Key Considerations for Estate Planning If You Own Property Abroad

28 November 2025

Let’s be real—owning property in another country is exciting! Whether it’s a cozy villa in Tuscany, a beach house in Costa Rica, or an investment flat in London, it feels like living the dream. But when it comes to estate planning, things can get a bit... complicated.

If you're like most people, you probably don’t think about what happens to your foreign assets if something unexpected happens. That’s totally normal—talking about wills, taxes, and your eventual demise isn’t exactly dinner table conversation. But trust me, it's better to deal with it now than to leave behind a legal mess for your loved ones later.

So let's dive into what you need to know. We’ll break it down step by step (minus the legalese). Sound good?

Why Estate Planning Gets Tricky With Foreign Property

Okay, so here’s the deal: owning overseas property adds layers to your estate planning. Why? Because each country has its own laws about inheritance, taxes, and ownership. What’s totally legal and easy in the U.S. might be a bureaucratic nightmare somewhere else.

Imagine you pass away and your family tries to claim your vacation home in Spain. But wait—Spain has forced heirship rules. Your American will might not cut it. Now your loved ones are stuck dealing with lawyers, translators, and months of paperwork. Not exactly the legacy you had in mind, right?

So yeah, it’s complicated—but not impossible. You just have to plan smart.

1. Understand the Laws in Each Country Where You Own Property

This is your first step and arguably the most crucial.

Each country has its own rules around:

- Who can inherit property
- How taxes are applied
- What foreign wills are recognized
- If there's a need for probate (and what that looks like)

Let’s say you have property in France. France has something called "forced heirship" which means a portion of your estate has to go to your children—even if your will says otherwise. Ignoring that can lead to serious disputes.

Tip: Work with a local attorney familiar with estate laws in that specific country. Don’t rely solely on your estate planner back home.

2. Create a Will That Covers Your Foreign Assets

One-size-fits-all doesn’t work here. You might need more than one will—one for your assets in your home country and another for your foreign property.

But wait—don't just go writing multiple wills all over the place.

Why? Because if they contradict each other, one might accidentally revoke the other. Not good.

Make sure your estate planning attorney coordinates with your foreign legal counsel. That way, your wills complement each other and take into account local laws.

3. Double-Check Treaty Laws Between Countries

Some countries have tax treaties with each other to avoid double taxation. That’s a life-saver.

For example, the U.S. has estate tax treaties with countries like the UK, Canada, Germany, and Japan. These treaties can:

- Prevent your estate from being taxed twice (once by the U.S. and again by the foreign country)
- Offer credits or exemptions
- Help clarify which country has primary tax jurisdiction

If your property is in a country without a treaty, you could be facing double trouble. Literally.

Again, this is where a tax expert comes in handy. One consultation could save your heirs a mountain of stress and money.

4. Know the Tax Implications—Home and Abroad

Taxes are a biggie when it comes to estate planning. The U.S. has its own estate tax system, and other countries have theirs. Sometimes they overlap.

Here’s what you need to look into:

- Estate Taxes: Will your heirs owe tax in the foreign country or in the U.S.—or both?
- Inheritance Taxes: Some countries (like Spain or Japan) tax the recipient, not the estate.
- Capital Gains Tax: If the property is sold, will your heirs owe taxes on the profits?
- Gift Taxes: Planning to transfer the property while you're still alive? That could trigger gift taxes.

Pro tip: There may be ways to structure things—like through trusts—to minimize these taxes.

5. Keep Title Ownership Clear and Updated

This one’s easy to overlook but super important.

How your property is titled will impact how it's passed on. For example:

- Sole ownership? It goes through probate.
- Joint ownership with rights of survivorship? It may automatically go to the co-owner.
- Owned by a trust or business entity? Different rules apply.

Also, if there’s a mortgage or debt attached, make sure your estate plan accounts for how that will be handled. Otherwise, your heirs could be stuck paying unexpected bills.

6. Consider Using an International Trust or Holding Company

If you're really serious about protecting your foreign assets, setting up a trust or holding company might be the way to go.

Benefits?

- More control over how your property is distributed
- Potential tax advantages
- Avoiding probate in some cases

For example, some people create offshore companies to hold real estate, then transfer ownership through shares in the company—not the actual property itself. It’s not for everyone, and it can be complex, but it’s worth exploring.

But be cautious. Some countries are cracking down on offshore holding structures. You need a legit reason—not just tax avoidance.

7. Don’t Forget About Local Heirs’ Rights

Countries like Italy, France, and the Philippines have "forced heirship" laws. These laws limit how freely you can distribute your estate.

Maybe you want to leave everything to your spouse, but the country where your property sits says a chunk must go to your children—even if you’ve been estranged for years. Sadly, there's not always a way around that.

In some cases, choosing the applicable law (like U.S. law if you’re American) in your foreign will might help. But it’s not guaranteed.

That’s why legal advice in both countries is a must.

8. Make Sure Documents Are Translated and Legalized

This might sound small, but it’s huge.

Your loved ones may need to present your will or legal documents in the country where the property is located. If those documents aren’t in the right language or not legally validated (like via apostille or notarization), they might be rejected.

Imagine trying to claim a property with a will that's unreadable to the local court. Yeah, not ideal.

Also, keep duplicates of these documents in both countries—and let someone you trust know where to find them.

9. Update Everything Regularly

Life happens—relationships change, laws evolve, and properties get bought or sold.

Make it a habit to revisit your estate plan every couple of years or after major life changes, especially if you're juggling assets in multiple countries.

Ask yourself:

- Did I buy or sell property?
- Have my beneficiaries changed?
- Did laws in that country get stricter or more lenient?
- Did I get married, divorced, or have more kids?

Keep your plan fresh so you're never caught off-guard.

10. Communicate With Your Heirs

This part is often overlooked but might be the most important.

Talk to your family about your foreign assets. Let them know about:

- What properties exist and where
- Who’s supposed to get what
- Where the important documents are located
- Who the key contacts are (lawyers, accountants, etc.)

The clearer everything is, the fewer arguments and complications there will be when the time comes.

Trust me, this conversation can prevent years of family drama and legal headaches.

Final Thoughts: Protect the Dream

Owning property abroad is a beautiful thing—it’s a piece of the world that you call your own. But don’t let the beauty blind you to the responsibilities.

Estate planning when you have assets in more than one country isn’t impossible. It just takes a bit more effort, a good team, and regular check-ins.

So if you’ve got that dream house in paradise—or are planning to buy one—make sure your family won’t be stuck in a nightmare trying to hold onto it.

Talk to professionals. Keep your documents in order. Keep your loved ones in the loop.

And most of all—plan like a boss.