WILLS, PROBATE AND INHERITANCE
Why is a will so important?
The importance of wills is often mistakenly overlooked, and as a legal document that determines how your assets will be distributed after you die, it is imperative that you have one in place. A will is also critical to address the hundreds of complexities that can arise before or after your passing, and in the event you need to appoint another person to take care of your financial affairs.
A professional will can provide clarity at the most difficult times and prevent the need for tough choices to be made by others when you can no longer express your wishes. Having a will arranged by a professional will enable you to make decisions while you still can, and not leave them to the courts or other legal entities that have no emotional connection to your circumstances.
Having a comprehensive and thorough will can also help relieve the burden on your loved ones. A lengthy probate process can cause significant distress and uncertainty.
If you are living overseas the complications can increase, so speaking to an expert is essential to ensure your loved ones are looked after as you would wish after your death. Remember, you may have to alter your will again in future to account for a separation, the arrival of more children or the acquisition of new assets.
What does a will cover?
Having a will in place enables you to:
Choose who inherits your assets after your death, and leave specific items to certain people.
Appoint a professional or loved one to execute the distribution of assets to avoid confusion and stress.
Discuss appointing a Power of Attorney in case of ill health and being unable to express your wishes.
Appoint a guardian for the safe custody of children if nobody has parental rights.
Provide assistance on valuing your estate, assessing and navigating inheritance tax liabilities.
Learn which changes in circumstance require adjustments to be made to your will.
Understand ‘gifting’ and what qualifies and what does not.
Give yourself and your loved ones peace of mind during the toughest times.
How does being UK domicile affect your will?
Whether or not you are liable to pay UK inheritance tax will depend on whether or not you are still considered a UK domicile. Remember, you can still be a UK domicile whilst resident in another country. At birth, you will have been automatically assigned the domicile of your parents, known as your domicile of origin. Unless you make a point of changing it, this will then continue to be your domicile for the rest of your life. That includes moving overseas.
In order to change your domicile, you will need to meet the basic criteria of living in another country and intending to stay there indefinitely. Above that, each request is judged on its individual merit and evidence.
Even if you are no longer domiciled in the UK, in certain scenarios HMRC may consider you ‘deemed domicile’. For example, if you spent a minimum of 17 of the last 20 income tax years as a resident in the UK.
Any UK domicile is required to pay inheritance tax on their assets, worldwide.
Do you need more than one will?
It is vital that wherever your assets are in the world, that they are covered by a will. It may be that you need more than one will in order to guarantee this. A will made in the UK will not necessarily have jurisdiction in another country, leaving the future of your assets uncertain and at risk. Your will needs to reflect the laws of the country in which your assets reside and this may be markedly different to those of the UK. For example, a number of European countries follow the principle of forced heirship which can override the directions of a UK will.
However, if you are planning to use more than one will, it is vital that you seek expert guidance. You'll want to ensure that nothing in one will contradicts or overrides the other. Such confusion can easily result in protracted legal discussions as various parties try and establish what exactly you wished to happen to your assets. This is not a position that you want to be leaving your loved ones in at an already difficult time.
Following your passing, multiple wills can undergo probate at the same time, speeding up the overall process. In contrast, a single will that covers assets in several countries can only deal with one country at a time. Each section must clear probate before work on the next can begin, lengthening timescales.
If you would like to learn more about writing a professional will that is watertight internationally, please get in touch today.