EmmaMama

Hi,

We have had a child recently and are looking for recommendations for UK solicitors that are able to do UK/US estate and guardianship planning. I am a dual citizen, my husband is UK citizen, we have a house in the UK, currently live in the US (but expect to move back to the UK at some point), son born in US....

I think due to house being in the UK it is best to do this from the UK.... recommendations would be appreciated.

ian-mstm

IIRC, estate planning is usually based on the jurisdiction where you live... not based on where the property is located. If you were to draw up a will in the US, it would be valid only in the US. If you want to ensure that things happen according to your wishes, you'll need to draw up two documents - one valid in the US and another valid in the UK. Each will need to include language pertaining to jurisdiction.

I'm sure others will be along shortly to offer other recommendations.

Ian

Pulaski

I don't believe that having two wills is good advice, at least not simultaneously. I think she needs a will for the US (if that is where she is living), and will need another to replace the US will if/when she returns to the UK.

To try to have two simultaneous wills will always leave the risk that a beneficiary under the later will can challenge any attempt to distribute assets under the earlier will, because pretty much by definition any will voids all earlier wills.

durham_lad

+1

I believe a will begins along the lines of "This is the last will and testament of..." so having 2 wills can cause problems I think.

When we lived in the USA we had a will in the USA even while we owned a house in the UK as well a house in the USA. When we moved back to the UK we wrote a will in the UK to supercede the will in the USA, even though we have substantial retirement accounts in the USA (IRAs). The beneficiaries of the IRAs are named as each other, or split between the 2 children if we are both dead and I expect they will accept UK death certificates.

EmmaMama

Thanks all for the advice, just to clarify that we are only in the USA as a temporary assignment by my husbands work. His work sends us all over the world (lived in NZ before the US). We consider the UK as our 'base' with most assets there. We now expect to be back and forth with the US, but it could be any county. Is there a better way than changing our will every time we move country?

mrken30

You may want to read this article.
https://www.thebalance.com/does-us-l...ountry-3505197

I had experience of Spanish and UK wills. When the estate was being wound up in Spain , Spain did not recognize the English will, but the Spanish will over ruled the English will with regards to Spanish property, even though the English will was much more recent. The will was executed in the UK by a UK solicitor that also dealt with Spanish law.

I know it's not an identical situation, just giving my experience.

Steve_

It's not a case of having two separate Wills, we've had this discussion on here before, it's basically one Will with two separate sections.

IMO it's not practical to have a single Will which covers both jurisdictions completely because the estate laws vary in each jurisdiction. You have to take account of differing methods of probate for example. How living Wills work is different, powers of attorney are totally different, etc.

If all your assets are in one jurisdiction then you write a Will for that jurisdiction and then update it when you move.

My personal view is purely from an estate perspective it's much easier in the US because the estate tax limit is really high and it's simple to dump it all into an inter vivos trust. In the UK it's much harder because IHT kicks in at a much lower level and you have to take into account taper relief. The US-UK estate tax treaty also makes it beneficial to live in the US if you have UK assets, because it limits the taper to 3 years instead of seven.

Estate planning is very complex and I always say it is beyond the scope of this forum because to give any advice we'd have to know about your estate in detail and you shouldn't tell us and we aren't experts anyway.

There are some basic points, such as bearing in mind that estate tax is wholly and totally separate from income taxes. Residence in the US and the UK for estate tax purposes is totally different from income tax. The estate tax treaty is totally separate from the income tax treaty. Many States have estate taxes. Usually it's better to be a US citizen for estate tax purposes if you live in the US, but not if you don't. The law differs for LPRs which is commonly misunderstood.

Be clear in your Will where you reside and what your status is so the probate court doesn't have to guess, give some guidance on what forms your heirs might need to fill in, for example your heirs in the UK aren't going to understand the difference between forms 706 and 706NR - which is huge, non-resident aliens are only allowed a $60,000 exemption from estate tax, for married residents/citizens it's around $11 million (however the tax treaty makes it the same for everyone - but you've got to claim it).

If you're going to get help, I'm sure somewhere in the world there is a person who knows about this from both ends, but in reality you're going to need to see two different people, one in each country and likely there will be blank spots or advice that doesn't make sense. One good example is passing on a SIPP. In the UK this isn't an issue, it's outside the estate, but under US law as soon as it is passed on it becomes a foreign trust and subject to US taxes. So a UK tax advisor might advise packing as much away in the SIPP as possible but your son is American and subject to US taxes. Also sometimes the advice is to put it into a form of trust in the UK (I forget the name it's a commonly done thing), same problem, it's a foreign trust under US law.

Commonly used tax avoidance strategies used in one country don't necessarily work in the other.

mrken30

Would you register a copy of the US will in the UK? Some countries and maybe States may require you to register the will.

https://www.nationalwillregister.co.uk/

Dominic0012

You will be treated as a UK domicile for IHT tax purposes if you moved from the U.K. within the last 4 years and lived in the U.K. 17 out of the last 20 years.

Otherwise you and your partner will be a domicile of the U.S. for IHT purposes

The U.S. and the U.K. have an IGA on estate tax.

US-UK Estate and Gift Tax Treaty (1980)

You will be taxed in the U.K. on your primary property based in the U.K. unless you are still in your first four years of residency in the United States in which case it will be partially exempt from U.K. inheritance tax under residence nil rate band (RNRB).

https://www.gov.uk/inheritance-tax/w...de-the-uk-dies

International estate planning is complex and not cheap. You will need to also consider your son's residency status/citizenship in all this as well.

EmmaMama

Thank-you Dominic and all others who have replied. This is certainly a lot more complicated than I was hoping it would be. Good point about my sons citizenship/residency status, as all his guardian options are in the UK. Does anyone have any recommendations for firms/lawyers that you have worked with in the past that understand all the nuances of expat situations?

Sadly we have passed the 4 years abroad threshold. To make it more complicated it is looking like we will move again next year, although we do not know if this will be UK or US yet.

mrken30

I am about to go an see an attorney to setup a child trust so that my children can be beneficiaries. Hopefully I get around to this in the next week or two.

Pulaski

Sadly? US federal inheritance tax thresholds are much higher than inheritance thresholds in the UK, though some US states also have an inheritance take - you will need to check the state where you live.

Cook_County

If you are a UK domiciliary settling money into a trust could result in an immediate charge to UK IHT. Hopefully, the attorney will be familiar with UK rules.