Frequently Asked Questions
I have property in several jurisdictions (US states or foreign countries). Should I have one testament to dispose of all of my property worldwide or several local Wills for assets in those countries?
The answer depends on the laws of the countries where your assets are located. It is also important to determine which country can be considered your “domicile”.
I am not a US citizen or resident, but have assets in the United States. Can I dispose of my US assets in a testament written according to the laws of my country of domicile?
This depends of whether the US state where your US assets are located recognizes testaments written according to the laws of your country of domicile. The answer is generally no.
Will a foreign court recognize my US testament?
Many foreign countries do not recognize a foreign Will. In many cases the laws of the foreign country itself do not recognize the concept of a “trust” that often forms part of many an American Will (especially if young children are involved). Some foreign courts will not permit or accept an executor named in the Will and will require appointment of a local executor. Complications and delays may arise when trying to pay tax obligations in multiple jurisdictions. Such issues can significantly delay the probate proceedings and result in additional legal fees.
What is Probate?
Probate is the court court process that settles a decedent’s estate and transfers the assets to the beneficiaries. Probate proceedings can be expensive and time-consuming. Additionally, the court proceeding and associated documents are part of the public record. Many people choose to avoid probate in order to save money, spare their heirs a legal hassle, and keep the information about their assets.
Probate avoidance usually involves setting up trusts. These may not be recognized in foreign countries.
What is Joint Tenancy with Rights of Survivorship?
(in some states “Tenancy by the Entirety” when between spouses)
This is the most common form of asset ownership between spouses. Joint tenancy (or TBE) has the advantage of avoiding probate at the death of the first spouse. However, the surviving spouse should not add the names of other relatives to their assets. Doing so may subject their assets to loss through the debts, bankruptcies, divorces and/or lawsuits of any additional joint tenants. Joint tenancy planning also may result in unnecessary death taxes on the estate of a married couple.
What is a Will or Testament?
The document a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate. Wills have no legal authority until the testator dies and the original will is delivered to the Probate Court. Still, everyone with minor children needs a will. It is the only way to appoint the new “parent” of an orphaned child. Special testamentary trust provisions in a will can provide for the management and distribution of assets for your heirs. Additionally, assets can be arranged and coordinated with provisions of the testamentary trusts to avoid death taxes.
What is a Living Will?
Sometimes called an Advance Medical Directive, a living will allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express your wishes yourself. Oftentimes a living will is executed along with a Durable Power of Attorney for Health care, which gives someone legal authority to make your health care decisions when you are unable to do so yourself.
What does Intestacy mean?
If you die without even a Will (intestate), the legislature of your state has already determined who will inherit your assets and when they will inherit them. You may not agree with their plan, but roughly 70 percent of Americans currently use it.
What are Beneficiary Designations?
You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits and bank accounts.
What is a Durable Power of Attorney and when do I need one?
These allow you to appoint someone you know and trust to make your personal health care and financial decisions even when you cannot. If you are incapacitated without these legal documents, then you and your family will be involved in a probate proceeding known as a guardianship and conservatorship. This is the court proceeding where a judge determines who should make these decisions for you under the ongoing supervision of the court.
What is a Revocable Living Trust?
This is an agreement with three parties: the settlor (grantor or trust-maker), the trustees (or trust managers), and the trust beneficiaries. The same person can have several roles in this legal relationship. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further “back-up” managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the settlor’s death.
Who Should Have a Revocable Living Trust?
Trusts are usually set up to avoid probate and maintain the confidentiality of the assets. The expense and time needed to manage the trust must be considered. Simple cases do not warrant trusts.