Should one only deal with immovable assets in a will for a non-domiciled individual. My thoughts are that the law of the foreign domicile will govern succession to the movables. Therefore, it is unclear whether an English will dealing with movables would even have effect. However, my thinking seems at odds with precedents, which usually cover worldwide assets or limit the will to English and Welsh assets.
My invariable practice was to seek instructions to find out from an authentic source (not Maitre Google) the probate and succession law of any foreign jurisdiction in which a client had assets of significant value. I was fortunate in that my clients were generally already well-advised locally, usually upon originally acquiring the assets. Also there was a pattern, once their assets reached a threshold of value/geographical spread/dislike or distrust of the lex situs, of their “corporatising” their assets into a company/trust structure because companies, conveniently, never die. This is the reverse of UK IHT planning for a non-dom, eroded somewhat since Sch A1 IHTA.
The dilemma is often that such structures are costly to set up and even more so to run but it is usually better to initially acquire the assets through them rather than transfer them in later with potential transfer tax costs. A bonus was often the greater ease of keeping track of these assets and their income. This regularly necessitated choosing (and monitoring!) non-resident administrators (I have some 10 ruthless criteria) and the client getting used to the uncomfortable role of no longer owning his assets and having to ask them if they would kindly do this or that with “their” assets. Some never understand that their company’s money does not belong to them so they are not good candidates.
If a foreign asset is to be acquired or is already owned by a client seeking estate planning advice similar thought processes are in order adjusted for cost and scale. The cost and risk of the Ostrich Strategy can end up much more expensive and inconvenient post-mortem in finding out what law applies and its effect. A local will for local assets is usually part of the plan if only to ease probate formalities. If you think ours are bad…
Jack Harper
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As you identify, the point is that immovables in E&W are subject to the succession law of E&W (lex situs) - including the matter of whether a Will is formally valid (see also s1 Wills Act 1963) - so you know that an English (and Welsh) Will will be effective. However, I have only occasionally seen a Will limited to immovables in a particular jurisdiction - I have seen this more often in Jersey. Also, if you limit the English Will to immovables in E&W, what is going to govern the movables in E&W? Will there be a foreign Will governing those? Presumably not?
But that causes a difficulty: if lex domicilii (law of domicile) applies to the succession of movables, an E&W adviser cannot normally advise on that.
You also have the difficulty, especially for a non-UK resident and domiciled individual, that a Will will only be considered formally valid if it is made according to the law of (s1 Wills Act 1963):
- the place of the person’s nationality, domicile or habitual residence (for each of these, whether at the time of execution or at the death of the testator)
- the place where the immovables are (to the extent that the Will deals with those)
- the place where the Will is signed.
So, if a non-UK resident and domiciled non-UK national executes outside E&W a Will which relates to movables in E&W, we need to check whether the law of the place of that person’s domicile, habitual residence or nationality (at the time of execution of the Will, ideally) or of the place where the Will was signed agrees that a Will executed in “English form” is formally valid. It might well do, but we have to ask the relevant foreign adviser to confirm this and we might need to make some adjustments.
We also have to consider which succession law actually applies to devolution of the movables (“essential validity”): we may start with the “law of the testator’s domicile”, but that jurisdiction may apply renvoi (partial / whole) or maybe it does not. The main thing is that you have to have a dialogue with the foreign adviser to get to the bottom of it. Usually it can be resolved relatively simply.
I take a cautious view if a client tells me that they only have a property (ie immovables) in E&W. Most of them have chattels in E&W (ie in the property, maybe a car as well) and often a small bank account, at least. Even then, there is a risk that the property might be sold and the proceeds still be in E&W at the time the client dies, in which case they will have movables and not immovables.
I can envisage as situation, though, where the succession law applicable to movables is so different from that applying to immovables that there is no choice but to have an E&W Will for the E&W immovables and another Will (possibly a foreign Will, or possibly an E&W Will which has been substantially adjusted). The key thing is to speak to the foreign adviser and see what can be achieved without unnecessary complication.
Paul Davidoff
New Quadrant
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That is an extremely useful answer Paul, and I really appreciate it.