How Do the Heirs of an American Who Passes Away Inherit His/Her Israeli Real Estate Property?

Supposing an American passes away in the United States leaving Israeli real estate property situated in Israel, how will the property be inherited by the heirs? How will the property be located? What will be the applicable law? Is there a difference if the deceased left a written last will and testimony or did not?

A starting point will be that in the United States there is no federal law regulating inheritance issues. Therefore, all the inheritance regulations in the United States are determined by the laws of the concrete state that has jurisdiction to hear the matter. For example, the state in which the last place of residence (domicile) of the deceased was, or the state where his/her assets are located, will be the state with the jurisdiction.

Thus, obviously every case will be examined in accordance with the laws of the relevant state. Nonetheless, in respect to real estate assets that are located in a foreign country (such as Israeli real estate property), a certain general rule is observed. This rule, by and large, states that the property is inherited according to the law of the local jurisdiction in which the property is located. It is worth mentioning that relating to the succession of real estate in a foreign country (such as Israeli real estate property), there is no difference if there is a will or not.

Once more, this general principle reflects the rule applicable in most of the states within the United States with respect to real estate property located outside the specific state where the last residence of the deceased was. This rule is also consistent with the common principles of private international law that govern real estate issues.

In general, the above mentioned principles state that land, or a real estate asset, is exclusively subject to the laws of the country where this specific property is located and where another sovereign is not allowed to intervene. Therefore, all matters related to the ownership and disposition of real estate property are regulated by the local law where the property is located, which alone can determine how the ownership is transferred from one person to another, or how a person can be entitled to or deprived of the right to property.

These general principles include also all the rules that govern the inheritance issues. In conclusion, it appears that a real estate asset located in Israel owned by a resident of the United States will be inherited in accordance with the Israeli Law of Inheritance, 1965. It is interesting that once the above mentioned Israeli Law of Inheritance is applied, it too provides the same solution for this kind of situation.

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