If you decide to make investments abroad, you should consider whether this strategy will change your Bahamian estate plan. Owning assets in more than one country can complicate your estate planning, so make an informed decision.
First, realize that having assets in more than one country can cause practical difficulties. Your estate's representative or executor may need to open probate or administration proceedings in multiple countries or hire professionals in those countries to manage and value property. This can be costly, diminishing your estate's value. In addition, it could take a long time to complete the distribution of the estate.
Many countries have quite different estate planning laws from The Bahamas. For example, The Bahamas has no estate tax or gift tax, whereas other countries do. Those countries may tax your estate based on the value of any estate assets located there. Other countries, such as France, have entirely different inheritance laws from The Bahamas. If you own property there, it may not pass to the recipients you designate in your will.
How to Account for International Investments When Estate Planning
First, you may want to think about placing these investments into a trust, whether now or upon your death. Using a trust may avoid some of the practical and legal issues described above. When the assets are in a trust rather than in your name personally, the trust can continue operating after your death. The trustee continues to manage the assets for the benefit of family or other beneficiaries that you choose.
In addition, you could execute a power of attorney in respect of the international investments. A power of attorney can allow another trusted person to make decisions about those assets in certain circumstances when you cannot do so. You can specify the circumstances in the power of attorney document. Note, however, the power of attorney expires upon your death.
Finally, to account for international investment issues when making your estate plan, speak to a lawyer knowledgeable about cross-border estate planning. If you have an investment advisor or accountant, you may want to consult him or her about the tax impact of investing abroad.
To find out more about estate planning in The Bahamas, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.