International Estate Administration
At the Village Law Firm, we assist clients with recovering estate assets no matter where they are located. Cross-border estates can pose complex legal and tax issues, and having counsel experienced in these areas can save you from costly mistakes.
New York Estates with Assets Abroad
When a New York resident passes away owning assets in another country, a foreign court proceeding may be required to gain access to those assets. Depending on the type of asset, a U.S. Will may not be applicable. For example, real estate located in a foreign country is subject to the laws of that country. If the U.S. Will does not comply with the requirements of the foreign jurisdiction, then that country’s inheritance rules will apply as if the deceased passed without a Will. Even if the Will is accepted, it may not be interpreted in the same manner that it would be by a U.S. court.
Our Team is experienced in navigating the rules of foreign jurisdictions and working with local counsel to complete the administration of foreign assets in the most efficient and expeditious manner possible.
Non-U.S. Estates with New York Assets
When a non-U.S. resident passes away owning assets in New York, accessing the New York assets can prove challenging for heirs. We assist in filing the documentation necessary to release the assets so they can be distributed.
The transfer of New York real estate or other assets upon the death of a non-resident owner often requires a process called an ancillary administration, a court proceeding that authorizes the transfer of New York assets upon the death of a non New York resident. The proceeding is “ancillary” to the primary estate administration, which is based in the country where the deceased person resided at the time of his or her death. In addition to real estate, U.S. financial institutions may require that an ancillary administration be conducted before they will release funds held in a bank or brokerage account by a non-U.S. resident. As discussed below, a U.S. financial institution may also require a Transfer Certificate from the I.R.S. before releasing any funds.
Estate Tax Issues for Nonresident Estates
Non-U.S. residents who are not U.S. citizens are subject to harsh estate tax rules, and the I.R.S. makes sure that U.S. assets left by a nonresident do not leave the U.S. without payment of the applicable taxes.
If taxes are owed, a nonresident estate tax return, or Form 706-NA, must be filed with the I.R.S. If the U.S. assets owned by the nonresident are worth more than $60,000, then it is likely that estate taxes will be owed.
Even if no estate taxes are owed, a financial institution may require a Transfer Certificate from the IRS prior to releasing estate funds. A Transfer Certificate certifies that no estate taxes are owed to the federal government by the deceased person. If a financial institution releases funds to the nonresident’s heirs without a Transfer Certificate, the financial institution may find itself on the hook for the estate taxes. For this reason, a U.S. financial institution will rarely release funds owned by a deceased nonresident without this document.
How We Can Help
Located in the heart of New York City, our attorneys are accustomed to navigating complex international estate issues. We can assist with filing an ancillary administration, filing estate tax returns with the I.R.S., and requesting transfer certificates.
To learn more about how our Team can help you navigate the complex issues involved in international estate administration, contact us to schedule a consultation.