Estate planning considerations for offshore Investors

How to circumnavigate the risks imposed from having assets in multiple jurisdictions.

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With South African markets providing poor returns in a sustained low-growth environment, there has been a deluge of Investors choosing to move some of their assets offshore.

Investing offshore can lead to unforeseen estate planning consequences, therefore one should consider the practicalities of investing abroad, as they relate to the winding up of an estate in the unfortunate event of death.

THE NEED FOR A FOREIGN WILL

Part of this analysis should involve an enquiry as to whether you require a foreign Will if you have offshore assets. If you wish to include the offshore assets in your South African Will, this should involve careful consideration with the guidance of an experienced professional, to assess whether it is a viable option to refer to your worldwide estate when nominating heirs in your estate.

Whilst considering your options, the following practicalities should be taken into consideration:

  • The estate administration authorities in each jurisdiction in which your assets are held, generally require an original Will or at least an apostilled or certified This may lead to delays with the finalisation of your South African estate.
  • Certain jurisdictions necessitate compliance with different validity requirements that may differ from South African legislative requirements with regards to format, execution and witnesses
  • South African law of testation may very well differ from that of the offshore jurisdiction, and your South African bequests may not be feasible in an offshore For example, bequeathing a property in Europe to your spouse may not be achievable because of forced heirship laws precluding you from depriving your children of their share in that inheritance. Assuming that the content of your South African Will is applicable to your worldwide assets can lead to practical administration complexities.
  • Be conscientious of bequeathing your estate to your South African family trust or testamentary trust in your South African If this extends to your offshore assets, you may very well cause the offshore assets to have to be liquidated and repatriated back to South Africa to be held by the local trust.
  • Generally, the value and type of the offshore asset would indicate whether it is practical to have a separate The general practice is to ensure that there is a separate Will if the asset is an immovable property.
  • If you have an offshore Will drafted, you must ensure that the South African Will and offshore Will do not revoke or contradict each other. It is recommended that the drafter in each jurisdiction be made aware of the existence of the Will in the other jurisdiction.
  • Consider whether there are any inheritance taxes levied in the offshore jurisdiction so that you can ensure that there is adequate liquidity to pay those

Whilst the above is not intended to be an exhaustive checklist of your considerations, it does highlight the necessity to engage with relevant industry experts on the estate planning consequences of investing abroad.

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About the Author
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Sarah Simson

Head: Fiduciary, Sasfin Wealth

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