Revolutionary Regulations Transforming Inheritance
A person's Last Will and Testament is often regarded as an unalterable legal document, outlining the final wishes of the deceased, with no room for deviation or alteration.
Think again!
While many people believe in the 'set-in-stone' quality of bequests as an essential part of our heritage, culture, and even religion, the Estate Distribution Agreement (EDA) and its new interpretations are changing the way we execute and probate wills. When executed correctly, the EDA can significantly reduce time, costs, bureaucratic hurdles, and conflict among legal heirs.
To grasp the innovative legal aspects of the EDA and its various benefits, let's delve into an illustrative example.
Meet Jacob and Leah Stone, a fictitious yet representative couple, who led fulfilling lives and prospered. In their will they distributed their assets equally among their four children. The Stone Estate included an apartment in Israel, a condo in Boca Raton, and substantial bank accounts both in Israel and the United States.
Their offspring consisted of Reuben, a banker residing in the USA; Dina, a wealthy international entrepreneur; Judah, a humble schoolteacher living in a rented apartment in Israel; and Benjamin, who resided in England.
The family attorney probated the Will, and the late Stones' final wishes were validated by the Israeli court – each child to receive one quarter of every asset. The Real Estate in Israel and Boca Raton was registered in the Land Registry on all four children's names, and the Bank accounts were divided equally among all four children.
Sounds fair, right? But that's where the trouble started.
Judah desired to purchase the apartment in Israel from his siblings. As the apartment was registered in the Land Registry on all of the children's names as stipulated in the will, Judah faced tedious challenges in dissolving the partnership listed in the Tabu with his siblings. His payment to them to buy out their share in the apartment was considered a Tax event, with significant tax consequences. Benjamin, who wished to acquire the Boca Raton condo, faced challenges when the banks declined his funds to purchase the condo from his siblings, citing concerns of potential money laundering. Both banks, in Israel and the USA, required Notarized and Apostilled documents from all the siblings, leading to months of delays and bureaucratic hurdles, and additional bank commissions. Money transfers were complicated and, in some cases, were deemed tax events.
Dina, who decided to help her brothers by waiving her rights to her share in the Estate, was surprised to find that the Israeli authorities did not accept her explanation of granting a gift to her brothers and she was taxed as if she had sold her share of the apartment.
How could these challenges and expenses have been avoided?
All these issues could have been resolved through an Estate Distribution Agreement, whereby the estate is distributed among the heirs equally (based on valuation) or in accordance with the agreement to each individual's specific wishes. In this scenario, Judah would inherit the apartment in Beit Shemesh and the Israeli bank account, Benjamin would take ownership of the Boca Raton condo, Reuben would receive the funds from the US bank account, and the affluent Dina would voluntarily forfeit her rights to the inheritance.
A seamless and swift procedure with no hassles, unnecessary bureaucracy, or tax events.
The Estate Distribution Agreement, guided by proper legal counsel, is a convenient tool to navigate inheritances.
Advocate Judy Rinot, originally from New York, is a graduate of the Hebrew University Law School. She has been practicing law in Israel for over 30 years, specializing in Real-Estate and Inheritance Law.
Judy Rinot Law Office & Notary is a boutique law firm, situated in Raanana, Israel, specializing in all aspects of Real-Estate, Estate Planning, Enduring Power of Attorney and Inheritance Law, with a special emphasis on representing new immigrants, returning residents, and foreign citizens.
Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Website: www.rinot-law.com