While the issue is not that common, there are some people who create an estate plan in Florida who need to consider specific issues about foreign property, or property located in foreign countries. What happens to this property after you die? Do you need to create special tools or take precautions to ensure these assets are disposed of in the way you want? Are there additional steps you will have to take that people who don’t own foreign property will not? Today we are going to take a look at the kinds of issues owning foreign property will bring up when creating an estate plan.
Foreign Property in Estate Planning. International Laws, Wills, and Inheritances
You might know that each state has its own rules about what people can, cannot, and must do when it comes to drafting a last will and testament. But so too do different countries have different laws about inheritances. If you own property that is located in a foreign country, what do you have to do to make a will? Do you need separate wills for each country? Can you get away with a single will that addresses all of your possessions?
In general, having property located in more than one country will mean, at the very least, that you need to create a will for each country in which you own property. Further, because the laws of each country are so specific, you’ll need to have an attorney licensed to practice law in that country draft your will for you. If you have foreign property we will help find an attorney capable of creating a will that meshes with the estate plan we draft on your behalf.
Foreign Property in Estate Planning. Taxes
Beyond inheritances, what do you do about the taxes on your foreign property? How does the property factor in to an estate tax calculation? Will you have to pay taxes in the country where the property is located? Will your beneficiaries have to pay an inheritance tax on that property even if they are residents of the United States.
Again, the laws of each country differ significantly, and you’ll have to evaluate each situation based on the circumstances.
For example, the United States has tax treaties with a variety of foreign nations that allow the country where the property is located to levy an estate tax against the estate after the property owner dies, while at the same time giving the estate a tax credit that will apply in the United States. So, for example, if you own a home in Greece, the Greek government can impose an estate tax against the home at the time of your death, but any taxes paid to the Greek government will be credited to your estate so that, if your estate has to pay estate taxes in the United States, you won’t be taxed twice for the same asset.