Estates of Family Outside Of the U.S.: Proceed with Caution!

How do you handle the estate of family members who reside outside the U.S.? Here’s a very brief overview:

The U.S. trust system (revocable and irrevocable trusts) is based on common law, which isn’t universal. Some countries recognize trusts, while others do not, depending on their legal tradition.

 •   Common Law Countries (trusts generally recognized):

 •   Australia – Fully recognizes trusts (revocable and irrevocable) as part of its legal system. Very similar to the U.S. and UK.

 •   UK 🇬🇧(England & Wales, Scotland, Northern Ireland) – The origin of modern trust law; trusts are widely recognized and used.

 •   Ireland – Recognizes trusts, based on common law.

 •   Civil Law Countries (limited or no recognition of trusts unless adapted by treaty or statute):

 •   France 🇫🇷 Does not recognize U.S.-style trusts domestically; instead has the fiducie (introduced in 2007, but more limited). France did sign the Hague Trust Convention but applies it restrictively.

 •   Germany 🇩🇪 No domestic trust law; does not recognize U.S.-style trusts. Courts sometimes enforce foreign trusts under conflict of law principles, but trusts must often be “translated” into local structures like Stiftung (foundations).

 •   Spain 🇪🇸 Does not recognize trusts; Spanish inheritance law is rigid (forced heirship). Trusts may be acknowledged only in international contexts if the trust is governed by foreign law.

 •   Italy 🇮🇹 Does not have native trust law, but recognizes foreign trusts under the Hague Convention (ratified 1992). Popular for estate planning if governed by another jurisdiction’s law.

 •   Switzerland 🇨🇭 Civil law country, no domestic trust, but recognizes foreign trusts under the Hague Trust Convention (ratified 2007). Considering creating its own trust law.

Probate is the court-supervised process for validating wills and administering estates. Requirements vary widely:

 •   Australia 🇦🇺 Probate required for most estates if assets are held solely in the deceased’s name. Trusts (revocable/living) avoid probate, like in the U.S.

 •   UK 🇬🇧 (England & Wales) – Probate usually required unless assets are jointly held or in trust. Thresholds vary by asset value.

 •   France 🇫🇷 Probate (notaire process) required; assets pass under forced heirship. No “avoidance” via trust, but some recognition of foreign trusts.

 •   Germany 🇩🇪 Probate required unless assets pass automatically under survivorship or marital property rules. Trusts generally not used.

 •   Spain 🇪🇸 Probate required; forced heirship rules apply. No avoidance with trusts.

 •   Italy 🇮🇹 Probate required; foreign trusts recognized but subject to Italian succession rules.

 •   Switzerland 🇨🇭 Probate required under civil law succession. Trusts only recognized if foreign.

Always engage professionals, including personal property appraisers!