The Singapore Law Gazette

Estate Administration of Expatriates with Multi-jurisdictional Assets

Bridging Civil and Common Law

Expatriates own assets in multiple countries. When they pass away, their multi-jurisdictional estates must be administered and distributed. This article shows how the administrator and the heirs can take control of the assets when the deceased leaves behind assets in Singapore and civil law countries like Switzerland.

Singapore is one of the most livable locations for expatriates coming from European civil law countries. Living in Singapore as an expatriate brings endless opportunities and benefits, but a relocation to a new country also results in being subject to a different jurisdiction with different laws. As life sometimes takes unexpected turns, a death can cause massive difficulties for the bereaved in administrating the multinational estate. How can the administrator and the heirs obtain access to the assets situated in both common and civil law countries? What are the differences in estate administration? How can these issues be addressed?

Let us look at the following simple case study: a married Singapore based expatriate of Swiss nationality dies intestate, i.e., without leaving a will. He owned financial assets in Singapore, a chalet in the Swiss Alps and real estate in several European civil law jurisdictions.¹Each case must be assessed individually, depending on the nationality/nationalities of the expatriates, the location of the assets as well as the type of the assets they owned (immovables or movables). All assets belonged solely to him. The wife would like to access the estate.

1. Release of the Estate Assets

Estates must be administered and distributed in accordance with the applicable law. In Singapore and other common law countries, a grant of letters of administration is typically required for the administrator to be able to take control of the assets, to administer the estate and finally to distribute the assets under the intestacy law.

In contrast, in civil law countries, no administrator is required to distribute the assets to the beneficiaries. The heirs directly administer and distribute the assets amongst themselves under the intestacy law. They must obtain a legitimation document to identify themselves with third parties for accessing the estate. While we will look at this in more detail later, it is obvious that, if the expatriate left behind multi-jurisdictional assets the administrator must apply for a (fresh or resealing) grant in common law countries where the assets are situated and, provided she is an heir (which we take as given, because the wife generally is an heir pursuant to most civil laws), for succession legitimation documents in the civil law countries having jurisdiction to rule on the estate.

Because the expatriate’s place of death was in Singapore, we advised the wife how to access the financial assets in Singapore. We must establish the expatriate’s domicile which will tell us not only the applicable succession law, but also whether an extracted grant may be recognised in the civil law countries where the immovable assets are located.

a) Domicile

Every individual must be connected with a particular legal system. Under common law, a person’s nationality or tax residence alone is not conclusive of the domicile. A person will be affixed with the domicile of origin on birth, which would be that of his father’s if he is legitimate and born within the father’s lifetime, or the mother’s domicile if he were illegitimate or born after his father’s death. The domicile of origin prevails until a person acquires a new domicile of choice or dependence.²See Peter Rogers May v Pinder Lillian Gek Lian (2009) 3 SLR(R) 765, at (16). A person may acquire a domicile of choice by fixing his principal residence in a new country with the intention of residing there for a period not limited in time.³See King v Foxwell (1876) 3 Ch. D 518, at (520). If a person’s residence in a country was not freely chosen (e.g., if it were dictated by an external necessity such as the duties of office) then the person may not have acquired a domicile of choice in that country.

In contrast, under Swiss conflict of law rules,⁴Art. 20 of the Swiss Federal Act on Private International Law (“PILA”). the domicile of a person is in the state where they reside with the intent of establishing permanent residence. No person may have more than one domicile at the same time. If an individual does not have a domicile anywhere, the habitual residence is the relevant place. The habitual residence is in the state where they live for a certain period of time, even if this period is of limited duration. Likewise, the habitual residence is the connecting factor from an EU legislation perspective,⁵Art. 4 and 21 of the Regulation EU No 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and the creation of a European Certificate of Succession. albeit the EU and Swiss definitions are not fully congruent. As per EU law, the concept of habitual residence has been interpreted as meaning the place where the individual has established, and intends to maintain, the permanent or habitual center of their interests.⁶See, inter alia, CJEU, 22.12.2010, Rs. C-497/10, PPU-Mercredi, Slg. 2010 I-14309, N 51.

You can see that the definitions of domicile and habitual residence differentiate as per the involved conflict of law principles. Depending on the specific circumstances at hand, the expatriate may be declared to be domiciled in Singapore or in Switzerland only or in any other country where he has lived prior to relocating to Singapore, or in Singapore and Switzerland concurrently.

Therefore, when establishing the expatriate’s domicile, it is important to collaborate with a foreign lawyer of the involved jurisdictions. In the best case, all involved jurisdictions declare the expatriate to be domiciled in one and the same country. If that is not the case, we will see that such a conflict of domiciles may lead to the necessity of initiating (fresh) probate proceedings in several countries.

b) Grant for Letters of Administration

In order have the Singapore located financial assets of the Singapore deceased expatriate released, the wife needs to initiate a probate procedure in Singapore. Because the expatriate has not left a valid will, a grant of letters of administration is required and in the application the Court may require an affidavit to establish the expatriate’s domicile. For this affidavit, a qualified foreign lawyer with cross-border expertise should be mandated.

If the expatriate was domiciled in Singapore, the Schedule of Assets will include all assets of the deceased, including the overseas assets. For expatriates who were domiciled overseas, the Schedule of Assets will only include the Singapore assets. Hence, the assets must be identified. Frequently, expatriates have nuptial agreements in place whose recognition and its implications on the assets encompassed must be examined. Even though an asset may belong to the expatriate in his sole name, it may not belong to him under the applicable matrimonial regime, or the surviving wife may have a monetary claim to its (partial) value. A prudent advisor involves a cross-border experienced colleague of the respective jurisdiction to determine the assets.⁷In case of a demise of a married spouse, the authorities and courts having jurisdiction over the estate division also accept jurisdiction of the preceding division of the matrimonial goods.

Additionally, the common law doctrine of joint tenancy may not be known under civil law, e.g., under Swiss law. There are similar concepts, but such arrangements may be subject to the forced heirship rules.

As the procedure for the grant of letters of administration is more complex and time-consuming than to extract a grant of probate, a prudent advisor will recommend the expatriate to establish a will for the assets situated in Singapore and to appoint an executor.

c) Recognition of the Grant

In a next step, the wife would like to access the chalet in the Swiss Alps. Will the Singapore grant be recognised in Switzerland, or will she need to initiate fresh probate proceedings?

The conflict of law rules of the state where the immovables are located provide for the recognition prerequisites.⁸Please note that this essay covers the case study only. The Swiss authorities recognise a grant if it was extracted in the state of the expatriate’s last domicile.⁹Art. 96 of the Swiss Federal Act on Private International Law (“PILA”). Hence, if the expatriate’s domicile was in Singapore from a Swiss conflict of law rules point of view as outlined above,¹⁰See section 1a) above. a grant is recognised. The wife will not need to initiate a fresh Swiss probate proceedings to have the chalet registered under her name. Whether a formal exequatur (“resealing”) procedure for the grant is mandatory or recommended, however, must be examined for each case separately.

If the expatriate was Swiss domiciled from a Swiss conflict of law rules perspective, the grant is not recognised. The wife needs to initiate fresh Swiss probate proceedings and the Swiss authorities principally have jurisdiction to rule on the expatriate’s global estate.¹¹Art. 86 PILA. We must bear in mind, however, that the expatriate also owned real estate in other European civil law countries. The courts or authorities of an EU Member State may also claim jurisdiction to rule on the global estate at the place of the expatriate’s habitual residence at the time of death or over the real estate situated in the Member State when he had the citizenship of the Member State or has moved to Singapore less than five years ago.¹²Art. 10 of the Regulation EU No 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and the creation of a European Certificate of Succession. Hence, if France claims exclusive jurisdiction to rule on the real estate situated in France, a Singapore grant with respect to the French real estate is not recognised by the Swiss courts, but a French grant only.¹³Art. 96(2) PILA.

From a civil law perspective, a grant is generally recognised when the issuing country has jurisdiction to issue the grant, or the succession legitimation documents. As the question of jurisdiction is closely connected to the question of the recognition of the grant, both issues need to be assessed. A state does not per se have jurisdiction because real estate is situated in its state. On the contrary, it is very likely that a state claims jurisdiction to rule on the global estate, but another state concurrently claims exclusive jurisdiction to rule on the real estate situated in its own country. Moreover, the jurisdiction of one country may be subject to a prior decline of another state’s jurisdiction. Hence, multiple countries may affirm jurisdiction over the same assets or the global estate as per their conflict of law rules. Due to these conflicts of jurisdiction, a prudent advisor collaborates with a civil law lawyer of all countries involved. If a grant is recognised in the involved civil law jurisdictions, an expatriate may establish one global will with an express choice of jurisdiction. If a choice of jurisdiction is not possible as per the applicable conflict of laws principles, multiple wills may be established to initiate parallel probate proceedings. If parallel proceedings are not possible, subsequent probate proceedings may be initiated either with the global will or with the respective country will. The advice arguably also depends on how fast the estate must be accessed and, on the costs involved in the multiple proceedings.

d) Fresh Probate Proceedings

The probate proceedings to be initiated in the civil law countries vary from state to state. In Switzerland, the heirs can request the issuance of a “Certificate of Heirs” from the probate authority which legitimates them vis à vis third parties (e.g., banks, real estate registrars, etc.) to access the estate and to register the properties in their names. The Certificate does not definitively decide on the qualification as an heir, however, as individuals with a better right may still lodge an action to void the will or claim the inheritance.¹⁴Art. 519 of the Swiss Civil Code (“SCC”) and Art. 598 SCC.

2. Administration of the Estate

In Switzerland, an administrator is not mandatory because the estate vests in its entirety (including all assets and liabilities of the deceased) by operation of law in the heirs upon the expatriate’s death.¹⁵Art. 560 SCC. All heirs become joint owners of the worldwide estate and must administer it jointly.¹⁶Art. 602 SCC. Nonetheless, it is – as in common law countries – highly advisable in a multi-jurisdictional estate to appoint executors in the involved civil law jurisdictions.

3. Entitlement and Succession to the Estate

Eventually, the estate must be distributed to the beneficiaries or divided amongst the heirs. The applicable succession law determines who inherits the estate. It also provides for a recognition of common law trusts. For example, trusts are recognised in Switzerland and France, but not in Sweden and other European civil law countries.

Under Singapore law, if the expatriate was domiciled in Singapore, Singapore law applies to his worldwide estate. If he was domiciled abroad and died without a will, the distribution of moveable property is regulated by the law of the domicile at the time of his death, the distribution of the real estate is governed by the law of situs (lex situs). An affidavit of law explaining the foreign inheritance law must be filed by a lawyer in the country of domicile when the wife applies for a grant of letters of administration in Singapore.

Conflict of law principles in civil law countries may provide for different rules. If the expatriate’s domicile was in Singapore from a Swiss conflict of law rules point of view, the application of the Singapore succession law is recognised. However, if the expatriate was Swiss domiciled from a Swiss conflict of law rules perspective, Swiss succession law applies.¹⁷Art. 90 PILA. Additionally, not the law of the Member State applies to immovables in the EU member state but the law of the expatriate’s habitual residence (“renvoi”).¹⁸Art. 21 of the Regulation EU No 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and the creation of a European Certificate of Succession.

These conflicts are of particular importance, because in common law jurisdictions such as Singapore the testamentary freedom applies. The testators may leave their estate to whomever they wish. In contrast, in most civil law countries, forced heirship rules apply. The rules provide that a portion of the testator’s estate must go to specific beneficiaries, most commonly to the surviving spouse and the descendants. This may not cause a problem as long as the ISA provides for the same rules for distribution as the Swiss Civil Code (e.g., if an intestate dies leaving a surviving spouse and issue, the spouse shall be entitled to one-half of the estate which is congruent with the Swiss statutory rules.)¹⁹S.7 ISA and Art. 462(1) SCC. However, when an expatriates bequeaths three-quarters of his estate to a charity foundation under the assumption that Singapore succession law applies to his estate, but Swiss succession law applies from a Swiss conflict of law rules perspective,²⁰E.g., because he was Swiss domiciled or because the Swiss courts have jurisdiction to rule on the ASwiss citizen’s estate pursuant to Art. 91(2) PILA. the wife’s compulsory share is infringed and she can challenge the will in court.

Hence, a prudent advisor assesses the question of the applicable law thoroughly at the time when the expatriate establishes his will. In order to avoid conflict of laws, the expatriate is generally advised to make an express choice of law, if possible under the applicable conflict of laws rules.

Conclusion

In multi-jurisdictional estates, conflicts of jurisdiction and applicable succession law arise. Advisors need to work closely with cross-border experienced lawyers from the jurisdictions involved when advising expatriates. They can help them to obtain a tailor-made global will or multiple wills which help to minimise the risk of unexpected and controversy results in relation to the estate administration and distribution. A conscious decision for or against a venue of jurisdiction and choice of law as well as the harmonization of nuptial agreements with the will(s) are strongly recommended.