Complicated Estates and What To Do With Them

 

Estate planning is a difficult task no matter the situation. The process of estate planning involves creating a plan for distributing your assets after death. This can be complicated by having assets located in different states or countries, being a foreign resident, or having multiple beneficiaries from previous marriages.

If you are involved in a complicated estate, it’s important to know your rights and responsibilities as they relate to the administration of an estate. This article will walk you through what makes an estate complicated and what steps should be taken if this happens.

Owning Assets in Multiple Jurisdictions

For many people, owning assets in multiple jurisdictions is a fact of life. Depending on your personal situation, you may own property or other assets in places like the United States and Canada, for example. In these cases, it’s important to have a will that’s valid everywhere you have property— not just in one place.

Assets are a very important part of an individual’s financial portfolio. Owning assets in multiple jurisdictions can be extremely financially lucrative, but when it comes to estate planning, can become a major headache. Ownership of assets in multiple jurisdictions will require some sort of will valid in all jurisdictions, power of attorney everywhere, and a valid trust. This can be difficult because it requires dealing with different laws and regulations depending on the region. It also means having to deal with different taxes and estate processes depending on the country or state you are dealing with.

Furthermore, if it’s possible for any member of your family to inherit an interest in both states (and they may), then they will need to get their own estate plans as well.

You also need to make sure your insurance covers all of these properties and more importantly, check with an attorney who specializes in international law so that they know what kind of documents are needed based on individual circumstances.

If you don’t have a valid will, your assets may be distributed differently than you intended. This can happen if your will isn’t valid in the country where the distribution takes place. For example, if you pass away without a valid will in Canada, your estate will be governed by Canadian law instead of American law—and this could mean that your family members might receive less than what they’re owed under American laws.

A power of attorney is another document that should be valid everywhere you own property. A power of attorney gives someone else the ability to act on your behalf while you’re alive or after death. For example: if you want someone else to manage your finances or make decisions about your health care while you’re alive; or if there are any decisions that need to be made after death regarding how your remains are disposed of (burial vs cremation), who gets what from your estate and how it’s distributed among beneficiaries.

Having Multiple Beneficiaries in Different Jurisdictions

When you are writing a will, it is important to think about the implications of leaving your wealth to multiple beneficiaries.

You may want to leave some money to charity or leave some assets to one person and others to another. This can complicate matters by forcing you to distribute wealth in a way that is “equitable” or “fair” at the risk of causing long-term familial stress or conflict.

Having beneficiaries in different jurisdictions means they may pay different estate taxes or be unable to collect their inheritance at all. Institutions you choose to leave your wealth to may also have to pay taxes in your jurisdiction as well as theirs, which could result in less money going toward their intended purpose.

If you listed a loved one as a beneficiary in your will and they unfortunately pass before the will is executed, the asset will either go to the remaining beneficiaries or the alternate. An alternate beneficiary is usually a secondary or contingent beneficiary who receives the proceeds if the primary beneficiary has died. If there are multiple alternate beneficiaries in case something happens to one of them and they cannot receive their inheritance, then there needs to be an alternate named after each person so that if one doesn’t survive then another will still get whatever money was meant for them in accordance with their designation order.

Additionally, having beneficiaries in different jurisdictions may mean that they pay different estate taxes or are unable to collect their inheritance at all. It can also put institutions (such as foundations) that receive your financial legacy at risk of having to pay taxes in both their home country and yours.

Living in two or more countries

If you’re a citizen of a country other than the US, you may have to deal with two or more tax jurisdictions, legal systems and languages. You might also have to deal with two or more currencies. The complications can multiply if the deceased had assets in more than one country.

The best way to manage these issues effectively is by working with an estate planner who has experience dealing with cross-border estates (often referred to as ‘international estates’).

A ‘living in two countries’ situation can also be complicated if either spouse is a US citizen or resident when they die. In this case, the estate will be subject to US estate taxation as well as taxes in the foreign country where the deceased resided.

Possessing Foreign Assets

There are several different types of foreign assets you may have to deal with.

Foreign bank accounts: If you have a bank account in a foreign country, the value of that account is considered a foreign asset. This could be an individual bank account or an account held in trust or on behalf of another person. Foreign financial institutions may report this information to the IRS unless they agree not to do so under an agreement known as an “exchange information request.”

Foreign investments: In addition to bank accounts held overseas, if you own stock or other investments outside the US, those assets will also be considered foreign assets for estate tax purposes. This applies even if they were purchased through your domestic brokerage firm and managed from within America by someone else (for example, your broker). The price at which these securities trade on exchanges outside America is called their “foreign market value” and can be used for purposes of valuing them for estate tax purposes; however, there can be significant complications when valuing such investments.

When you’re dealing with foreign assets, it’s important to have a US and foreign estate planner in communication. You may have heard that the US has different estate laws than other countries—and this is true! But you can avoid complications by having your US and foreign planners work together.

One issue that can come up is tax declaration issues.  A good estate planner can help guide your beneficiaries through this process.

Another issue is distribution: if you have assets in multiple countries, the country where your money is held may not allow it to leave its borders. That means that even though your beneficiary has the legal right to their inheritance, they won’t be able to use or transfer it until they move to that country! Your estate planner should be aware of these laws so they can advise you on how to avoid them before they happen (which might involve setting up trust accounts).

 


Having a will, trust, power of attorney, and healthcare proxy are essential for every person. It is critical that you have these documents in place before something happens to you. A will is a legal document that tells your family what should happen to your assets after your death. A trust can be used to manage large estates and make sure the money isn’t lost in taxes or fees. A power of attorney allows someone else to make decisions on your behalf if there is ever an accident or other event where you are unable to make these decisions yourself. Lastly, having a healthcare proxy gives them the right to make important medical decisions when necessary (such as organ donation). This document can also be paired with a living will which states how much medical intervention should be done before letting nature take its course (for example: do not resuscitate).

Estate planning can seem like a daunting task. You may have heard horror stories about the process, and you might not know where to start.

But the right lawyer can make all the difference!

Kallicki Collier is a Reno, NV law firm specializing in estate planning and probate law. We understand that your estate plans are important—that’s why we take the time to get to know you and your family, so that we can help you create an estate plan that works for you and meets your needs.

We’ve seen it all, from simple wills to complex trust structures. We’ll work with you to create a plan that fits your unique situation so that when something happens, your family knows exactly what they need to do.

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