In today’s modern world it is increasingly more common to come across individuals who have acquired foreign assets, such as a bank account or shares in a non-UK company, throughout their lifetime. Many may not even be aware that they hold shares in American companies, which is often the result of a corporate buyout or merger after the original purchase of shares. Due to the increase of assets held overseas, Solicitors are often presented with a whirlwind of challenges during the estate administration process due to a lack of expertise in working with these often-complicated overseas jurisdictions. This blog provides an overview of working with overseas assets, grants and reseals, North American shareholdings and tips for best practice.
The challenges of working with assets held in foreign jurisdictions
Selling overseas shares is a longer and much more complicated process than those listed in the UK stock market, due to different processes, time zones and language barriers. It is therefore vital to start the process of selling overseas assets as early as possible once a Grant of Probate or Letters of Administration has been obtained.
Dealing with property held in foreign jurisdictions
We are increasingly seeing more people pass away with an overseas property in places that you would typically expect, such as France, Spain, and Portugal. However, as of recently, we have also seen numbers increase in properties owned in Eastern Europe. Unfortunately, dealing with property creates its own unique issues, as most jurisdictions have their own laws and regulations which can be difficult to navigate.
Selling a property outside of the UK can be an expensive process, and the level of local taxes often come as a surprise to both the Executors and beneficiaries of an estate, especially in popular destinations such as France. It is crucial to remember that when dealing with overseas property, it can take a number of years to resolve from start to finish. Therefore, seeking legal expertise in the relevant jurisdiction is the safest way to ensure the smoothest and quickest resolution possible is achieved, as an application can be rejected even if the smallest detail is submitted incorrectly.
Grants and reseals
It is often necessary to reseal a Grant of Probate or Letters of Administration in an overseas jurisdiction, as typically the Grant of Probate or Letters of Administration in the UK does not give the Executor or Administrator the authority to dispose of the asset outside of the country. As a result of this, a reseal of the grant, or a new grant altogether, may be required depending on the jurisdiction that the asset is held.
Generally, if dealing with a commonwealth country, such as Malaysia or Hong Kong, you will be able to reseal the grant that is already in your possession in the UK. In countries outside of the commonwealth, such as the USA and the islands that surround us, the likes of Jersey, Guernsey, and The Isle of Man, a new grant will be required. It is important to note that grants in the islands that surround us do have graduated probate fees that are dependent on the assets that are held. For example, if your client has a valuable bank account, the court fee will reflect this.
Title Research can help when you require a grant in an overseas jurisdiction through a mixture of in-house work by our asset repatriation specialists and local partners who can make physical applications to the courts. As experts in this field, Solicitors can rest assured that we are always up to date with the latest changes to forms and processes, which allows us to navigate this often-complicated process as quickly and as smoothly as possible.
North American shareholdings
The principal risk when dealing with North American shareholdings is timescales. Unfortunately, dealing with these assets can be expected to take a significantly longer time than those dealt with in the UK. The biggest impact on timescales comes from the need to obtain a Federal Transfer Certificate, which is required when the total value of the assets in the US is more than $60,000. Frustratingly, it can take a minimum of nine months before a response is received from the Internal Revenue Service. For everything you need to know about Federal Transfer Certificates, read our blog here.
It is always advisable to act promptly when presented with overseas shareholdings, particularly those held in the US, as the value of holdings can fluctuate throughout the entire process. It can take up to six months to sell a small to moderate shareholding, which if left to the end of the estate administration process, can cause delay to the final estate accounts and distribution of funds which may leave beneficiaries feeling frustrated.
To make the process of dealing with North American shareholdings even more challenging, Solicitors may experience unhelpful Registrars, shares that may escheat before the sale (the process of when a US account becomes dormant for a period of time specified by state law, typically between three to five years), unconfirmed holdings, and corporate actions, mergers and spin-offs that can make a straightforward shareholding even more complicated than previously feared. These are challenges that Title Research come across every day, allowing Solicitors to free up their valuable work schedule to focus their efforts on other priorities. We commonly deal with the states of North Delaware and New York, however, our knowledge of the required processes means we can assist with shareholdings held anywhere in the US.
Best practice when dealing with overseas assets
Seek help as early as possible - Our team are always on hand to discuss how we can assist you when dealing with overseas assets, and will be able to give you advice on how much it might cost and how long it will take which will allow you to better advise your clients
Advise your clients early that timescales may be protracted – Manage your clients’ expectations from the outset and explain that this is not as simple as the processes in place in the UK. This is particularly the case when dealing with North American shareholdings, but as previously discussed, foreign jurisdictions all have unique laws and regulations that may slow down the process considerably
Instruct a specialist who has experience in managing overseas assets - We see these situations every day and are always happy to discuss examples of how we have helped other Solicitors and their clients in the past
Title Research is an expert in dealing with overseas assets which means we can navigate the often-complex process of selling or transferring shareholdings for you. If you would like to discuss how Title Research can help you administer overseas assets, call our Client Services Team on 0345 87 27 600 or fill in the form below