries may not want to manage your overseas assets. You may have properties in Malaysia, but your children may have no interest in living in Malaysia at all. In this case, you may do the following to manage your assets in Malaysia:

a) appoint a professional trustee to manage the asset; b) appoint one or two beneficiaries as the Trustee for that asset

Advantages of having separate Wills in different jurisdiction includes:
• Both Wills can be probated at the same time
• Overseas Will is already written in the language of the country, which can save cost on translation
• The Will drafted will be recognised in their own respective countries
• Different states, different province may have different legal process and interpretation of the Will (as pointed out in point 5)

For professional Trustee and Wills Writing services, you can engage PreceptsGroup to help with your Estate Planning and Business Succession needs. We have expertise built on more than 20 years experience and we are dedicated to providing comprehensive planning and solutions for wealth distribution, wealth succession, estate administration for individuals and families.

This article was first published in our newsletter, The Custodian Issue 15 on Sep, 2020. Click here to access our latest newsletter.


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