Estate Planning

Establishing a will is not an obligation, whether in Israel, France, or Belgium for that matter. In many cases, the default legal succession is sufficient. For tax, family, or estate reasons, it is worthwhile to plan your estate and the future distribution of the inheritance among children.

1. Succession law: If you do not sign a will, the law will automatically assign your estate to your legal heirs, generally according to the law of your country of residence. Thus, if you live in Israel without a will, your estate will, upon death, be allocated half to your spouse and half to your children in equal shares. If you reside in the European Union (with some exceptions), you may choose between the law of your country of residence or the law of another country of which you hold nationality, for example Israel. Please note, this provision is civil only and not fiscal.

2. The advantages of estate planning at the civil level:If you wish to favor one of your heirs, a child in need, or make a bequest to an association, or leave all of your estate to your spouse for example, it is necessary to make a will. You will thus be able to plan what is wise to give during your lifetime, or upon your death, to whom, and in which country. You will also be able to distribute your assets to avoid joint ownership, or to balance donations already made during your lifetime.

3. The tax consequences: If the laws of succession devolution, wills, and other choices of applicable law only concern the civil distribution of inherited assets, this can have ancillary tax consequences that are important to consider. Thus, if an Israeli resident bequeaths an asset in Israel to an heir who is a French resident, the latter will be subject to inheritance tax, whereas if it is bequeathed to another heir who is an Israeli resident, they will be exempt.

4. The application of foreign legal and tax benefits: It is sometimes advantageous, when you live in one country but own assets in another, to be able to apply the law of one of the countries in the other, under certain conditions. The matter must then be examined from several angles to ensure that an advantage in one country does not become a trap in the other. For example, in certain cases, it is very advantageous to give an asset during one's lifetime to a child with the French usufruct reservation applied in Israel, if you wish to pay the taxes today rather than later, particularly when a significant capital gain in Israel is expected. This depends notably on the age of the donor, but also on the expected taxation in Israel today and in the future. Estate tax arrangements are also possible for assets in Pinui Binui projects.

Our firm specializes in international estate and succession matters.

Yaël Hagege Maruani,

Published for general information purposes only, does not constitute specific legal advice.

Only the original French version shall prevail.