Travel and living abroad are becoming more common, and as a result, it is also more common for people to have assets spread internationally. Even while people are alive, this setup has its complications. Once people have died and the executors of their estate are trying to gather together those assets and discover who inherits them, the situation becomes even more complicated.
Every country has unique laws about who inherits assets and how to treat assets when their owner has died. But what happens when assets are in a different country to the country where their owner died?
Who is entitled to deal with those assets?
If you are not already familiar with probates and letters of administration, read our recent article “What is Probate and Letters of Administration?”. Essentially after anyone has died their assets cannot be sold, cashed in or the bank accounts closed until an executor is appointed. The court appoints the executor in what we call a grant of probate. (In the case of letters of administration this is known as the administrator of the estate. For the purpose of this article, we will refer to probate and executors as our example.)
Usually, the executor will be appointed in the country where the deceased has lived and died, and that is reasonably simple. All assets in that country can be dealt with by the executor under their grant of probate because the grant of probate is acceptable to all the organisations in that country.
When there are assets in a different country, the organisations there will not accept a foreign grant of probate. They cannot be sure that it is valid unless it comes from the court in their own country and so will not release the assets they are holding.
So what can be done?
The easiest way to get around this issue is to get a reseal of the probate. This process still requires an application to the court in the country where the assets the executor wants to access are located, but it is a much shorter application than an application for probate. A reseal is attainable only between Commonwealth countries.
If the two countries are not both Commonwealth countries, then a fresh grant of probate is required.
Who is entitled to inherit those assets?
The laws that deal with succession are so different across the world that sometimes even wills are overridden by the succession laws of different countries.
The principle of international law that applies to decide which laws apply to any given property in an estate is called lex situs.
Lex situs states that if an item of property is land (or attached to land – like a house or a building), it is covered by the law of the country where that land is situated. If the asset is anything other than land, it is governed by the laws of the country where the person who owned the asset was domiciled when they died.
FOR MORE INFORMATION
Here at Morrison Kent, we specialise in dealing with these complex asset structures and have a wealth of resources and a network of international connections to untangle even the most internationally spread-out of estates.
It is worthwhile addressing these issues when creating your will. If you have or are likely to acquire assets across the world, we can handle the first stage of this process as well. Having these considerations in place will make sure your loved ones don’t end up with a legal headache when you die.
For more information or to discuss these matters, please don’t hesitate to get in touch with our probate specialist Jenny Lowe on 04 916 0153 or email email@example.com or visit nzprobatesandreseals.com to learn more.