An investor with real estate in three countries, a bank account in a fourth, and beneficiaries in two more has an estate that will, without deliberate planning, be subject to the succession laws and inheritance tax regimes of multiple jurisdictions simultaneously. Cross-border estate planning is not a peripheral concern for international investors — it is a core structural challenge that grows in complexity with every additional jurisdiction added to the portfolio.
Why Cross-Border Estates Are Complex
The complexity arises from several layers. First, succession law — the rules about who inherits what — is jurisdiction-specific and may conflict between countries. Several civil law jurisdictions (France, Spain, Portugal, Germany, many Latin American countries) have forced heirship rules that override testamentary freedom, requiring specific portions of an estate to pass to immediate family members regardless of the will. A UK or US testator who leaves property in Spain may find that Spanish forced heirship rules apply to the Spanish property despite a clearly written will.
Second, inheritance tax (or estate tax) varies dramatically by jurisdiction. The UK imposes 40% inheritance tax above the nil-rate band on worldwide assets of UK domiciliaries. The US imposes estate tax on worldwide assets of US persons above the exemption threshold (approximately USD 13.6 million per person in 2024). Many other countries — UAE, Cayman, Georgia, Panama, Belize, Singapore — have no inheritance tax at all.
Third, the probate process — the legal process of validating a will and administering an estate — must typically be conducted in each jurisdiction where assets are held. An estate with property in four countries may require probate proceedings in four courts, potentially requiring four different lawyers, four sets of court fees, and four different timelines.
Trusts as Estate Planning Vehicles
A trust removes assets from the settlor’s personal estate during their lifetime. Assets held in a properly constituted offshore trust are legally owned by the trustee, not the individual. On the settlor’s death, those assets are not part of their probate estate and do not pass under their will — they pass according to the trust deed to the named beneficiaries.
The estate planning benefits of offshore trusts include: avoidance of probate in the trust’s jurisdiction of establishment; potential reduction in estate and inheritance tax (depending on the settlor’s domicile and the trust’s jurisdiction); controlled distribution to beneficiaries (including over time, or subject to conditions); and protection from forced heirship claims in civil law jurisdictions.
The most established offshore trust jurisdictions for international investors are Cayman Islands, Nevis, Cook Islands, New Zealand (for Asia-Pacific investors), and Liechtenstein. Each has a well-developed trust law framework and experienced professional trustee community.
Trust taxation for the settlor depends on domicile. UK-domiciled settlors face UK inheritance tax on assets settled into offshore trusts in most circumstances. US persons face complex grantor trust tax rules. These interactions require specialist advice before any trust is established.
Foundations
A foundation is a civil law vehicle, distinct from a trust, that is more common in civil law jurisdictions and may be more appropriate for investors whose home-country legal framework recognises foundations more readily than trusts. Panama Private Interest Foundations, Liechtenstein Foundations (Anstalt), and Netherlands Foundations (Stichting) are commonly used vehicles.
A Panamanian Private Interest Foundation is a legal entity (not a trust) that holds assets for the benefit of named beneficiaries. The founder can retain significant control during their lifetime and specify distribution instructions in detail. It provides a clean legal separation between the founder and the foundation’s assets, which is useful for both estate planning and asset protection.
Wills and Succession Planning
Regardless of any trust or foundation structure used, all internationally mobile investors should have valid wills in each jurisdiction where they hold assets. A single will may not be effective in all jurisdictions (due to formal validity requirements that differ by country). Multiple jurisdiction-specific wills, coordinated to avoid conflict, are the appropriate approach for investors with assets in multiple countries.
The EU Succession Regulation (EU Regulation 650/2012) allows EU residents to elect the law of their nationality to govern their estate for assets within EU member states. This can be useful for non-EU nationals with EU property who prefer their home-country succession law to apply rather than the potentially more restrictive EU jurisdiction laws.
The most common and costly estate planning mistake: doing nothing. Cross-border estates that pass without a plan are subject to the default succession laws of each jurisdiction, which may conflict, may not reflect the investor’s intentions, and will certainly result in a longer, more expensive administration process than a properly planned estate.
The Bottom Line
Cross-border estate planning is not optional for international investors with assets in multiple jurisdictions. The tools — offshore trusts, foundations, properly drafted wills, and where appropriate, lifetime gifting structures — are well-established and effective. The right combination depends on the investor’s domicile, the jurisdictions where assets are held, the family structure, and the inheritance tax environment. Early planning is materially less expensive and more effective than planning after health events or family changes create urgency.