When someone dies owning property or accounts outside the United States, the administration of their estate becomes considerably more complex. Foreign assets often require dual legal processes, specialized tax filings, and careful coordination between jurisdictions.
Without strategic planning, U.S. executors may face delays, increased costs, and legal entanglements both at home and abroad.
At Peabody Law Firm, serving clients throughout Southlake, Westlake, Trophy Club, Colleyville, Keller, and nearby communities, we help families with international holdings navigate cross-border estate matters.
Whether you’re a U.S. citizen living overseas or have foreign real estate, investments, or business interests, this guide provides key considerations to ensure your foreign assets are handled properly in U.S. probate.
Understanding Dual Estate Administration Environments
U.S. probate only governs assets located within domestic borders. Any property owned overseas—such as a vacation home in Spain, bank account in Canada, or business in Australia—must be managed through the legal framework of that country. This often involves opening a foreign probate or succession proceeding in parallel with the U.S. process.
This dual system adds layers of jurisdictional requirements. Executors may need to:
- File a copy of the U.S. probate grant (or equivalent) to prove authority abroad
- Translate documents, such as wills and death certificates, and have them apostilled or legalized
- Engage foreign counsel in the relevant country to open and manage local proceedings
Understanding these requirements early on helps avoid delays and ensures lawful disposition of global assets.
Inventory and Valuation of Foreign Assets
A successful international estate settlement begins with identifying every asset located outside the U.S. The types of foreign assets that typically require attention include:
- Real estate holdings in countries like Mexico, Canada, or Europe
- Offshore bank or investment accounts
- Liquid assets such as cryptocurrency stored abroad
- Ownership stakes in foreign corporations or partnerships
Estimating their fair market value is crucial—not only for U.S. estate tax purposes, but also for notifying foreign authorities and matching local legal thresholds.
Executor Authority: Establishing International Credibility
In many countries, the U.S. executor must be recognized as the legal representative of the deceased. To do this, you’re likely to need:
- A certified copy of your U.S. Letters Testamentary or Letters of Administration
- A lawsuit-equivalent instrument, often translated and apostilled
- Proof of the executor’s identity and legal standing
Getting this recognition allows foreign banking and real estate entities to cooperate—unlocking frozen assets and allowing sales or transfers to proceed.
Taxation: Navigating Dual Obligations
Estates that include foreign property often have double tax exposure: U.S. estate tax and foreign inheritance or exit taxes.
For instance, Germany applies Inheritance Tax on real estate transfers, while Portugal may impose Stamp Duty. Failure to consider these obligations can result in heavy penalties or legal holdings on assets.
To reduce tax burden, it’s common to:
- Leverage foreign estate tax exemptions or credits
- Take advantage of treaties with the U.S. that mitigate double taxation (e.g., with the U.K., France or Canada)
- Structure the disposition through trusts that allow tax optimization across jurisdictions
Working closely with an estate planning attorney and international accountant is crucial for efficient global tax handling.
Streamlining Estate Administration with Trusts
For those anticipating cross-border complexity, living trusts can serve as powerful administrative vehicles. A trust holding foreign assets can:
- Bypass probate entirely in the U.S.
- Allow foreign advisors to follow trustee directives without needing U.S. court intervention
- Provide flexibility for swift and private management of ongoing or income-generating assets
However, trust effectiveness depends on proper funding, uniform drafting, and trustees who understand international coordination.
Bank Compliance and Anti-Money Laundering (AML) Protocols
Since 2008, financial institutions worldwide pay special attention to cross-border estates due to anti-money laundering and counter-terror financing regulation.
Executors dealing with foreign banks may confront:
- Requests for certified passports or birth certificates
- Proof of executor credentials—often through embassy-validated documents
- Additional letters from U.S. attorneys or notaries confirming the estate’s legitimacy
Delays are common if documentation is incomplete or fails to meet strict standards. Mistakes can hinder account access or asset liquidation.
Challenges in Transfer of Title and Succession Rules
Every country has its own procedures for transferring real property after death. Some may require:
- Appraisals by local board-certified valuers
- Declaration forms or filings with land registries
- Minimum residency periods before a foreigner can inherit or repatriate assets
Close coordination with experienced local counsel helps steer the process efficiently. Executors may decide to sell property or simply transfer ownership to beneficiaries once the correct steps are underway.
Transparent Reporting: U.S. and Foreign Tax Filings
U.S. estates must file Form 706 if the estate exceeds exemption limits—but that’s just the start. Executors must also:
- Comply with foreign inheritance tax notices in local jurisdictions
- File any required exit tax or reporting
- Determine if ongoing income from foreign sources requires U.S. compliance, such as through Form 8938 or Form 3520
Reporting transparency protects you from audits and ensures compliance with both the IRS and foreign tax authorities.
Communicating Gains and Distributions with Beneficiaries
Foreign asset administration tends to be slower than U.S. probate. Value fluctuations, legal delays, and compliance issues can impact distribution timing.
Executors should:
- Maintain regular updates with beneficiaries
- Set realistic expectations about how and when foreign assets will be handled
- Provide transparent accounting and foreign jurisdiction expense details
Clear communication reduces conflicts and misunderstanding—especially when inheritances are delayed or diminished.
Final Thoughts: Global Assets, Local Expertise
Handling foreign assets within a U.S. probate case isn’t just a legal matter—it’s an international project that requires meticulous planning, coordination, and transparency. Without informed management, distant property and accounts can become stranded or incur unnecessary debts and fees.
At Peabody Law Firm, we guide families throughout Southlake, Westlake, Trophy Club, Colleyville, Keller, and surrounding areas through cross-border probate matters.
We coordinate with local counsel across multiple jurisdictions and ensure your global legacy is protected and passed on according to your wishes.
Contact Peabody Law Firm today to schedule a consultation and learn how best to prepare for foreign assets in your estate plan—so your legacy moves across borders without putting your heirs through unnecessary hardship.
Legal Disclaimer
This article is intended for educational purposes only and does not constitute legal or financial advice. Probate and estate laws differ by country and U.S. state, and regulations are subject to change. Executors and heirs should consult with qualified, licensed professionals in relevant jurisdictions before acting.