Should I be an executor for a foreign will?

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Should I be an executor for a foreign will?

Post by stochastic » Thu Mar 26, 2020 12:01 am

My 69 year old mother is a widow, lives in my home country and is currently updating her will. I'm her only child, am the sole beneficiary and at the moment I'm named as the executor. I was wondering if being an executor creates complications with the US tax system as I'd be briefly managing a foreign estate? Does this look like a foreign trust with onerous reporting requirement and are there any pitfalls to be avoided here? My mother is happy to go with whatever will be the simplest option. Is this something I should get legal advice about in the US?

When my mother passes away (hopefully not for 20-30 years) it will involve liquidating her assets which include real estate and a self-managed retirement trust. If it's relevant it's about $2-3m at the moment (although in the current market and exchange rate maybe more like 1-2m) and her country has no estate taxes. Thanks for your help.

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Re: Should I be an executor for a foreign will?

Post by jjface » Thu Mar 26, 2020 12:04 am

I don't know but when you are dealing with 2-3m I think you ought to pay for professional advice.

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Re: Should I be an executor for a foreign will?

Post by celia » Thu Mar 26, 2020 12:42 am

Have you visited a US estate planning attorney, for starts? You likely need to find out what happens in BOTH directions:
What if she dies before you?
What if you die before her?

When you make an appointment, tell them this is what you are looking for. Will they be able to help? If not, look elsewhere. If you have trouble finding a lawyer, maybe a consulate would know of one.

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Re: Should I be an executor for a foreign will?

Post by endeavour » Thu Mar 26, 2020 2:19 am

Having just gone through this with my siblings, I recommend getting professional advice.

Our father lived in Canada, so that's where the estate was. (He and our mom were dual Canadian/US citizens; we siblings are all in the US.) It took a few years to settle the estate, even with an attorney and an accountant involved. Distributing the money was also time-consuming. It took a month of haggling with the credit union where the estate account was.

If you're the executor, that means you'll have signature authority over a foreign account. That means you'll have to file an FBAR with the US Treasury if the amount in the account is over $10,000. Penalties are huge, so this can't be ignored. You might also need to file form 8938, Statement of Foreign Financial Assets with your tax return. Based on what you're saying, it also sounds like you'd also have to file form 3520 once you receive the inheritance.

If your mom adds your name to any foreign account prior to her passing, i.e. makes you a co-owner, then you'd also need to file an FBAR.
Last edited by endeavour on Fri Mar 27, 2020 3:52 am, edited 1 time in total.

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Re: Should I be an executor for a foreign will?

Post by whunter3333 » Thu Mar 26, 2020 7:42 am

Currently, an American resident with the potential for being executor for a Canadian's will. Our Canadian legal advice was that this was not a good idea from the Canadian legal perspective.

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Re: Should I be an executor for a foreign will?

Post by Mr. Rumples » Thu Mar 26, 2020 7:51 am

I'd find out of the country/province/jurisdiction imposes restrictions on out of country executors. Even in Virginia, the Commonwealth imposes restrictions on out of state executors including having to have an instate representative. When we lived in CO - the law may have changed - the executor would have to appear in person in court if it the will contested and that could drag on. That would have entailed, either a lot of flying back and forth or a large rental expense on the part of the executor.

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Re: Should I be an executor for a foreign will?

Post by bsteiner » Thu Mar 26, 2020 8:38 am

It depends on the country. Consult with local counsel in that country.

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