If you live in the United States and own property or accounts in another country, your estate plan may not work the way you expect. This is especially true if your assets are located in a civil law country.
Many U.S. clients assume that a New York will or trust automatically controls everything they own worldwide. In reality, foreign inheritance laws can override parts of a U.S. estate plan.
This checklist highlights the most common issues to be aware of.
1. List your foreign assets Start by identifying what you own outside the United States.
Start by identifying what you own outside the United States.
This may include:
- Real estate, such as a vacation home or inherited property
- Foreign bank or investment accounts
- Business interests or shares in a foreign company
Why this matters
Many countries apply their own inheritance rules based on where the asset is located, not where you live.
2. Determine whether the country follows civil law rules
Many countries outside the U.S. use a civil law system rather than a common law system.
Civil law countries often have:
- Mandatory inheritance rules
- Limited freedom to disinherit family members
- Strong protections for children and spouses
Why this matters
Even a carefully drafted U.S. will may not fully control how those assets pass at death.
3. Check for forced heirship
Forced heirship is common in civil law countries.
It often means:
- Children are guaranteed a share of the estate
- A spouse may also have protected rights.
- You cannot freely leave those assets to anyone you choose
Ask yourself:
- Are my children entitled to inherit regardless of what my will states?
- Will local law override part of my U.S. estate plan?
4. Understand how trusts are treated
Trusts are widely used in New York estate planning, but they do not always translate well internationally.
In some civil law countries:
- Trusts are not fully recognized
- Trust assets may still be treated as part of your estate.e
- Transfers to a trust may trigger inheritance or gift tax.es
Important note
Placing foreign assets in a U.S. trust does not automatically exempt them from local inheritance rules.
5. Confirm whether your U.S. will is recognized abroad
A U.S. will may or may not be accepted as valid in another country.
Common issues include:
- Different execution requirements
- Mandatory marital property rules
- Local public policy that overrides the will
Some people use a separate will for foreign assets, but this must be coordinated carefully to avoid conflicts or accidental revocation.
6. Consider estate and inheritance taxes in both countries
Owning assets in more than one country often means dealing with more than one tax system.
Potential exposure may include:
- U.S. estate tax on worldwide assets
- Foreign inheritance or succession taxes
- Possible double taxation
Tax treaties exist, but they are limited and vary by country.
7. Do not overlook U.S. reporting requirements
Foreign assets often trigger U.S. reporting obligations during life and after death.
Examples include:
- Reporting foreign financial accounts
- Disclosures related to foreign entities or trusts
- Additional filings by executors and beneficiaries
Failure to comply can create delays and penalties for your estate.
8. Coordinate rather than assume
The biggest mistake in cross-border estate planning is assuming that one set of documents controls everything.
Effective planning usually involves:
- Reviewing foreign law before finalizing U.S. documents
- Coordinating wills, trusts, and beneficiary designations
- Planning for taxes and administration
The goal is not to eliminate complexity, but to manage it before problems arise.