Administering Cross-Border Estates: The Importance Of Protecting Yourself

March 2024

The process of winding up an estate can become particularly complicated if it encompasses assets in more than one country. This might be the case if the person who has died resided, owned property or had business interests overseas.

If you’re acting as a personal representative (either as an executor or administrator) for an estate of this kind, much of the responsibilities you will have will be the same as if you were acting for an estate without international interests. However, a cross-border element is likely to add a greater level of complication, and the more complex an estate, the greater the chance of mistakes being made.

There’s always a reasonable level of risk involved when acting as a personal representative. This is because when you are in this position you could find yourself being held personally – and financially – liable for any mistakes. It’s also possible for any creditors or beneficiaries of the estate to take legal action against a personal representative if they believe they’ve acted against the best interests of the estate.

The risks of a situation like this arising can be higher in cross-border estates, as personal representatives have to navigate probate rules and regulations in multiple jurisdictions.

What are the possible risks?

Misunderstandings and translation errors. One of the biggest risks when administering an estate involving overseas interests is the simple matter of overlooking a crucial step due to not understanding the rules and regulations in the countries in which the estate holds assets. This can become even more of an issue if there is a language barrier and documentation has to be translated. Not only can this create a possibility of translation errors, there’s also a risk of failing to meet proper procedure. Many jurisdictions will require steps to be taken to ensure any translations are properly authorised.

The validity of overseas wills. A Will that is valid in the country in which it was made will not necessarily be considered valid in any other country in which the estate holds assets. This can be a particular issue if someone who was legally domiciled elsewhere has assets that need to be administered under English law and the law in their domicile country does not require the appointment of executors.

Multiple wills. Cross-border estates are one of the few situations where it may be permissible for the person who has died to have left more than one valid Will. People with assets in multiple countries sometimes make a separate Will for each country. This can be a sensible way to address the issue of different assets being subject to different inheritance laws, but it can also create an additional level of complexity. Personal representatives will need to be completely sure that neither of the wills revokes the other and that they’re not contradictory.

Determining which country’s rules assets are subject to. In order to start the process of winding up a cross-border estate, the personal representatives will have to determine which country’s inheritance laws to follow for which assets. This can be more clear cut in some situations than for others. Land and property is often subject to the laws and regulations of the country its located in. However, this is not always the case, and things can be more difficult to determine for other kinds of assets such as bank accounts, shares, moveable chattels or business interests.

Inheritance tax and death duties. It can be difficult to determine how much inheritance tax or death duties an estate owes in each country. This can be a particularly complex calculation if the issue of which jurisdiction assets should be administered under is not clear.

Conflicts in rules between jurisdictions. Not only does each country have its own rules on inheritance, it will also have its own rules about how the issue of cross-border estates should be dealt with. Sometimes the laws in the countries in which an estate holds assets will complement each other, sometimes they will clash significantly. It is vital to determine what any conflicts of rules will mean in practice and how the situation can be successfully navigated.

Protecting yourself in these situations

With so many possible risk factors involved, if you’re taking on the role of personal representative under these circumstances, it’s wise to consider how to protect your own position.

The number one piece of advice we can give here is to seek trusted legal advice early in the process of managing the estate. This advice should be from a solicitor with special expertise in cross-border cases. This is a complex legal area and it is vital to seek advice from experts in order to protect both your own interests and the interests of the estate and its beneficiaries.

The majority of solicitors who specialise in cross-border estates partner with legal professionals in other jurisdictions. This allows them to work together on your behalf to ensure the estate is administered in a way that meets the necessary legal obligations in each country. This kind of legal partnership is a very effective way to ensure that no significant issues are being overlooked and that any conflict of laws between the jurisdictions involved has been carefully considered.

A cross-border estate specialist will be able to advise on the individual particulars of your case, including what protection you might have in respect of foreign inheritance tax and death duties, and what else you may be able to do to protect against financial liability.

If you have any questions about protecting yourself in a legal situation like this, please don’t hesitate to get in touch.

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