When a person dies owning assets in both South Africa and another country, their estate becomes a cross-border estate. In such cases, the South African executor cannot always administer foreign assets in the same way as assets situated in South Africa.

It is important to understand that a foreign asset is not simply a South African estate asset located elsewhere. Foreign assets may be subject to the laws, procedures, and tax regimes of another jurisdiction. Several factors must therefore be considered, including the situs (legal location of an asset for tax purposes) of the foreign assets, the deceased's residence and nationality, the law governing succession, the terms of the deceased's will, and any potential tax implications.

A clear understanding of the laws governing foreign assets, together with effective coordination between the relevant jurisdictions, can significantly simplify the administration process for both the executor and the beneficiaries.

The South African estate
The deceased estate must still be reported to and administered through the Master of the High Court in South Africa. The executor must identify the deceased's assets and liabilities and administration of the estate in accordance with South African law.

Foreign assets should be identified as early as possible, as they may have South African tax implications. In certain circumstances, South African estate duty may apply to assets situated outside the country. The foreign jurisdiction may also impose its own taxes, potentially resulting in additional tax obligations. Obtaining tax and estate-planning advice early is therefore essential.

What happens to the foreign assets?
Once the executor has identified foreign assets, they must determine how the estate will be administered in the country where those assets are located. There is no single rule that applies across all jurisdictions.

Some countries permit a South African executor to administer foreign assets once their authority has been recognised locally. In many others, however, the Master of the High Court's Letters of Executorship will not be recognised. In these instances, an attorney or local representative may need to be appointed to assist with the administration and transfer of assets to the beneficiaries.

This additional layer of administration can increase costs and delay finalising the estate.

The importance of the Will
A South African will does not automatically mean that foreign assets will be dealt with under South African law. The succession of foreign assets may instead be governed by the laws of the country in which they are situated.

This matters because some jurisdictions recognise forced-heirship rules. These provisions grant certain family members a protected right to inherit a portion of an estate, even where the deceased's will provides otherwise.

Where a person owns substantial foreign assets, it may be advisable to consider a separate foreign will. However, take care to ensure that the South African and foreign wills complement one another and do not unintentionally create conflicts.

Planning ahead
Cross-border estate administration is often more complex, time-consuming, and costly than administering   an estate consisting solely of South African assets. Foreign legal requirements, multiple administrative processes, and differing succession laws can all cause delays if you don't address them in advance.

The best time to address these issues is during the estate-planning process. Proper planning allows for the consideration of the laws of each relevant jurisdiction and the appropriate structuring of the estate. This can mean the difference between a smooth and efficient administration process and a lengthy, costly, and stressful experience for those left behind.



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