Offshore assets: Separate wills for each country is a good idea

Question: My accountant does not believe it is necessary to have an offshore will if there is no immovable property involved. Is this the case?

Answer: You can certainly get by with having only one will. However, if you have offshore assets, having separate wills for each country’s assets should speed up the finalisation of the estate.

Only original wills may be acted upon, so the assets in each country must be dealt with in sequence. This means that once the first country’s assets have been dealt with, the will must be sealed and sent off to the next country where a South African would need to go through an onerous and often costly validation process before it could be accepted as enforceable in that country.

When that country’s assets have been dealt with, the process would be repeated for any other countries where you hold assets.

This would be needed for immovable assets as well as movable assets such as shares and unit trust investments. I recently came across an estate where the only offshore asset was a portfolio of unit trusts in the Channel Islands. The estate took two years to be finalised.

If you have separate wills for each country where you hold assets, the various wills may be dealt with simultaneously, which will speed up the process significantly.

In SA, you are allowed to bequeath any of your assets to anyone. This is not necessarily the case in other countries. I recently had a situation where a client had an asset in Dubai. When he died, the asset had to pass on to his father and not his wife, as was his intention. It is therefore important to find out whether you will be allowed to bequeath your assets in the way in which you want.

As a rule of thumb, if a British flag has ever flown over that country, you are likely to be allowed to bequeath your assets in any way you like. If it has not had British influence, you may have a situation of forced heirship and have external rules applied.

I am seeing a number of situations where people are investing in countries in order to get a “golden passport”. Many of these, like Portugal, practise forced heirship. It is therefore important that you look closely at the inheritance rules and ensure that your overall inheritance wishes are met.

If you have any investments in countries that practise forced heirship, you should look at the rules regarding how your assets must be distributed. In such instances, having a separate will dealing specifically with the assets held in each such country may be the most appropriate approach. This is particularly important if you want to avoid lengthy estate administration delays.

Where no separate offshore will is available and the South African letters of executorship are not deemed acceptable in terms of dealing with a foreign asset, having a separate offshore will that aligns with the forced heirship rules of the country concerned would streamline the entire estate planning process and allow all the offshore assets to be dealt with at the same time as the administration of the SA estate.

My approach is to keep things as simple as possible: Have separate wills for each country where you have assets, and ensure that these wills are correctly drafted so as not to revoke the will in any other country, resulting in your dying intestate.

So, to answer your question, you can get by with one will, but having separate ones for the various jurisdictions could make the inheritance process a lot easier. DM

Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at financialwellnesscoach.co.za. Send your questions to [email protected].

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R29.

DM168 1 July 2023