International Estate Planning

At Avrio, we work with global clients on their cross-border wealth planning. Each client is subject to unique rules and regulations determined by their nationality and country of residence. One area of focus is estate planning, which is a critical but oftentimes overlooked component of a comprehensive financial plan.

Imagine Johann and Julia live in Singapore. Johann is German and Julia is US and French. They have two kids who have German, French, and US citizenships. In terms of assets, they have Singapore bank accounts, a UK rental property, villa in France, and US and Singapore investment accounts.  

If one or both spouses were to pass away, what happens to the rental property in the UK? Do they need a UK Will or would a Singapore Will suffice? Do they need both? How do French forced heirship rules come into play? Should they establish a US trust for the children? What if the listed guardian lives in Germany where there is inheritance tax? How does Germany treat a US trust for resident beneficiaries? 

Questions like these require a well-thought through, multi-jurisdiction estate plan to ensure assets pass in-line with the values and desires of your family.

What Are the Essential Estate Documents?

Will

While a Will has various purposes, three of the primaries are to establish the executor, guardian, and asset distribution plan. 

An executor settles the estate, ensuring assets are passed to the appropriate recipient. In other words, it is an administrative role. This is not to be taken on lightly as it can take tens of hours to go through documents, find all assets, and work with custodians and insurance providers to distribute them.

For those with children, a guardian is the person who would care for the kids if both parents pass away. The guardian can be a different person than the executor (e.g., maybe one family member is better suited for taking care of children while another is more suited for an administrative/financial role).  

Lastly, a Will lays out who gets the assets. Note that beneficiary designations overrule a Will, so if you have a sibling as the beneficiary of a life insurance policy, but your Will states all assets go to your spouse, the beneficiary designation “wins” and the insurance policy pays out to the sibling. Asset distribution described in a Will is for assets that are not already spoken for via a beneficiary designation.

Health Care Power of Attorney

This enables someone to make health care decisions for you in case of mental incapacitation. The selected person decides whether you should undergo a surgery, how much care to receive, and more. It is also beneficial to name a backup (or “successor”) in case the primary person is unreachable or unable to make decisions (e.g., the primary person is also incapacitated).  

Each country has their own documents. A Health Care Power of Attorney in one jurisdiction might not be legally binding in another. Keep in mind that if you intend on living in a foreign country for a long period of time, it can be beneficial to get local documents.  

Financial Power of Attorney

This is similar to a health care power of attorney but pertains to making financial decisions in case of incapacitation. This enables the selected person to access bank accounts, sell investments to raise cash for living expenses, and manage a rental property, among other things if you are unable to.

US Revocable Trust

This is an especially important document to utilize when you have dependents or a foreign spouse. This trust is “revocable,” meaning you can change it at any time. Assets held in it pass to beneficiaries faster than if they pass via a Will (i.e., through probate). In states like NY or CA, probate can take 1+ years, so it can take 1+ years for an investment account to pass from one spouse to the other if it is passed via a Will. A revocable trust avoids this process and the investment account would, instead, be passed essentially immediately.

Moreover, the other benefit of a revocable trust is that you can create specific provisions that stipulate how funds are passed. For example, if you and your spouse have $10MM and a 13-year-old child, you might not want that child to get all the money now if you both were to pass away. This document can stipulate that the $10MM only provide Health, Education, Maintenance, and Support (HEMS) until the child reaches age 25 and then funds distribute at fixed periods (e.g., 25% at age 25, 25% at age 30, and 50% at age 35).

Lastly, for Americans married to non-US persons, the trust can delay estate tax through a Qualified Domestic Trust (QDOT). If assets are over the estate tax exemption (~$14MM in 2025), funds in excess of this threshold are taxed at 40% before your spouse receives it. However, a QDOT delays this tax until both spouses pass away enabling the non-US spouse to receive money throughout their lifetime without paying estate tax.

Other International Complications

Multiple Wills 

For those with assets located in several countries, having multiple Wills can be beneficial in order to accelerate the probate process. For example, if I have a US Will and assets in the US and Singapore, my family would not be able to access my Singapore bank account until the Will is probated in the US and then probated in Singapore (i.e., it has to go through two probate processes before they can access the cash). However, if I have both a US and Singapore Will, they can probate my US assets at the same time that they probate Singapore assets, expediting the process. If there are liquidity concerns, this can be especially advantageous. 

Foreign Trusts

It is important to avoid a US trust being considered a foreign trust. Foreign trusts have complicated and sometimes punitive US tax implications. If your children are American and the trustee of the trust is located outside of the US, it can be considered foreign and then disproportionally taxed, leaving less funds for beneficiaries and complex reporting on an annual basis. It is important to work with a competent international estate planner to avoid this and other pitfalls.

Inheritance Tax

It can come as a rude wakeup to expats that they owe inheritance tax to the country they reside in. I recently travelled to Japan and had Izakaya with an American there who inherited assets from his parents in the US. He was taxed by Japan on the inheritance even though the parents never lived in Japan! Unfortunately, this is an issue for expats and it is crucial to properly plan in order to avoid an unexpected tax bill.

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International estate planning is a complex topic that requires competent guidance and, oftentimes, a team of experts to ensure assets pass to family members in an effective and efficient manner. For more information on creating a comprehensive, international estate plan for you and your family, please reach out to one of our wealth planners.

This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual. Additionally, you should consult with your Financial Advisor, Tax Advisor, or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, or Association. All efforts have been made to report or share true and accurate information. However, the information may become materially outdated or otherwise rendered incorrect due to subsequent new research or other changes, without notice. The author nor the firm are able to always verify the content from third-party sources. For additional information about the firm, please visit the MAS Website at https://www.mas.gov.sg/  and the SEC Website at www.adviserinfo.sec.gov. For a copy of the firm's ADV Part 2 Brochure, please contact us at info@avriowealth.com.