Wills & Trusts
Is a Foreign Will Required?
More South Africans hold assets offshore than ever before. Whether those assets need a separate will depends on what they are and where they sit — and getting it wrong can hold up an estate for years.
It is becoming more common for people to hold assets in foreign countries. Many South Africans invest offshore and own property overseas, and a number of non-residents hold investments and property here.
Whether a separate will is required depends on the type of offshore asset and where it is located.
Why one will can become a problem
A South African will can be recognised in a foreign jurisdiction and be valid overseas. Several problems can nonetheless arise when the estate is wound up.
The original document. The Master of the High Court requires that the original will be submitted. The offshore authority requires the same. It is unlikely that a person has signed two originals — and that single practical fact can delay the winding-up of an estate severely.
Different laws of testation. Each country follows its own law on how a will is made and what a testator may do. Several European jurisdictions follow Napoleonic principles, under which inheritance rules override the intentions of the deceased: a specified portion of the estate must devolve upon specified relatives, and the testator is not free to bequeath it otherwise. This can be planned around, but only if the will is drafted by someone expert in that jurisdiction.
The advantage of separate wills
Obtaining a separate will for your offshore assets ensures that the will complies with the law of that country and avoids a conflict-of-laws problem. If you are a South African who owns immovable property overseas, a separate will dealing specifically with that property is advisable.
Making the two wills agree
Where a person has both a South African will and a foreign will, the South African will must state that it deals only with assets in the Republic.
It must also state that it does not revoke the foreign will, but revokes only previous wills made in respect of South African assets. Without that wording the two documents can contradict each other, and the resulting uncertainty is precisely what the exercise was meant to avoid.
When one will is enough
Consider how substantial the overseas assets actually are. Where they are modest — a bank account, a fund investment — it is likely to be more cost-effective to deal with them in your South African will.
An offshore endowment is a good example: a beneficiary can be nominated to receive the proceeds on the death of the life assured, so it need not be dealt with in a will at all, and the winding-up of the offshore estate becomes much simpler and quicker.
In short
Drafting separate wills can be a somewhat complicated process, but it avoids a great many complications and unintended consequences in the distribution of an estate across different countries — and in doing so usually reduces the costs that would otherwise apply.
It is important to consult an expert when drafting these wills, and on the estate planning consequences that attach to offshore assets.