Inheritance and Division of Property

Inheritance fund. Since 2018 it has been possible to create an inheritance fund: a legal entity established after the testator’s death on the terms of the will, which manages a business or capital for the beneficiaries under rules set in advance, such as how profit is distributed, conditions for heirs and the fund’s term of existence. We assess whether a fund is justified for a particular asset structure and prepare its charter and management terms.

Inheritance agreement. Unlike a will, it is concluded during the testator’s lifetime with a specific heir and may include reciprocal obligations, for example continuing to take part in the business or supporting the testator. Such an agreement is harder to change or terminate unilaterally than a will, which makes it a more predictable instrument where certainty matters to all parties.

Joint will of spouses. It allows spouses to agree in advance on the fate of their shared property in the event of one spouse’s death and reduces the risk of later conflict between the surviving spouse and first-line heirs from previous marriages.

The choice of instrument depends on the make-up of the family, the structure of the assets and whether the business must keep running without any break in management when the inheritance opens.

Applicable law. Movable property is usually governed by the testator’s personal law, that is, the law of the country of nationality or last permanent residence, while real estate is governed by the law of the country where it is situated. As a result, the succession of one and the same person may be governed by the law of several countries at once, and not always with the same outcome for the same heirs.

The compulsory share abroad. In civil law countries such as France, Germany and the UAE, children and spouses have a compulsory share that cannot be fully circumvented by a will, unlike in common law countries, where freedom of testation is wider. We assess this at the planning stage, so that the client’s asset structure is not later adjusted against their will by a court in another jurisdiction.

Trusts and private foundations. For assets in common law jurisdictions and in a number of international financial centres, a trust or private foundation can take property outside the succession process and outside the reach of the compulsory share. In each case we consider whether such a structure is justified or creates more complications than it solves.

Legalisation of documents and currency control. A Russian heir receiving inherited assets from abroad needs foreign documents to be apostilled and, in some cases, must notify the authorities of overseas accounts in line with currency legislation. We support this part of the process to avoid fines for missing notification deadlines.