Own assets in many countries? Prepare separate Wills to ensure smooth transfer to beneficiaries

With the increase in the number of expatriates globally, a large number of individuals now own assets across multiple jurisdictions. As succession laws differ across countries, formulating a comprehensive estate plan is a critical decision for individuals

March 25, 2021 / 11:41 AM IST

Sandeep, his spouse Damini and daughter, had migrated to the United Kingdom (UK) about a couple of decades ago. Before moving, he had liquidated all his assets in India, apart from the sizeable fixed deposits with the New Delhi branch of one of India’s largest banks, and a residential apartment in a co-operative housing society in a prime area of New Delhi. Sandeep passed away in June 2020 in London, being one of the unfortunate victims of COVID-19.

In his Will, which was executed in London, Sandeep had disinherited his daughter from his estate, citing irreconcilable differences due to the daughter splurging the family wealth on vices. All his assets were bequeathed solely to Damini, who was also appointed as the executor to his estate.

However, due to oversight, he had not provided a nomination to his bank account in New Delhi. Since Sandeep had not executed a Will in India, when Damini approached the bank in India to access the funds in Sandeep’s account to repay certain outstanding debts in UK, the bank requested her to provide an indemnity bond along with either: (a) a no-objection letter from the daughter, or (b) an ancillary probate from an Indian court for the Will executed in the UK for transferring the funds to her account. The co-operative housing society also requested similar documentation for updating her name in the records of the society.

As their daughter wanted a share in her father’s wealth, she was unwilling to provide a no-objection. Consequently, Damini applied for a probate (i.e., certification of a Will by a court) in the UK. Once such probate is received, she would approach the Indian courts to obtain an ancillary probate (i.e. obtain letters of administration for the assets in India). Since the courts in the two countries would have to be approached sequentially, first in the UK and then in India, it would take longer for the legal heirs to access the funds in the bank account, during which time, the debts would remain outstanding.

This is not an isolated incident. Many individuals forming a part of the Indian diaspora abroad, who own or hold assets in multiple jurisdictions, are facing the same predicament – “Should I prepare separate Wills for my assets in different countries?”

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Also read: Executing a will: The meaning and significance of probate

Aspects to consider

First, the different jurisdictions in which you own assets may have different and potentially conflicting succession laws, depending on whether such countries follows a common law, civil law, or sharia law legal system. A single Will may not be aligned with the succession laws of every jurisdiction.

Second, keeping in mind the time expended to obtain a probate in each of the jurisdictions, having separate Wills for assets in each jurisdiction instead of a single Will would expedite the process of obtaining probates.

Third, having a separate Will for each jurisdiction would ring-fence your assets in that jurisdiction from potential claims from tax authorities and creditors in other jurisdictions.

Also read: Follow these 7 steps to transfer assets smoothly to heirs after your time

However, while preparing separate Wills, you need to also draft each Will in consonance with the other Wills to ensure that dispositions mentioned in one Will do not conflict with those in the other Wills. Further, you should not forget to review your Will in every jurisdiction in case of any changes in your estate plan to avoid any potential inconsistencies. Lastly, preparing multiple Wills involves expending additional time, effort, and costs as opposed to a single Will.

Moreover, the succession laws in certain jurisdictions may levy inheritance taxes on the transmission of assets to the legal heirs of an individual. While preparing separate Wills for each jurisdiction may not address the inheritance tax implications, Trusts and other estate planning structures may be evaluated to make your succession planning tax-efficient.

Also read: Will or Trust? Here’s how you must choose the best way to transfer assets to your loved ones

Key Takeaway

While it may not be prudent to insist on separate Wills for assets held in multiple jurisdictions in all the cases, you can safely assume that in the interest of ensuring that your assets are available to your legal heirs expeditiously, preparing a separate Will may be considered as a preferred choice.

Lately, with Indians constituting a large part of the international migrant population, an estate plan incorporating separate Wills for each jurisdiction may be an efficient option for such global citizens.
Shantanu Gupta is Head - Legal & Business Development, PlanMyEstate Advisors LLP
first published: Mar 25, 2021 11:41 am

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