Do South Africans need an offshore will for their offshore assets?

If you are a South African who owns foreign assets, you may be asking whether you need a foreign will to administer your offshore assets effectively. Whatever the form of your foreign assets – offshore unit trust investments, properties or offshore bank accounts – here are the factors that determine whether or not you need an offshore will.

Where are the foreign assets registered?

Offshore unit trusts or share portfolios which are registered in South Africa generally do not need a foreign will to deal with the assets. However, assets such as immovable property or bank accounts in foreign jurisdictions are subject to the laws of that particular country and in such cases a foreign will should be drawn up to deal specifically with those foreign assets.

What are the laws of the country where the assets are registered? 

South Africans enjoy “freedom of testation” meaning you may leave your assets to whomever you choose. However, in countries such as France and Italy, the principal of forced heirship applies. Forced heirship specifies that certain relatives are entitled to part of the overall assets of your estate. No will can override the laws of the country so this may affect your decision about where to hold your offshore assets.

Does the foreign country recognise a will drawn up in South Africa?

Some countries recognise South African wills but may still need a letter of probate (a court-issued letter of authority) permitting your attorney to deal with the assets registered in the foreign jurisdiction. Other countries may not recognise the standing of a South African will and in that case, if a foreign will does not exist, those foreign assets will then be dealt with according to the laws of intestate succession within that particular country.

When is having an offshore will simply an advantage?

If there are assets registered in foreign jurisdictions that require probate but your local will is sufficient to deal with those assets, a foreign will may still be advantageous simply because it will allow for simultaneous administering of assets (the processes of winding up both the South African and foreign estates can run at the same time). This can save a lot of time, which could potentially also save money.

When is an offshore will an absolute must?

Where individuals own foreign immovable property, foreign registered bank accounts containing substantial amounts or foreign business interests, it is advisable to have a will drafted to deal with those offshore assets.

Drafting a South African will that excludes assets you own directly in foreign jurisdictions and drafting separate wills dealing solely with the assets in those jurisdictions allows you to ensure that your assets in the foreign jurisdiction can be administered correctly. It is important to seek out expert advice as the foreign will should contain the necessary clauses.

Make sure your estate planning is up to date.

Your CERTIFIED FINANCIAL PLANNER® professional can help you navigate the complexities of estate planning as it relates to offshore assets. Be sure to inform them of all your assets, where they are registered and what (if any) existing wills you have in place. This will enable them to evaluate the need for an offshore will to deal with your worldwide assets effectively.

By Michael Maré, CFP® FPSA®
B.Com