Your U.S. Last Will and Testament Abroad
Will your Last Will and Testament that you've written and signed to comply with the laws of the United States work in a foreign country where you own assets? The answer to this question will depend on several different factors.
Your U.S. Will Under Foreign Laws
If your will has been created and signed with the proper formalities as required by the laws of your U.S. state of residence and is considered a valid will there, nonetheless, it may not be valid in a foreign country.
For example, if the laws of your state require a will to be signed only in front of two witnesses but the laws of the foreign country where you own assets require a will to be signed in front of three witnesses, then your valid U.S. will may not be valid in the foreign country.
Aside from this, while a handful of U.S. states recognize "nuncupative wills" and/or "holographic wills," most U.S. states and some foreign countries do not. (A nuncupative will is a verbal will that is spoken in front of two or more witnesses, while a holographic will is one that is written entirely in the Testator's own handwriting and signed and dated by the Testator.)
Therefore, if you make a nuncupative will or holographic will that is valid in your U.S. state of residence but the foreign country where you own property does not recognize this type of will, then your U.S. will may not be valid in the foreign country.
Other Problems to Consider
Certain parts of your U.S. will may not be valid due to the unique laws of the foreign country where you own assets. For example, in all U.S. states you are free to leave your property to whomever you want, except that if you are married then all states except for Georgia will protect some part of your estate for the benefit of your surviving spouse, and in Louisiana your descendants are considered "protected heirs" under limited circumstances.
On the other hand, many foreign countries such as France, Germany, Italy and Spain follow the rules of "forced heirship," meaning that all or a portion of a deceased person's property must go to a blood relative instead of, or in addition, to a spouse. This disposition cannot be avoided by stating a different disposition in your will.
Another example of how a U.S. will can create problems in a foreign country is when the U.S. will establish testamentary trusts for some or all of the beneficiaries named in the will. While trusts of this type are quite common in the U.S., they are not in many foreign countries, due mainly to adverse income tax consequences. This could result in substantial taxes being paid to the foreign country which will significantly decrease the amount of foreign assets that the trust beneficiaries will receive.
Finally, if the official language of the foreign country where you own assets is not English, then your U.S. will have to be translated into the official language of the foreign country. It could be a costly endeavor depending on how many pages your U.S. will contain. Also, it is quite possible that after your heirs go through the expense of getting your U.S. will translated into the foreign language, your U.S. will may be deemed to be invalid under the foreign country's law.
What Should Do if You Own Property Outside of the U.S.?
A good U.S. estate planning attorney will recognize that foreign property you own or will inherit will very well need to be addressed outside of your U.S.-based estate plan. Therefore, you will need to meet with an attorney or another legal representative who is familiar with the probate, trust, estate and tax laws of the foreign country where you own property.
It will allow you to determine if your U.S.-based estate plan will, in fact, pass muster in the foreign country or if you will need to create a separate will and other legal documents in the foreign country to address the final distribution of your foreign assets.