When Clare and Tom set out to create their estate plan, they believed they had done everything right. As expatriates living in Hong Kong since the 1970s, they wanted to secure their assets for their children and grandchildren.

They owned properties and investments across Hong Kong, Thailand, the UK, and Singapore. To simplify matters, they wrote a single will in Hong Kong that covered all their assets worldwide. At least they had the foresight to create a detailed list of assets for each country, which is something many people overlook. Without such a list, executors are often left to embark on a treasure hunt to locate assets.

Unfortunately, this decision led to significant complications after their deaths, turning what should have been a smooth process into a legal and financial nightmare for their family.

The Challenges of Using One Will for Multiple Jurisdictions

Clare and Tom’s single Hong Kong will had to be sent to each country where they held assets for probate. Since each jurisdiction typically requires an original document, and there was only one original will, a certified copy (prepared by a lawyer) had to be submitted to the other jurisdictions. However, acceptance of certified copies is not guaranteed.

This sequential process caused delays and unexpected complications:

1. Thailand Refused Certified Copies
   Thai authorities required the original will to process probate for Clare and Tom’s assets in Thailand. However, the original document was already being used in another jurisdiction. Thailand refused to accept a certified copy of the will, and as a result, Clare and Tom were deemed intestate in Thailand. This meant that Thai intestacy laws governed the distribution of their assets there, completely disregarding their wishes.

2. UK Domicile Issues

Although Clare and Tom had lived in Hong Kong for decades, they spent considerable time in the UK with their grandchildren as Tom’s health declined due to heart failure. Unfortunately, they overstayed the number of days allowed for non-residents in the UK, triggering a review of their domicile status under UK inheritance tax (IHT) rules.

Instead of only being taxed on their UK assets (valued at approximately GBP 1.5 million), the UK tax authorities deemed them domiciled there. This meant that their entire estate, worth around GBP 5 million, was subject to IHT at 40% on anything above GBP 1.1 million.

The result was an unexpected tax bill of approximately GBP 1.56 million that could have been avoided with proper planning.

3. Delays in Singapore
   Singapore authorities were particularly strict about accepting certified copies of wills from other jurisdictions. This led to prolonged delays as additional legal fees were incurred to ensure Singapore’s requirements were met before probate could proceed.

The Estate Took Nearly 4 Years to Settle

What should have been a straightforward process turned into an administrative nightmare that lasted almost four years. Imagine having to deal with this level of complexity and stress while grieving the loss of your loved ones. The delays, unexpected tax liabilities, and legal hurdles could have been avoided with better planning tailored to each jurisdiction’s requirements

What Went Wrong?

Clare and Tom’s estate plan failed because it didn’t account for the unique legal frameworks and tax laws in each country where they held assets:

• One Will Wasn’t Enough:

A single will required sequential probate processes across multiple jurisdictions, meaning the original will had to go through probate in one country before being submitted to the next. This caused significant delays, as each jurisdiction has its own legal requirements and timelines.

• Lack of Local Expertise: They didn’t consult professionals familiar with inheritance laws in each jurisdiction, leading to issues such as Thailand’s refusal of certified copies or Singapore’s strict documentation requirements.

• Domicile Mismanagement: Spending too much time in the UK without understanding its impact on domicile status resulted in a much larger tax liability than anticipated.

The Consequences

The lack of proper international estate planning led to:

• A higher tax bill, with 40% IHT applied to GBP 3.9 million of their estate (GBP 5 million minus GBP 1.1 million exemption). This amounted to approximately GBP 1.56 million in taxes that could have been mitigated or avoided with better planning.

• Significant delays in distributing assets due to probate issues across multiple jurisdictions.

• Additional legal fees incurred to address complications in Thailand and Singapore.

• Stress and frustration for Clare and Tom’s family during an already difficult time.

How This Could Have Been Avoided

Clare and Tom’s situation highlights why international estate planning requires careful attention to detail and professional advice:

1. Separate Wills for Each Jurisdiction: Creating situs wills specific to each country would have allowed probate processes to occur concurrently rather than sequentially, saving significant time and reducing complications with local authorities.

2. Consulting Local Experts: Engaging professionals familiar with inheritance laws in each country could have ensured compliance with local requirements (e.g., Thailand’s need for original documents or Singapore’s strict acceptance criteria).

3. Managing Domicile Status: Understanding UK domicile rules would have helped Clare and Tom avoid being deemed domiciled for IHT purposes. Spending fewer days in the UK or restructuring assets through trusts could have minimized exposure to UK taxes.

4. Regular Reviews: International estate plans should be reviewed regularly to account for changes in personal circumstances or tax laws. A periodic review might have flagged potential issues with domicile or local compliance requirements before they became problems.

Don’t Let This Happen to Your Family

If you hold assets across multiple countries, it’s essential to ensure your estate plan is tailored to meet the legal requirements of each jurisdiction while minimizing taxes and delays for your loved ones. Each country has its own unique inheritance laws, tax systems, and probate procedures, which can create significant complications if not properly addressed. Take a moment to review the checklist provided to ensure your estate plan is up to date and aligned with your needs.

Book a free meeting with me today “Click Here” to discuss your needs and specific requirements if you have assets in more than one country.

Together, we can create an efficient plan that ensures your wishes are honored, avoids unnecessary complications, and saves thousands for your loved ones.