With how easy it is to stay connected with the rest of the world, it’s no longer uncommon for people’s finances to span international borders. People can invest in all sorts of assets from foreign real estate to offshore investments.
However, as great as it is to hold these assets, it becomes a problem when the law is involved, such as in probate cases. Different places have their own law, so you have to be careful about how these international assets are managed and distributed after someone passes away.
In this article, we’ll examine what Colorado probate law says about foreign asset cases.
Foreign assets refer to all sorts of holdings located outside the borders of the United States. This could include real estate, bank accounts, business interests, and more. For those with international ties, foreign assets are a common aspect of their estate.
Foreign assets can create complications in the probate process because of the differing laws, tax implications, and such. Identifying and accounting for these assets is necessary for proper estate settlement.
Complications Caused by Foreign Assets
Probate is already quite complex, but foreign assets make it even more so.
Since each country has its own legal framework around property rights and inheritance, you must understand these before distributing these assets. On top of that, there are also complications around tax obligations – both in the country where the asset is and in the United States. These tax issues can also affect the overall value of the estate.
There may also be issues with determining which court has jurisdiction over the assets. This can sometimes lead to conflicts of law.
Managing Foreign Assets for Probate
The first step in dealing with the problem is accurately identifying these assets. Executors, representatives, and legal professionals dealing with the process should first create a comprehensive inventory of the assets. This should include details like their location, type, and value.
It’s best to find a Denver probate lawyer who has dealt with international probate cases to deal with the technicalities involved. Having experience with similar cases, they could better guide you around what to do.
One of the primary challenges in probate cases involving foreign assets is determining which court has jurisdiction over the assets. Since each country has its own legal system, there may be conflicts of laws, and determining what specific rules and principles apply can be tricky.
These usually include differing inheritance laws or asset location vs. residence regulations.
Countries will usually enter international treaties or agreements to deal with these cases. These provide the framework to resolve conflicts and make sure that the legal decisions made in one jurisdiction are recognized and enforced in the other.
They say there are two things certain in life: death and taxes. Unfortunately, both these certainties are at the forefront of the issue in probate cases with offshore assets.
Foreign assets in probate cases come with significant tax implications, and if these are not addressed properly, the issue could easily escalate into something bigger.
Some key considerations to make include:
- Estate tax – Some countries impose taxes on assets within their jurisdiction, regardless of where the owner resides. This could affect the total value of the estate and the taxes to be paid.
- Income tax – Foreign assets that generate income are subject to income tax, both in the country they are located in as well as in the United States.
- Capital gains tax – if foreign assets are sold during probate, capital gains generated are also taxable in both countries.
On top of the taxation, you must also keep the reporting in mind. This is particularly true for financial accounts in other countries. For example, the US Department of the Treasury requires that financial accounts are reported if their total value exceeds a certain threshold. Similarly, the Foreign Account Tax Compliance Act (FATCA) necessitates that foreign financial institutions report any accounts held by US citizens.
It’s important to consider the taxation aspect since this can affect the distribution of assets to heirs and beneficiaries and the total amount of the estate available for distribution.
An experienced estate planning lawyer in Colorado would know what to keep an eye out for, so you don’t have to worry too much about the technicalities.
Probate cases that involve foreign assets can be daunting. You’d be in trouble if you’re not well-versed with international laws and treaties around such cases. Having a legal expert by your side can be the difference between a smooth probate process and a rocky one.
At Bourassa Law Group, we understand that the process can be challenging. Our team of seasoned probate attorneys specializes in handling cases like yours. We can provide the guidance and support you need to get through the probate process easily. Our experience with international probate law gives us the expertise you need.
Don’t let the complexities of probate with foreign assets overwhelm you. Contact us today on our website or call (800)870-8910. We can assist you with the probate process and remove some of the burden.
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