Joint foreign bank account

[burunduk]

My wife is from a former Soviet country and is a dual citizen, including being an American. Her father is not an American and wants to ensure she receives a certain amount of cash upon his death, if any is left. The estate/probate laws are not very developed in her home country and he has written a will, but he thinks the will leaves too much to chance and typically means being forced to make payments to many parties to get your inheritance.

They are looking at options and I considered a joint account that has him as the primary account holder. Unfortunately the banking system is also not very developed such that there is no POD rules or a formal joint bank account. There is no taxation on interest income in the home country.

One scenario would be to open the account in my wife's name and he has access to the money until death. I understand that we would need to report the amount of the gift if over X amount and we would need to report the foreign bank account. The problem with this is that he may spend the entire amount of money before he dies. The interest income generated on this account is rather large so this is not an attractive option.

Is anyone aware of a similar situation and a method used to ensure that my wife would not be deemed as the owner of the account and/or the beneficial owner. Once again, local laws in the home county appear to be silent. My wife is going back soon and plans to meet with a lawyer and a bank to see what options are available. I wanted to see if I could ensure she asks the right questions.

Thank you for your consideration of the above.

 

[Michael Myers]

Overseas inheritance

Hi,

Trying to access a right to capital prior to death of a parent is very complex even if it is in the same country - joint assets and family trusts are used to advantage - and these can become a war zone. But your comments state that there is high interest and also the money might be spent - which implies marginal thinking. If there is some draconian law surrounding the probate period your wife should be careful that she doesn't put herself in a bad situation - to untangle a bad situation and attend any hearings could be a disaster. I have had a few clients that make up their own minds as to what is "right " and years later wished they had taken the simpler path when the emotions have had time to balance themselves with time and objectivity kicks in. The local relatives may well go through the deceased's property as soon as they can and ignore any rules of probate so any cash on hand or valuables could be lost. Probably to ensure the most trustworthy executor is put in the will would be one of the best insurances for your wifes share to be properly protected. I would urge this person to be brought to the meeting with the lawyer ( a specialist in deceased estates ) so he/she can be advised exactly of her the duties of an executor and the downside of not acting in the proper manner. Most Executors I have met, being friends of the deceased, have no idea of the legal responsibilities. This could have a wonderrful affect in safeguarding the assets and carrying out the intentions of the deceased. It is not unusual for the deceased to pre record an audio or audio/visual recording of the reasons for his will and his desires with regard to the assets and the particular reasoning used. This can alleviate claims he was not mentally capable etc., - a doctors certificate prior to death to attest to this can also be useful.

Maybe you can ask your OS lawyer if a family trust can be set up where he ( your father that is) can use the monies of the trust at your his own discretion, your father as trustee would give him control, your wife could also be a beneficiary but in reality would not take (could not effectively take if control with father) from the trust until he past. This may well be the simplest solution. IMPORTANT: However need to question if this particular trust with OS beneficiary ( your wife) would be included for probate purposes - the law on notional trusts differs between countries and their state jusrisdictions. The administration of this trust needs to be also questioned so it doesn't fail at any time or can be challanged through lack of documentation - generally a trust will not fail for lack of a trustee, one is subsequently appointed and this can be controlled by the trust deeds. If a local family member becomes the trustee then whatever funds are laft could be absorbed in trustee fees and legal charges.

Good luck I hope I have raised a few issues for your wife to raise.



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[MichaelM123]

Hey. which country is it, as I have lived in most of these countries and might have some ideas.

 

[burunduk]

sorry, I have been away for a few weeks and could not reply. The country is Azerbaijan. Thanks for your message, she spoke to a lawyer via email and basically the will is not going to accomplish too much or in any case it will not accomplish what her father had hoped. Your reply was very helpful in any case and has given her some areas for thought and she still plans to meet with the lawyer.

 

[MichaelM123]

Ah ok. Good luck!