“Only put off until tomorrow what you are willing to die having left undone.” (Pablo Picasso)
If you own assets outside South Africa, you may have wondered: Is my local will enough? This is a question many South Africans are asking, and the answer will depend on your own unique situation. Let’s break it down.
Why your South African will may not be enough
A South African will can cover all your local and global assets and typically will do so unless otherwise specified. But practical and legal challenges can arise when dealing with foreign laws, tax regimes and regulations:
- Delays and costs: If your executor has to deal with assets in another country this can take considerable time and incur additional legal fees for authentication/translation of documents, applications to recognise appointments and so on.
- Legal conflicts: Many countries have “forced heirship” rules that will override the provisions of your will and require that specified portions of your estate must go to “protected” heirs. In France, for example, your children will inherit up to 75% of your estate. Worse, some legal systems may not recognise your local will as being valid at all.
The case for a foreign will
You might anyway benefit from a foreign will if:
- You own immovable property abroad: Immovable property is generally subject to the laws of the country in which it is situated, making a foreign will advisable.
- You have significant movable assets overseas: Movables such as investments, shares, bank accounts etc, although likely subject to South African legal principles, could still be easier to manage with a separate will.
- You spend a lot of time in another country: Regular visits or dual residency could complicate estate administration and make a foreign will an advantage – even if it’s not strictly necessary.
- You want to minimise your estate’s tax bill: A foreign will might be recommended to you as part of tax planning, which is essential to minimise the risks of double taxation, estate duties and other financial penalties on your foreign assets. This is because we have a residence-based taxation system so SARS will – with few exceptions – be looking at all your assets worldwide.
How a foreign will works
A foreign will is drafted according to the laws of the country where your assets are located, and should:
- Ensure compliance with that country’s laws and regulations.
- Work alongside your South African will to avoid duplication or conflict.
- Simplify the process for your loved ones when the time comes to administer your estate.
Key considerations
Legal advice is crucial as your South African and foreign wills must align. Contradictions might render one or both wills invalid or open to challenge. When drafting your will(s) be careful to:
- Ensure that your various wills clearly specify which of your assets each applies to.
- Avoid inadvertently revoking your other will/s – specify in each will that it does not replace your other wills, which are to remain valid concurrently.
- Not allow duplication or conflict to creep in over time – diarise regular reviews of all your wills on an integrated basis.
Remember that drafting and maintaining multiple wills may incur additional expenses – but it can also save your heirs lots of money and time. Separate wills should be structured to streamline and simplify the administration process in different jurisdictions.
Protecting your legacy at home and abroad
Ensuring that your wishes are honoured and that your loved ones are protected starts with the right legal advice. If you’re unsure whether you need a foreign will, let’s talk. A consultation can give you peace of mind – and save your loved ones time, money, and stress in the future.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
© LawDotNews