During probate the decedent's estate is valued. This means all of the assets must be discovered and beneficiaries determined. The executor in charge of the estate distribution is declared. The process continues until all assets are legally transferred to the beneficiaries. In addition, the executor must determine if there are creditors to the estate, notify creditors and secure all assets of the estate.
These are not all the duties of probate and the process of probate can take many months.
When property and assets are in a foreign country
Owning property/assets in another country can be a wonderful experience. For those who can afford to have a vacation or second home in another country, the ability to "get away from it" all is certainly appealing.
I have written often about the risks and rewards of owning foreign property. But another article caught the eye of my researcher recently. It involves the changes of laws regarding probate.
Yes, laws change in any country, and changes can have a dramatic effect on the costs of ownership and inheritance of property .
Take for example, recent legislation in the UK. Here is the link to the very informative article about the changing laws of probate in the UK: https://www.financialplanningtoday.co.uk/news/item/9465-financial-planners-brand-new-probate-charges-extortionate
The article is titled:
Financial Planners brand new probate charges ‘extortionate’ in Financial Planning Today (U.K.)
The article concludes that under the new ‘system’ of probate – “…Under the system a £250,000 estate would pay nearly six times more than they do today at £1,250 and a £500,000 estate will pay over 10 times more at £2,500.”(Note: this may or may not apply to foreigners owning property in the U.K.)
Quoting Rachael Griffin, tax and Financial Planning expert at Quilter (U.K.), who stated that “the changes would make estate planning more complex and (she) suggested using trusts to help reduce the value of estates for Inheritance Tax purposes.”
“The replacement of the flat rate probate fee of £215 (or £155 if using a solicitor) will likely mean people with large estates will face extortionate fees and with property values at historically high levels the number of estates falling into a top band are likely to be quite high.”
The above change/comment is for the U.K. It is beyond the scope of this article to discuss potential outcomes for individual property held in the U.K.
Like any other investment, it is critical to keep current in changes that can affect your foreign property investments (including vacation properties.)
If your estate includes foreign property investment - I recommend an annual review of a person’s estate planning documents with an eye to recent changes in legislation (in the U.S. and abroad) that might impact your plan.
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