Management of movable assets abroad

The management of movable assets located abroad in the context of an international succession raises many complex legal issues. Under Swiss law, the treatment of these assets requires special attention due to the cross-border implications. This issue involves aspects of private international law, taxation and procedure that require specialized expertise. The stakes are high: ensuring the efficient and compliant transfer of international personal property while respecting the wishes of the deceased and the rights of the heirs. Let us examine the fundamental principles and practical challenges that govern this matter in Switzerland.

Legal framework applicable to foreign personal property

The treatment of movable property located abroad in an international succession is governed in Switzerland by the Federal Act on Private International Law (FAPIL). This law defines the rules of jurisdiction and applicable law in inheritance matters when foreign elements are present.

According to Article 86 LDIP, the estate of a person who last habitually resided in Switzerland is in principle subject to Swiss law. However, a testator may choose to subject his estate to his national law by testamentary disposition or inheritance agreement. This possibility of choosing the law offers a certain flexibility in international estate planning.

Specifically for movable property, the principle of unity of the estate prevails in Swiss law. This means that the entire estate, including movable property located abroad, is in principle subject to a single inheritance law. This approach aims to simplify the settlement of the estate by avoiding the fragmentation of the estate.

Nevertheless, there are exceptions to this principle:

• Certain movable property may be subject to specific rules of the country of location (for example, registered vehicles).
• International conventions may provide specific provisions for certain types of property
• Referral may lead to the application of foreign law in certain cases

Determining the law applicable to foreign movable property therefore requires a case-by-case analysis, taking into account the personal situation of the deceased, the nature of the property and any international treaties in force.

Identification and location of movable property abroad

One of the first crucial steps in the processing of foreign movable property is its identification and precise location. This task can be complex, especially when the deceased owned assets in several countries.

Several sources of information can be used to draw up a complete inventory:

• Bank documents and account statements
• Life insurance policies
• Share or bond certificates
• Invoices for the purchase of valuable goods
• Tax returns
• Personal correspondence of the deceased

In some cases, it may be necessary to call on specialized professionals such as probate genealogists or private investigators to find assets whose existence was unknown or uncertain.

Once the assets have been identified, their precise location must be established. For bank accounts, it will be necessary to determine in which country the account-holding institution is located. For tangible assets such as works of art or jewelry, it will be necessary to know where they are physically stored.

The location of the assets is essential because it can have an impact on:

• The law applicable to their transfer
• The formalities to be completed to obtain the disposal of the assets
• The tax treatment of their transfer

It is recommended that a detailed inventory be drawn up of the foreign movable assets, specifying for each one its nature, its estimated value and its location. This document will serve as a basis for the subsequent steps in the settlement of the estate.

The special case of bank accounts abroad

Bank accounts constitute an important category of movable assets often held abroad. Their treatment in terms of inheritance can be tricky due to banking secrecy rules and procedures specific to each country.

In Switzerland, the transfer of foreign bank assets is in principle subject to Swiss inheritance law if the deceased had their last habitual residence in Switzerland. However, foreign banks will apply their own procedures for the release of funds, which may require additional steps.

Foreign banking institutions often require:

• A certificate of inheritance or an affidavit
• A certified copy of the will
• A power of attorney for the heirs
• A tax certificate

These documents will often need to be translated and legalized, which can lengthen the time it takes to settle the estate.

Valuation and declaration of foreign movable property

The precise valuation of movable assets located abroad is a fundamental stage in the inheritance process. It is necessary both to determine the rights of the heirs and to satisfy tax obligations.

Under Swiss law, inheritance assets must be valued at their market value on the day of death. For movable assets abroad, this valuation can be complex due to several factors:

• Exchange rate fluctuations
• Differences in markets between countries
• Possible restrictions on the export of certain goods
• Costs of repatriating assets

For certain types of goods, it may be necessary to call on international valuation experts. This is particularly the case for:

• Works of art
• Jewelry and precious stones
• Valuable collections (stamps, coins, etc.)
• Collector’s vehicles

Once the valuation has been carried out, the foreign movable assets must be declared to the competent authorities. In Switzerland, this declaration is generally made to the tax authority of the canton of the deceased’s last place of residence.

The declaration must include:

• The nature and description of the assets
• Their precise location
• Their estimated value in Swiss francs
• Valuation documents

It is paramount to ensure the accuracy and completeness of this declaration. Any omission or undervaluation could result in tax penalties and complications in the settlement of the estate.

Tax implications of holding movable property abroad

Holding movable property abroad can have significant tax implications, both from the point of view of the deceased’s country of residence and the countries where the property is located.

In Switzerland, inheritance tax is collected at the cantonal level. Each canton has its own inheritance tax rules, but most include foreign movable property in the tax base.

However, to avoid double taxation, tax credit or exemption mechanisms may apply if inheritance tax has already been paid abroad. These mechanisms are provided for either by double taxation agreements or by Swiss domestic law.

It is imperative to verify the tax situation in each country concerned and to anticipate any reporting or payment obligations. Appropriate tax planning can help optimize the overall tax burden of the inheritance.

Procedures for the transfer of foreign movable property

The effective transfer of movable property located abroad often requires specific procedures, which may vary depending on the nature of the property and the countries involved.

For bank accounts, the procedure generally involves

• The production of a certificate of inheritance or a deed of inheritance
• The provision of identity documents for the heirs
• The signing of specific forms for the bank
• Sometimes, obtaining authorization to transfer the funds

For tangible assets such as works of art or jewelry, the following will need to be considered:

• The customs formalities for their export
• Any restrictions on leaving the territory (for cultural assets, for example)
• The practical arrangements for transportation and insurance

In some cases, it may be necessary to obtain a local court decision recognizing the status of heir or validating the will. This procedure, called exequatur, can be lengthy and costly.

It is recommended that the procedures be coordinated between the different countries concerned to avoid contradictions or blockages. A global approach to inheritance, taking into account the specificities of each jurisdiction, makes it possible to optimize the transmission process.

Role of professional intermediaries

The complexity of the procedures for the transfer of foreign movable property often justifies the use of professional intermediaries. These may include:

• Lawyers specializing in private international law
• Notaries with expertise in international successions
• International tax specialists
• Cross-border wealth managers

These professionals can provide significant added value by:

• Coordinating procedures between different countries
• Negotiating with foreign financial institutions
• Ensuring tax compliance of the transfer
• Optimizing the overall strategy for settling the estate

Their involvement can be particularly useful in complex cases involving multiple jurisdictions or high-value assets.

Current challenges and practical solutions

The management of foreign movable assets in international estates raises several challenges that practitioners face today.

One of the main challenges is coordination between the different legal systems. Despite international harmonization efforts, differences in inheritance law remain between countries. These differences can lead to conflicts of laws or situations of legal vacuum.

To overcome this challenge, a proactive approach is recommended:

• Anticipate potential conflicts of laws from the moment of inheritance planning
• Use private international law tools such as choice of applicable law
• Promote coordination between professionals from the different countries concerned

Another major issue is international tax transparency. With the development of the automatic exchange of information between countries, the holding of movable assets abroad has become more visible to the tax authorities. This implies

• Increased vigilance in the declaration of foreign assets
• The need for rigorous and compliant tax planning
• The importance of precise documentation on the origin and value of assets

Practical solutions are emerging to meet these challenges. The use of digital tools for the management and monitoring of international assets is growing. These platforms enable better traceability of assets and facilitate coordination between the various parties involved.

Furthermore, continuous training for legal and tax professionals in the specifics of international successions is becoming essential. A mastery of international conventions, private international law rules and foreign practices is a major asset for effectively managing these complex situations.

In this context, the role of specialized law firms takes on its full importance. Their multidisciplinary expertise and international network enable them to provide tailor-made solutions to issues related to foreign movable property in estates. Their intervention can be decisive in navigating the complexity of international inheritance law and ensuring the optimal transfer of assets.

Ultimately, the management of foreign movable assets in international successions remains a constantly evolving field. Adapting to legislative changes, anticipating tax issues and mastering cross-border procedures are all skills necessary to meet the current challenges of this complex but fascinating area of Swiss law.