Estate Planning With Foreign Assets
Are you among the many Canadians who own real estate outside Canada (like a vacation home or a rental property)? If so, there are some important things you should know about when making your Will (including that you might even need a second Will).
The basics of probate
When someone dies, their Will often needs to be probated. Probate is the process through which the court verifies a person’s Last Will and Testament and affirms the executor’s legal authority to act on behalf of the person’s estate.
Usually, an executor can only deal with the deceased’s assets (such as bank accounts, investments, and real estate) once the Will has been probated.
Getting probate in another country
Different countries (and even different provinces within Canada) have their own rules and procedures regarding probate.
Usually, probate is obtained in the place where the deceased person lived. Probate can then be confirmed in other jurisdiction(s) where the deceased owned assets through a process called “resealing” or obtaining an “ancillary appointment.”
For example, if someone lived in Ontario and owned a cottage in Manitoba, their executor would likely probate the Will in Ontario (to deal with the Ontario assets like a home or bank account) and then reseal probate in Manitoba so they can deal with the cottage.
Since estate planning laws are similar from province to province, resealing probate is relatively straightforward when all the deceased’s assets are located in Canada. In cases where they owned assets in a foreign country, a lawyer in that jurisdiction can help with the application to have the Canadian grant of probate resealed in that country. This process is usually more straightforward in countries where the estate laws are similar to Canada’s (e.g., U.S. or U.K.).
When a Canadian Will may not be enough
In some cases, a Canadian Will is not enough to deal with assets located in a foreign country. Here are some examples:
The Canadian Will is not a valid Will in the foreign country because they have different rules regarding the validity of Wills;
There are rules in the other country that restrict a foreign executor from dealing with property located there; or,
There are rules in the other country regarding the inheritance of real estate (e.g., forced heirship), which may take precedence over the Canadian Will.
In cases where foreign property is involved, it is often wise to speak with a lawyer in the foreign jurisdiction to get advice about whether a Canadian Will is sufficient to deal with the foreign property.
If probate from a Canadian court can be resealed in the foreign country, a Canadian Will may be sufficient to deal with both the Canadian and foreign assets.
On the other hand, if the assets in the foreign jurisdiction cannot be dealt with in a Canadian Will, it may be necessary to have two Wills: a Canadian Will to deal with assets in Canada, and a foreign Will to deal with property in the other country.
A final note on multiple Wills
Most Wills contain a “revocation clause”, which is a provision that states that the Will revokes any previous Wills the person had made. But, when someone has multiple Wills dealing with property in different jurisdictions, it is important that both Wills do not contain revocation clauses. If they do, the most recently signed Will would revoke the other one. In cases where multiple Wills are needed, both Wills need to co-exist.
If you prepare a Canadian Will – either with an online platform like Epilogue or with a lawyer – and you own foreign property, you should contact a lawyer in that jurisdiction to determine whether you need a second Will.
Make sure your foreign lawyer has a copy of your Canadian Will so they can:
Advise on whether your Canadian Will is sufficient to deal with your foreign property or whether you need multiple Wills; and,
Make sure that, if you need a foreign Will, the documents they prepare for you do not revoke your existing Canadian Will.
If you already have a Will in a foreign country that deals with foreign assets, an online Will solution may not be right for you. While online Will platforms can work well for people who need a basic Will, they generally do not give people the ability to customize the revocation language in their Will. In these cases, it would be best to speak to a lawyer in your province to have a custom Canadian Will drafted.
