Can my children inherit if they live overseas?
If you are dealing with an estate with beneficiaries located abroad, there are a few additional issues that need to be considered.
The simple answer to the question, can my children inherit if they live overseas? is yes, but there could be a few hurdles to finalise matters.
International Bankruptcy Searches
Legal professionals are required to undertake a bankruptcy search for each beneficiary before distributing inheritance funds to them. This mitigates the risk that the Personal Representatives and the lawyers will be subject to a claim from a bankrupt beneficiary’s creditors.
A bankruptcy search should still be undertaken even if the beneficiary lives abroad. UK bankruptcy searches only include bankruptcies in England and Wales. If the beneficiary lives in another country, a bankruptcy search should be carried out in that country.
The International Bankruptcy Searches website provides bankruptcy searches in most countries. You can order overseas bankruptcy searches via the website or by email. The prices and timescale for searches are set out on each of the specific country pages.
Getting Valid ID Documents
As an executor or Personal Representative, it’s important to verify the beneficiaries' identities before sending any payments to them. This will usually involve the beneficiaries sending you their original or a certified copy of their identity documents.
Beneficiaries located abroad are unlikely to want to post their original documents overseas.
The best solution is to ask the overseas beneficiary to provide a copy of their ID, certified by a notary public and legalised in their own country. Then, using the details on the apostille, it is possible to verify the authenticity of the document.
Consider Currency Exchange
Beneficiaries located abroad will likely request that you transfer their inheritance to their bank account in their home country.
When distributing funds to a foreign bank account, the payment will usually need to be converted from Pounds Sterling to another currency. The offered exchange rate is often poor, and the transfer can considerably erode the amount of the inheritance payment received.
To act in the best interests of the estate and preserve as much of the inheritance funds as possible, it is advisable to consult a recommended currency broker. They will be able to convert the currency and arrange the transfer at a favourable rate, potentially saving the beneficiary large sums of money.
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Double Taxation
Beneficiaries resident abroad may need to pay tax on their inheritance in their home country, even if UK inheritance tax has also been paid.
Overseas beneficiaries may be entitled to receive tax refunds or relief to prevent or limit double taxation.
The credit or relief may need to be claimed from HMRC or information about UK taxes may be requested by the beneficiary so that they can make a claim in their country of residence. Therefore, it is always worth considering the tax position to ensure the correct application will be made to HMRC or so that you can provide the beneficiary with valid information.
If you are an executor of an English will, and you live overseas, you need to know your options. As an executor, under UK law, you can be personally liable for mistakes that cause a loss to the estate, so making the right decisions from the start is crucial.
Winding up someone’s affairs after their death is often very time-consuming and can also be complex. While it is possible to administer a UK estate while living overseas, it is likely to make matters considerably slower and more complicated. It is preferable to appoint someone based in the same legal jurisdiction as the testator (person making the Will).
Let’s examine the role of an executor and how an overseas executor can handle estate administration, including appointing someone to represent them.
What does an executor actually do?
After someone dies, the executors named in their Will need to finalise the deceased’s financial affairs. This process often involves applying for a Grant of Probate, which is the document that gives an executor the legal authority they need to deal with banks and sell any property the deceased may have owned.
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The role of an executor in Probate includes the following:
Register the death – the executor or a relative can do this
Find the Will
Arrange the funeral – a relative can do this, but the expenses will be paid from the estate by the executor
Value the estate – identify all of the assets and liabilities and obtain a value for them
Calculate whether Inheritance Tax is payable
Pay Inheritance Tax, if this is owed
Apply for a Grant of Probate, unless the estate is a small estate. If a property needs selling, a Grant of Probate is always necessary
Once the Grant of Probate is received, collect the deceased’s assets, including selling them where necessary
Collect in the estate assets,
Pay any money owed by the deceased and their estate
Prepare detailed estate accounts
Send a copy of the estate accounts to all of the residuary beneficiaries for approval
Distribute the estate as specified in the Will and obtain receipts
Can I apply for a Grant of Probate if I am an executor of a UK Will living abroad?
If you are an executor of a UK Will living abroad, you can still deal with an estate administration, including applying for a Grant of Probate. However, the job of executor involves a lot of correspondence, and you will need to sign many documents. Living overseas can make estate administration difficult and much slower than usual.
As an executor, you should ideally distribute the estate within one year after the date of death. If it has taken longer to sell a property, you may be able to delay, but it is essential to deal with matters as soon as possible.
There is a deadline for paying Inheritance Tax. This is by the end of the sixth month following the death. If you pay the Inheritance Tax late, the estate may have to pay a penalty and interest. As the estate executor, you would be personally liable for this.
This means that if you are overseas, you must move quickly to deal with an estate to avoid legal difficulties.
How do I administer a UK estate if I live abroad?
It is always best to have someone in the UK deal with an estate, if possible.
If more than one executor is appointed, you can consider having power reserved. This means that the other executor or executors will apply for a Grant of Probate. The grant will note that you have power reserved. You will not need to participate in the estate administration. If you want to be an executor in the future, you can ask the Probate Registry to appoint you. In the meantime, the other executor will wind up the estate on their own.
Alternatively, you can appoint an attorney in the UK to deal with matters on your behalf. This is often the easiest and quickest way for an overseas executor to deal with an estate administration. It means that someone will be available in the UK to apply for the Grant of Probate, arrange for documents to be signed and deal promptly with any enquiries raised by HM Revenue & Customs or the Probate Registry.
What are the risks of handling probate yourself?
DIY probate is perfectly legal and is sometimes the best option – especially with very small estates. But it does come with risks – which are likely to be increased if you are based overseas and the deceased was based in the UK, with property here.
I am an overseas executor – how can someone administer the estate for me?
To appoint an attorney to act as your representative to deal with an estate administration, you must fill in the government’s form PA11 – Power of attorney (Will). This allows you to appoint up to four attorneys to deal with the estate administration. You will not usually need more than one or two.
If the deceased did not leave a Will, the person entitled to deal with the estate administration can also appoint an attorney. In this case, they would fill in form PA12—Power of attorney (Intestate).
The form needs to be sent to HMCTS Probate once it is complete.
The attorney will then have the authority to apply to the Probate Registry for a grant of representation.
It is important to select someone you know will be able to handle the job of estate administration, as you may be personally liable if mistakes happen and the estate suffers a loss as a result.
Your attorney will need to be able to calculate the Inheritance Tax and prepare estate accounts. They will also need to understand that the role of an attorney is likely to be time-consuming.
If you do not have anyone suitable, you can ask a UK probate specialist to deal with the estate administration on your behalf. They will be able to let you have the form to be signed and will send it to HMCTS Probate for you. They will then deal with the whole administration, including preparing estate accounts and distributing the estate to the beneficiaries.
Your chosen professional will keep you updated as to the progress of the estate administration, but delays are far less likely as you will not need to sign documents.
If you have questions about estate planning, you may find the answers to most FAQs in our Q&A section.
Feel free to give us a call if you’re ready to make your Will or Lasting Powers of Attorney. We’re always happy to help.
