dunroving

Does anyone have experience with the legal situation regarding leaving a will when you are a UK citizen but living in the US, with property in both countries? And wanting to leave property to people who live in both countries (i.e., some live in UK, some live in US)?

I don't have any intention of popping off any time soon, but thought I'd better be responsible just in case. One piece of advice I was given by the useless financial advisor I wasted $1500 on was to have a UK and US will, with the UK will dealing with UK property and the US will dealing with US property. I alwasy thought you could only have one "valid" will.... that if multiple wills exist, the one signed last is the valid one...

Being a cheapskate, I've bought a Will-making software package, but it doesn't seem to offer any answers. My experience with financial and legal advisors here is that most of them don't know how to deal with people in our situation. And I don't want to spend $1500 again just to find that the "expert" knows less than I can find out myself by searching the Web...

Does a US will have provenance over property held outside the US? And vice versa for a UK will?

Not sure if this belongs in the Lounge area, as it affects all expats, but I thought there may be some answers specific to the US system....

sibsie

I looked into all this when I left England for Spain. It is important to have two wills covering the countries in which you have property and assets. I have one for UK property and one for Spain. When I leave Spain I'll have one for the US. Remember probate laws etc., are different in the US to UK.

You also need to pick an executor who can administer the will effectively. I have different ones for the different countries.

sibsie

In answer to this no. The country in which the property is has prevailing laws that can't be overturned by another country. Your inheritants won't be paying US inheritance tax on UK property. That would be paid in the UK and vice versa.

dunroving

Thanks, Sibsie. Nice to know my FA was right about something...

Pulaski

I wouldn't be so sure about having two wills - a will is, after all, your "final will and testament", and two things can't be final.

If the residual beneficiary (the person entitled to "everything else") in your later will finds out that there is an earlier will in another country (and a will, so far as I understand things, voids all earlier wills) then I think that you've set the scene for some court action.

adamfdz

I asked my sister-in-law whi is an American attorney. She said you do need both a UK and US will. In case of any legal challenge, especially in the US, only a will drawn up in the country following legal rules of doing so etc etc will count. You can get an English will kit from amazon.co.uk and that explains it all. I would advise on getting your US will done by a US lawyer too, just to make sure.

Cheers!

sibsie

That's the same as my UK lawyer and US financial advisor told me. Apart from the Amazon bit

dunroving

Maybe the solution is to have two wills that say exactly the same thing, i.e., that include the property in the "other" country. That way, each follows the legal wording etc., in each country. If my US will can't legally include UK property, that part will be null and void - no probs, as it will be covered by the UK will, and vice versa.

I'm not talking about massive amounts of property (putting myself through grad school took care of that!) or complicated bequests, so hopefully the double-will thing should be fine, esp. if they say the same thing. Isn't a complicated will, just don't want the state to take anything that doesn't belong to them, or decide who my stuff goes to.

Thanks to all for the advice - I'm off to Amazon.co.uk!

Pulaski

Another word of warning, what your will says has nothing to do with what the state wants to tax. If you are permanently resident in the USA then if you die in the USA I'm certain that the US taxman will want to include your world wide assets in your estate, irrespective of what your will says.

The same is true of the UK, based on your "domicile", which may be deemed by the British taxman to be the UK even if you have taken US citizenship and settled in the US.

Of course, how the US taxman would find out about assets in the UK not mentioned in your US will is another question entirely!

sibsie

But the double taxation treaty between the two places allows for claiming back tax that is paid twice.

Pulaski

But that doesn't mean you can avoid declaring an inheritance, merely that you don't pay extra tax. Say the British iheritance tax is low/ zero, and the US's much higher, then a person who has settled in the US would leave an estate chargeable to US inheritance tax on their world wide assets. To not delare UK assets would be tax fraud against the US Inland Revenue. The same would apply if US inheritance tax was lower than that of the UK and you failed to declare the US inheritance to HMIR.

dunroving

So, the country your estate is taxed in is the country you drop dead in? What if a beneficiary is resident in the UK? Isn't the "country of taxation" dependent on the beneficiary? For example if I left a friend in the US $10,000, she'd be taxed on it in the US, whereas if I leave my cousin in the UK $10,000, he'd be taxed in the UK?

dunroving

FYI, I tried Amazon.co.uk - they won't ship software outside the EU. Ah well, maybe I can get it shipped within the UK and have someone mail it to me. It was only about 8 quid, so extra shipping still won't be too expensive, hopefully.

Jxab12

Inheritance issues it would appear are much more difficult if you are a PR in the US rather than a US citizen. I know many people who have gone for citizenship just to avoid the inheritance issues of a PR.

Pulaski

Not necessarily. Both countries have an idea as to who gets the right to levy the tax, and the rules are not necessarily consistent. Thankfully there is also a double taxation treaty to ensure that you don't get taxed, even postumously, on the same thing twice.

I am not an expert on what the US considers its jurisdiction for inheritance tax, but I know that in the UK it is "domicle", a very specific term that relates to your home country, which means that it is very difficult, though not impossible, to change. If you lived in the US for many years but returned home to die, you would have pretty mucnmade certain that HMIR would claim your global assets as chargeable to British inheritance tax, the smae would probably apply if you maintained an address in the UK, even if you didn't visit there in many years.