Settling an estate in Israel and France
Which law is applicable to an international estate? The place of residence of the legator (testator) determines the applicable law to settle his succession. This refers to the residence of his legatees or the location of his movable property. The place or country of residence refers to the legator’s “life center”. However, estates relating to immovable property are generally settled according to the law of the country in which the property is located. In that case, the place where the legator died doesn’t matter for the purpose of settling the estate. Two example cases are provided below for clarification purposes:
– FIRST CASE: SUCCESSION IN THE ABSENCE OF TESTAMENT
In the absence of a will, Israeli law provides for the distribution of inheritance to the legator’s surviving family members. The proportion of inheritance is determined by the degree of kinship. In simple cases, half the legator’s estate is allocated to the surviving spouse, while the other half is divided equally between the children. In the absence of a spouse and / or children, there are several possibilities, determined on a case-by-case basis.
– SECOND CASE: SUCCESSION IN THE PRESENCE OF A TESTAMENT
Israeli law allows the testator to arrange the distribution of his property as they see fit. They must draft a will, valid according to Israeli law, that includes the mention of all property in the estate. To ensure the will is valid and difficult to contest, it is recommended to contact a lawyer specializing in inheritance law to help you draft the testament.
There are different forms of wills in Israel, the main ones being :
- A handwritten document written, dated and signed by the hand of the testator, in the presence of two witnesses
- An oral vow expressed in exceptional conditions (as the legator is on his death bed), in front of two witnesses
- A document drafted, signed and certified in the presence of witnesses not related to the testator and not interested in the estate or before a lawyer or notary who confirms the testament reflects the free will of the legator.
How to ensure your will is valid in Israel?
For a will to be valid, the legator must be mentally competent (sane) and drafting the testament of his own free will. The testament, witnesses, and any certifying authority ensure the testament was free of undue pressure or coercion. This is the best way to ensure that the will is not contested / subject to family dispute. It is strongly recommended that you register your will in the Estates Registry. Keep a copy of the will in a secure place, the location of which is known to a trusted third party.
The freedom to bequeath your estate:
In Israel, contrary to French law, the principle of hereditary reserve does not exist. Each individual therefore has the option of writing a will and bequeathing all of their property in the manner they like. The law in no way limits the will of an Israeli testator with regard to the disposal of his property. In particular, the spouse or the children are not entitled to any part of the estate other than that mentioned in the testament and can thus be disinherited. Israeli law allows “reciprocal wills“, equivalent to donations to the surviving spouse – which may also provide for succession by the children after both spouses depart. This arrangement is best able to protect the interests of the surviving spouse.
How to receive the estate bequeathed in a will?
In order to carry out the succession, the legatees must have recourse to a lawyer to apply to the competent authority, such as the registry of the estates, the family court or the rabbinical court.The legatees will have to provide the will and proof of ownership of the property by the legator. It is only after the issuance of the “estate devolution” or “probate” order, within a period between three months and one year, that the property may be distributed, with the help of the attorney. The latter must contact the various authorities involved, such as the banks, land registry, etc. The assets can then be shared or sold in order to divide the property according to the described proportions. In case of disagreement between the legatees, it will be necessary to resort to a particular sharing procedure.
Taxation of inheritance in Israel
In Israel, estates are totally exempt from taxes, irrespective of the situation of the legatees in relation to the legator. The situation is complicated if the legator or legatees are not Israeli tax residents and / or if some of the bequeathed property is outside Israel. If the legator is, for example, a French resident, the French inheritance tax will apply. If the legatee and the legatees are Israeli residents, the French inheritance tax will apply for property located in France but also for property located in Israel. In complex cases where not everyone drafting / inhering based on the will are Israeli residents, and / or if certain bequeathed property is not located in Israel, it is advisable to consult legal and tax specialists in the countries concerned. Thus, to guarantee the protection of one’s spouse or the distribution of one’s property according to particular criteria, it is strongly recommended to draw up a will.
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