What is an “expat will”?
Strictly speaking, this is not a defined term, but we use it colloquially to refer to a will made in a jurisdiction outside of your domicile. It functions the same as any will but covers the estate located in the jurisdiction where it is drawn and serves to make probate (validation of the will, identification and disposal of the estate, and payment of taxes) a straightforward affair. Multiple wills are known as concurrent wills.
What is the significance of an “expat will”?
Disposal of a deceased expat’s estate can become complicated due to assets (and liabilities) being spread across multiple jurisdictions. An expat may have a will in his country of domicile which covers the international estate, but probate becomes a lengthy and expensive process, as the will cannot be executed concurrently in the various jurisdictions. It must be probated in the jurisdiction it was drawn before it can be re-sealed and application made elsewhere. The requirements for re-sealing may be complicated and will certainly take longer than a separate application for probate for separate concurrent wills. The will may also contain provisions which contravene the laws of other jurisdictions, particularly regarding succession and payment of taxes.
In the UAE and other Islamic countries for example, this poses a significant problem. In the absence of a separate will covering the UAE estate, or while awaiting probate of the single will, the estate, including bank accounts (even if jointly held) will be frozen until liabilities have been discharged, in accordance with Sharia law. If the single will is found not to sufficiently cover the UAE estate, the local courts will examine and distribute the estate according to Sharia law.
Inheritance under Sharia principally operates by a system of forced heirship or reserved shares.
A surviving wife who has children qualifies for one eighth of her deceased husband’s estate, and a surviving husband who has children qualifies for one quarter of his deceased wife’s estate. The remainder of the estate will be distributed among other family members, depending on who survives the deceased at the date of death. Without a will or succession planning in place this distribution will be applied automatically. Even shared assets will be frozen until the issue of inheritance is determined by the local courts. There is also no automatic transfer of shares where businesses are concerned.
France, Italy and Spain also have forced heirship laws, although EU law now allows expats to decide whether they wish their estate to be subject to the succession rules of their country domicile.
Does the UAE recognize “expat wills”?
For UAE based non-Muslim expats, UAE law allows for the laws of the deceased’s domicile to be applied, providing there is a valid will. There are also other options to speed probate, such as registering a will with the DIFC and Wills Probate Registry (DIFC WPR).
There is no “one-size-fits-all” approach to wills and estate planning, especially for expats. At Hoxton Capital, we’re committed to helping expats protect your family and your wealth. Our expat will writing service offers a cost-effective balance between going it alone with an online service, and using a solicitor. Our consultants are trained in wills and estate planning for expatriates and can advise you on the practical, financial and legal factors of various jurisdictions, in order to pass on your estate in the smoothest and most tax-efficient way, even if we don’t manage your investment portfolio. If we do manage your portfolio, we can include periodic review of your concurrent wills in order to account for any changes to your circumstances, and to ensure no conflicts between them. Finally, having an expat will allows you to take steps for inheritance tax planning, such as gifting or structures.