Photo from the archive of «Zagranitsa»
Lawyers of the specialized law office «Inyurkollegia» Tatyana MIKHAILOVA, Irina PANOVA and Viktor BARINOV told the correspondent of «Inostranets» where foreign inheritance comes from, how and what to do with it, how to behave and what to think about in connection with inheritance issues.
Where do people get inheritance?
From the most unexpected sources. It happens, of course, that a person knows exactly which of his relatives lives where, keeps in touch, and at some point that connection breaks off, so to speak, in a natural way. At «Inyurkollegia», the most specialized law firm, all cases are divided into two categories: one - when the person himself comes and says: «My relative has died, how can I get the inheritance?», and the second - when a request comes from foreign lawyers: a person has died, no relatives in direct sight remain, there is information that relatives may exist in your country.
Inheritance can open even if you never suspected such a possibility: a very distant relative, the third grandson of a great-grandfather's second cousin who emigrated before the revolution, may turn out to be the last in some American branch of your family. You never even heard of that branch... Or dramatic but quite real stories with roots in World War II: a death notice arrived, but the man survived, ended up in a concentration camp, and from there, to avoid Siberia, went to America... Or simply a man crossed the front line and lived to a ripe old age somewhere in Weimar.
Any relatives can claim the inheritance. In our country, until recently, only close relatives had the right to inherit from the deceased, while in most countries the main thing is to have provable kinship.
What is the testator's name?
Viktor Barinov says that lawyers don't even always know who died. For example, John Black died, and then he turns out to be Ivan Vasilyevich Chernov. Lawyers often receive very meager information: an inheritance has been opened from a possible native of Russia - and that's all.
- We worked on one case for eight years, - Barinov recounts. - A man fled to Germany during the war, lived there under a different surname, left an inheritance. The inheritance was under the surname, say, Golyshev. And we were looking for the Golyshevs - but it turned out that he was Golikov, he just slightly altered his surname so as not to put his family at risk.
People often get very frightened when they are found in such cases. The relatives of Golikov-Golyshev were just as frightened, although this happened last year. They suspected, of course, that something of the sort had happened, but they were very afraid and didn't want to say anything. It is especially difficult with those people who ended up abroad during the war. Someone crossed the border, someone was taken prisoner and then ended up in the USA or Canada, and what they told there, how they introduced themselves to immigration services - you can't make heads or tails of it. They themselves disguised themselves, and immigration officers recorded foreign surnames any which way, because they didn't think then that someday someone would have to leave an inheritance...
Where is this inheritance, and under which law should it be accepted?
Where to look for the inheritance? The testator did not always bother during his lifetime to compile a list of the inherited property. It may be scattered across different countries and take various forms - money (cash or a bank account), businesses, real estate. How are matters resolved in these cases?
Lawyer Irina Panova says that the general principles of international law come into play here. Real estate is always inherited according to the law of the country where it is located, and movable property according to the law of the country where the testator had his last place of residence. The most difficult thing is to deal with the inheritance of bank deposits that our citizens open abroad. As a rule, these citizens work with foreign companies; they may even live abroad, for example, having obtained a residence permit there, but they remain citizens of their own country. And here conflicting situations arise between the legislation of the homeland and that of the state where the deposit remains. They are resolved in different ways.
What to do if someone somewhere is yours - or was?
So, what should you do if you learn that one of your relatives has died abroad? Or did not die, but simply stopped sending news? The most rational path is to act through a professional lawyer, in particular through the lawyers of «Inyurkollegia» (in Ukraine - «Ukrinyurkollegia». - Ed. note). Up until the 1990s, this was the only institution that had the right to handle inheritance cases. Over almost seventy years of work, a huge card index has been compiled here, so when a person comes and says: «My mother saw an ad in a newspaper twenty years ago, but was afraid and didn't go. Can I get the inheritance now?» - he does not get a straightforward «no» answer. Such cases are resolved, we repeat, in different ways, but first of all the current status of the inheritance and its size are determined. No one will bother for small sums: hourly rates of foreign lawyers are very high, and a contingency fee (that is, a fee set as a percentage of a won inheritance case or as a fixed sum) will not be interesting enough in these cases, so small inheritances are lost.
And in the past, all sorts of things happened. Viktor Barinov recounts:
- I came across documents from the thirties: one of our citizens had emigrated to the States before the revolution. He took four sons with him, and the fifth stayed in the USSR - because he was about to get married, and the bride's parents categorically forbade her to leave for the USA. Well, that brother stayed. In 1934 news arrived that his father had died and left him an inheritance by will - $ 520, not so little for those times. And he received it here. By the way, no one arrested him, and he is still alive and well. He later corresponded with one of the brothers and found out that the others were offended with him: why did father leave everything to him? And he explained: well, I live here, we are building communism, a Soviet person needs this money more than an American...
Why might you not receive an inheritance?
For various reasons. First of all, because there will be heirs closer than you. If they exist, distant heirs are automatically cut off. This is common practice in all countries. True, as Tatyana Mikhailova told us, there is inheritance by right of representation: for example, a potential heir died later than the testator but did not manage to receive the inheritance. You are ready to take on the burden of the inheritance. But then those same heirs by right of representation appear on the horizon. Lawyers will begin to sort it out: perhaps these children will turn out to be closer relatives to the original deceased than you.
During the examination of an inheritance case, the entire genealogy from a common ancestor is reconstructed. And if lawyers cannot find someone, then in France, for example, a judicial administrator is appointed to the vacant share of the inheritance, and he represents the interests of the absent heir until he turns up, while the remaining share is distributed among the present heirs.
In general, different countries deal differently with an heir who should exist but cannot be found. In the United States, an insurance company policy is issued for the share of such an absentee, a certain amount from the inheritance is withheld, and over a number of years (from 5 to 30, depending on the state), if the heir himself or even the heirs of that heir show up, they can claim that share. If no one is found, the share, alas, goes to state revenue, and from that moment, if you show up late, you will have to go to court against the state and prove that your late appearance was justified. If you prove it, they will return it even from the state treasury.
There are no other obstacles to receiving an inheritance - even if you unexpectedly turn out to be the owner of a priceless Rubens, it will be handed over to you without hindrance, since possession is legal, and they will not say that the Rubens is an American or Greek national treasure. Private property is a sacred cow: you bought it - so you can do whatever you want, including bequeathing that Rubens to a relative. (Another thing is that if you, in turn, decide to die and bequeath the painting to your foreign granddaughter, we would not give even an expired travel pass for the happy fate of that Rubens.) Lawyers from "Inyurkollegia" said they had many cases where our citizens inherited masterpieces - although they often later transferred them to museums - some voluntarily, some not so much.
True, when a person dies, valuable things may simply be stolen from his house: there are plenty of people who want to profit from items that are not well guarded. But if the valuables were entered into the estate inventory, then there is a real chance to get them.
Switzerland and Germany close by? In inheritance cases, these are two poles
Lawyers like cases from Switzerland the least. The legislation there is very heavy. It is structured to protect primarily the interests of local banks, according to Irina Panova. It is very difficult to convince Swiss courts that an inheritance should be issued to a particular person - even despite the fact that they are now running a campaign to open accounts that were left unclaimed.
- There was this case, - Panova says, - a man went from Ussuriysk to the Civil War and disappeared. Then, as it turned out, he died in Europe. He had a son. We obtained birth certificates of these two people - the older and the younger. It is absolutely obvious that there aren't two full namesakes in Ussuriysk with the same date of birth. But the Swiss demand: prove that, first, one is the son of the other; second, that the testator had no other family; and they also ask why no contact was kept with the testator?
Or another example. A family got a certificate that a man had died in a concentration camp. Again they demand: prove that he had no other family. Interesting people, the Swiss: they think that in concentration camps people only got married. By setting such conditions, the Swiss simply want to keep the testators' money in their banks. How can one demand, for example, proof of communication? In the thirties, forties, even fifties in our country it was dangerous to maintain ties with foreign relatives...
But in Germany, the approach to documents is completely different. Proving to the Germans that this person is a relative of that one is much easier than to the Swiss or even Americans. They can even be pressured: as soon as it comes to archives burned during the war, they immediately become understanding. "Where are your documents of kinship?" - "You burned them yourselves!" - and the issue is resolved.
Limitation period
How many years can an inheritance wait for a person? A year, two, five, ten, or, as with us, if you don't claim it within six months, you're out? It turns out that in Europe the period for accepting an inheritance is 30 years. Such a long period is the general norm where legal systems are based on Roman law.
In the USA, each state has its own legislation. The minimum term (5 years) is set in California, in most states it is from 10 to 20 years, and a few states use the maximum of 30. In Canada too, terms vary depending on the province. Of course, the term can be extended by court, but there must be grounds for that.
However, regardless of the terms, the more time passes from the day the inheritance is opened, the harder it is to obtain it. If no one has claimed the inheritance, it passes under the management of specially authorized bodies.
Real estate will not wait
Long periods allowed for entering into inheritance are, of course, good, but they do not mean you should wait until the last moment. If a foreign inheritance falls to you in the form of a house, hurry. Houses without care quickly fall into disrepair; they may be occupied by homeless people or even taken away by the municipality - so that abandoned property does not spoil the look and does not create discomfort for others.
Irina Panova told how she went to France with clients. The testator had a small house there, and the heirs had grand plans for that house. When they arrived, it turned out the house was completely ransacked by homeless people, and the neglect prevented neighbors from living normally, so the question of selling the house had already arisen.
If your testator rented out the house, keep in mind that in some countries the tenant has a preferential right to buy even ahead of the heir! Besides, the heir, to occupy the premises, must pay inheritance tax. While the heirs are deliberating, the house may be sold to the tenant, and at practically the price the tenant is willing to pay: the municipality's main concern is that the house quickly finds an owner who starts painting facades, tending the plot and paying taxes.
In France, as Irina Panova said, there is a domains administration service that monitors abandoned property. When such property falls into its tenacious hands, it is worse than trying to snatch it out of there. You have to present the entire genealogy in documented form up to the common ancestor. Often these services do not even accept court decisions, but require a civil registry certificate of kinship, which cannot always be obtained if the common ancestor lived long ago and the archives have not survived.
Therefore, if the inheritance includes real estate abroad, it is better not to delay resolving the inheritance issue, otherwise you will have to deal with various bodies that are more troublesome to work with than courts.
Who decides that the heir is you?
If you have decided that the deceased Mr. N. is your second cousin, that may be enough to shed a tear and drink to his memory, but not at all enough to receive the inheritance left after him. Whether you deserve to be called a relative of Mr. N. will be decided by a court - and the court of the country (state, province, land, etc.) where the said N. spent his last years.
Unlike our state, almost everywhere obtaining an inheritance is a judicial procedure. Even if there is no conflict and everything seems clear, it is not a notary who decides this. Therefore, the most rational way out of the situation is to entrust the resolution of the issue to a foreign lawyer who is familiar with both the language and the procedural intricacies of the country. Of course, you will have to issue a power of attorney to conduct the case.
Then the work begins, each time anew, from scratch, that is, with the genealogy. Lawyers dig up everything they can, find birth records of the mother, father, or even go further up the line. Brothers and sisters of the mother or father emerge from oblivion, the search starts along those branches; if someone is found, that is already good. If there is evidence of kinship, you can claim the inheritance. Lawyers send documents to their foreign partners, and they start a court case.
When it is impossible to gather the entire necessary chain of evidence of kinship, it can be restored again through the court. Lawyers look for indirect evidence, collect witness testimony (the civil procedure allows this, otherwise half of inheritance cases would fall apart). You must recall and provide the lawyers with any information about the testator, the nature and frequency of ties with him, his place of residence and occupation, when he died, who informed you of his death. More information means more opportunities to establish family ties and, therefore, more chances to receive the inheritance.
About birds, pussycats, and crazy old ladies
What if your aunt took and left all her property - factories and plants, land, bank accounts, and diamonds - to her bulldog?
There is nothing you can do here, as they say, dead is dead. Such a will is practically impossible to contest; there are no grounds for that. How can that be, the deprived relatives resent, it is obvious - the person was senile: nothing to their own relatives, but to a slobbering bulldog - a palace and a maid in a cap? Yes, if there is a will, that is exactly how it will be.
You can, of course, start a will contest procedure, but in that case the option of lawyer work with a contingency fee will not work; lawyers will work under the usual scheme with hourly payment. And the basis for hope, that is, for attempting to contest such a will, is only one: you can try to prove that for several years you were fully supported by the testator, lived like that bulldog on his money. If that is not the case, then even starting the contest procedure is pointless.
If they come to you
It happens that people come to you and say: "You have an inheritance opened, you need to sign these papers, pay this much money, and everything will be fine." The procedure here is simple: kick the visitor out, or better yet, quickly call the police.
First, lawyers don't just come around for no reason. Their time is precious. They call on the phone or send letters. And a recorded phone call or letter may, under certain circumstances, become documentary evidence of fraud. So if one fine day, out of the blue, you hear a doorbell and a pleasant (or not so pleasant) voice says: "I'm from a law firm regarding an inheritance" - you can, of course, open the door, but only if you're not afraid of a direct attack. Although testators vary too: what if he instructed his executor to personally inform you of a pleasant surprise - but that's at best a 0.01% probability, and the remaining 99.99% is simply a scam.
A couple of lawyer stories on the topic
About ten years ago, a girl from Russia went to Vietnam and fell in love with an English pilot. Mad love, but her trip was coming to an end, she returned home, and they continued corresponding through a friend. Then the correspondence stopped. And suddenly, about two years ago, someone comes to this woman's home and says: your acquaintance died and left you an inheritance. If you agree to sign something and pay for the mediation, I'll ensure you receive the inheritance. She, being smart, said: "I need to think" - and rushed to us. We found out that everything was fine, he's alive and well, so they just wanted to con the lady, to swindle her.
And there was another case: two wealthy old ladies were given the "Legion of Honor" - they were told this is only part of your relative's inheritance, give us money, you need to pay taxes on this order in France. And also, they said, you need to bury the testator in her homeland, that is, in Russia, and only under this condition did she bequeath to give the inheritance in full. Well, they squeezed three hundred thousand euros out of the old women under this pretext. And the order turned out to be just cheap trinkets.
Owner of factories, newspapers, steamships...
"Is it really me?" - thinks the heir to whom top managers, say, of a sizable computer company, turn for instructions. Yes, it happens (though very rarely) that a person inherits an entire enterprise. The feelings of such lucky ones range from "Wow, lucky!" to "And what am I supposed to do with this?"
To begin with, as in all other cases, you should quickly formalize all the documents if possible. Companies, like villas, wither without a master's eye. At the first opportunity, you should come to the enterprise and make an attempt to clearly declare your rights to it, indicate that you are taking control of the situation, and try not to come across as a sucker. To do this, you need to listen more and ask mostly general questions like "What is the production development trend?"
Why do all this? So that the company doesn't worsen its market position. Regardless of what you plan to do next - sell it or own it - you need to keep this business in no worse condition than it was when it passed to you. There aren't many stories on this topic, but they are quite instructive. Let's give a couple - contrasting ones.
One client inherited a small but quite active factory producing some kind of canned food. He was delighted, came, and took over management. Within two weeks, three of the four top managers quit, and one stayed - six months until retirement. The enterprise worked by inertia, but the new director extracted all the profit - he needed to settle in a new place, and money-consuming girlfriends appeared. Not knowing the language, the heir of course communicated with the management through an interpreter, but he didn't understand the need to go out to the people - the middle and lower staff didn't know him. Work went more and more sluggishly. In short, within a year the enterprise changed owners again, only it had already become a third cheaper.
Another lucky man didn't get the whole enterprise - he only got a controlling stake in a shipping company. He could, of course, push his ideas, but he decided to act smarter. Realizing that running a business, especially in another country, was beyond him for now, he agreed with the minority but more experienced shareholders on almost everything. Living on good dividends, he devoted all his time to improving his language skills, took a mass of training courses from business ethics to autogenic training, completed two MBA programs, separately mastered stock exchange matters, studied strategic management in depth, and only then intervened in management. And he did so well that over several years he tripled the market price of the company (not without acquisitions) and then sold his stake at a profit, investing the money in shares of another IT company. In parallel, he is building a small but separate firm - we Russians don't like to share.
But whether your inheritance will be a reason to obtain citizenship of another country depends on what country it is. In very few places does owning property mean automatically getting a local passport.
Times are now already (still?) such that there is no reason to refuse full-fledged enterprises falling from the sky onto you. One way or another, it will bring you one-time or regular income. It used to be different. If movable property was almost always received by the heir (another matter is that the native KGB had many ways to immediately take it away), then real estate - how could you use it? And testators of that level, as a rule, were not stupid people. They could include in the will a restriction like 'if my heir NN cannot personally manage the factory or if he is deprived of this opportunity, the factory should be transferred to other, such-and-such, heirs.' It was in these cases that people in leather jackets or gray overcoats gently hinted, 'give it up, it'll be better for you.'
Youth is no reason for carelessness
Each of us, if everything goes well, will someday become a testator. To be remembered kindly, you need to make a will, and also accurately indicate where your property is located: in which accounts in which countries the money is held, what shares in which enterprises you have, what real estate in which countries belongs to you.
Of course, the testator's wife and child will receive the inheritance in any case, if lawyers can find it. But young people often do not think that they may die. This is wonderful and in a sense even correct, but still it is better to complete simple formalities today than tomorrow to leave the family without means of subsistence.
Bank deposits need to be distributed especially carefully and they must be specified in the will with all details. Most foreign banks pay out money to heirs only when the picture is clear to them: who the heir is and in what share. For example, heirs for 4/5 of the deposit have been found, while the heir to one fifth exists but for some reason does not want or cannot receive his share. And in these cases banks do not release the deposit at all: that is the rule. Lawyers have to write letters to banks, persuade, coax. Sometimes it works. But if the picture is unclear, or most heirs are unknown, or their shares are unclear - banks block the deposit. True, interest is accrued, but it is impossible to get the money.
Now about the saddest thing: take care of your parents
As for parents, keep in mind: only our legislation classifies them as heirs of the first order. In no other country is this the case: parents inherit only if there is no wife and children. Therefore, if a person living abroad has a desire to think just in case about his parents, he must make certain orders in the bank regarding his account - or make a will. When the inheritance law of the country where he lived recently is applied, the parents will get nothing (unless we mean a resident of our country). Moreover, even if a person is registered in his homeland, if he has a domestic passport, but his business, property, and life interests are concentrated in another country - its inheritance law will apply.
The sourest situation for a domestic testator (or rather, for his heirs, of course) is when a bank account abroad is inherited. After all, inheritance of the account occurs according to domestic laws - that is, often parents or three wives with children participate... And the last, beloved wife most often does not want to give information about the inherited accounts (and about the rest of the property), where they are located, how much money is in them, and so on. And it would be fine if she just didn't give it - but it also happens that she sends some fake documents to the court, and then you will have no end of trouble with that court: every piece of paper will be examined three times under a magnifying glass and they will cling to the slightest defects.
We formulate the advice very briefly: draw up a will in due form and, while you are alive, notify all your heirs which lawyer has it. And in general, try to maintain peace between former and current members of your family who are dear to you.
Where testators live
Most inheritances in the form of bank deposits are opened - yes, yes, in Switzerland, despite all the difficulties. And if we take history with geography and, accordingly, complex inheritance (real estate, business, accounts, etc.), then Ukrainians, for example, settled more in Canada and the USA, Jews - in the USA, Israel and Germany, Armenians - everywhere, especially in France, Balts - in Australia and Canada. Russian inheritances are the fewest. Now there is a wave of cases involving those who died abroad during the war. And new cases are cases involving the new Russians, their foreign property. True, they are often simpler: apparently, lawyers advise advanced citizens on how and what is best to do.
Not your share
What? Do you really have to share with someone? And what did you think! First, an inheritance tax exists almost everywhere. A pleasant exception is Israel, where it was recently abolished. Second, in every country the tax depends on the degree of kinship: the closer to the testator, the lower the tax. True, everywhere there are some minimum amounts exempt from tax, benefits, sometimes discounts for those who, for example, have three children, or for the disabled.
It is not very pleasant to receive an inheritance from France - there the tax on it reaches 65%, although there are also amounts exempt from taxation. In England taxes are no higher than 30%. In the USA, as usual, each state has its own rules. But comparing tax rates makes no sense: somewhere the tax is lower, but other expenses are higher.
Property brought into our country is not subject to inheritance tax a second time - but not because there is such a special law, but simply because there are usually double taxation avoidance agreements with the countries where the inheritance is opened.
And, of course, in addition to taxes, the amount of the inheritance will be reduced by the lawyer's fee. Two options are possible here: either the lawyer works on a contingency fee (a share of the amount won), or you pay the lawyer for his work regardless of the result. In the latter case, you will regularly receive bills like: "10 minutes for reading the response of the court of the state of Pennsylvania - $30, 15 minutes for drafting a request to the mayor's office of Boston - $50, sending a fax to the evangelical church of St. Petersburg - $20, 30 minutes for thinking over further actions in the case - $100" and so on. An hour of work by a foreign lawyer costs from $200 to $450 plus postage and administrative expenses, which you will also have to pay.
If, however, you agree on a contingency fee, the rate will be set either as a fixed amount or as a percentage of the value of the inheritance. What percentage? A considerable one—at least 10% for each party of lawyers (ours and theirs). But you will only pay if you actually move from being a candidate for the inheritance to the status of heir.
Choosing the hourly payment option makes sense only if, firstly, there is something to pay with; secondly, the inheritance is large enough and relatively free of debts (and, mind you, this information will not be provided to you); thirdly, if you are sure that a closer relative who has appeared out of nowhere will not cross your path; fourthly, if you are fully convinced that the kinship can be proven. If at least one of these conditions is absent, it makes sense to choose a lawyer on a contingency fee: you may get a smaller share than you theoretically could have, but you will certainly not be at a loss. The lawyers of Inyurcollegia receive money only for won cases, and its partners abroad work with Inyurcollegia the same way. The fee is withheld only when there is not only a court decision, but also the money—here it is, ready to be transferred.
But at that moment, the amount of the attorney's fee will no longer be able to spoil your mood.