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EmailINTERCOUNTRY TRANSFER OF THE PROCEEDS OF AN ESTATE
TREATY PROVISIONS : There are no treaties in force between the United States and any other country which specifically address the subject of choice of law in transferring the proceeds of an estate. Article 5(g) of the Vienna Convention on Consular Relations (VCCR), 21 UST 77, provides that consular functions consist in "safeguarding the interests of nationals, both individuals and bodies corporate, of the sending State in cases of succession mortis causa in the territory of the receiving State, in accordance with the laws and regulations of the receiving State." Bilateral consular conventions contain similar provisions. However, there are bilateral treaties or conventions in force between the United States and several foreign countries for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes of estates, inheritances and gifts, which must be considered prior to the imposition of any taxes in the foreign country. In addition, a comparable multilateral Convention on Mutual Administrative Assistance in Tax Matters is in force in Denmark, Finland, the Netherlands, Norway, Sweden and the United States. Information about treaties in force is available via the Internet on the home page for the Department of State, Office of the Legal Adviser, Treaty Affairs, List of Treaties and Other International Agreements of the United States In Force at http://www.acda.gov/state/. The U.S. Internal Revenue Service, International Division should be in a position to offer general information on double taxation matters and its administration in the United States and foreign countries. See the Internal Revenue Service home page on the Internet at http://www.irs.ustreas.gov .
U.S. CONSULAR RESPONSIBILITIES : U.S. consular officers have been responsible for personal estates of Americans abroad for more than 200 years. 1 Stat. 254 of April 14, 1792 provided that consuls were to take charge of and settle estates of Americas who die abroad. More recently, 22 U.S.C. 4195-4198, 22 CFR 71.15 - 72.55 provide that consular officers of the United States act as provisional conservators of the personal estates of deceased U.S. citizens abroad. U.S. consular officers would not take possession of real property belonging to a deceased American abroad. Rather, the consular officer would provide the next-of-kin with general information as to how they could proceed in the local (foreign) courts, and a list of local English speaking attorneys. Similarly, consular officers cannot take possession of foreign bank accounts. See our general information flyer regarding estates of U.S. citizens who die abroad on the Consular Affairs home page at http://travel.state.gov or via our automated fax service, using the phone on your fax machine, at (202) 647-3000.
RIGHTS OF FOREIGN CONSULS IN THE ADMINISTRATION OF ESTATES IN THE UNITED STATES : Article 5(g) of the VCCR and more specific provisions in bilateral consular conventions recognize that foreign consuls in the United States have certain responsibilities regarding the estates of their nationals or estates in which their nationals have an interest, in the United States. This does not authorize the foreign consul to act as an "attorney at law," since an individual would only be empowered to act in that regard if permitted to do so by state law. The rights of foreign consular officers within the United States to represent their nationals'' interests in estate proceedings in the United States may be affected by the existence of so-called "use, benefit and control" restrictions on the transfer of private funds statutes and by judicial determinations of the effect of such statutes with regard to the consul''s home country. Under consular treaties and practice, a foreign consul in the United States has full authority to set the required fees for facilitating the distribution of an estate to a sending state national residing in the sending state. However, there is no obligation under consular treaties to use a foreign consular officer in the United States to send a share of the estate to a resident in the sending state. The share of the estate may be sent directly to the beneficiary in the sending state or transferred directly from a U.S. bank to the appropriate foreign bank.
FOREIGN ASSETS CONTROL REGULATIONS: It is important to be mindful of any applicable foreign assets control regulations. For additional information, consult the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) home page on the Internet at http://www.treas.gov/ofac/ or via OFAC''s info-by-fax service at (202) 622-0077.
TRANSFER OF PROCEEDS OF AN ESTATE IN THE UNITED STATES TO FOREIGN BENEFICIARY: The subject of transfer of proceeds of an estate to a beneficiary abroad has been addressed by the U.S. Supreme Court in Zschernig v. Miller (389 U.S. 429; 88 S. Ct. 664; 19 L. Ed. 2d 1683 (1968) in applying the state law on distribution to alien heirs in foreign countries. In Zschernig , the Court held invalid, as applied, an Oregon statute prohibiting the transfer of such funds to nonresident alien heirs unless the heirs could show that reciprocity in inheritance existed in the foreign country and that they would receive full use, benefit and control of the funds. The Court held that the statute, as applied, was an unconstitutional intrusion by the state into the field of foreign affairs. What effect this decision might have on similar statutes in other states would be determined, in the first instances, by the courts of those states. See also, Clark, Attorney General, as Successor to the Alien Property Custodian, v. Allen et al (331 U.S. 503 (1947) and Kolovrat et al. v. Oregon (366 U.S. 198 (1962). But see, 7 Whiteman, Digest of International Law, 687 (1968); Boyd, Consular Functions in Decedents'' Estates, 47 Iowa L. Rev. 823, 824-827 (1962), and Boyd, "Constitutional, Treaty, and Statutory Requirements of Probate Notice to Consuls and Aliens", 47 Iowa L. Rev. 29-103 (1961).
DISTRIBUTION OF INHERITANCES: The administration of estates in the United States, including the issue of distributing inheritances to foreign beneficiaries, is a matter primarily within the jurisdiction of the various states. The local court having the funds to be distributed abroad is the appropriate body to determine whether, in accordance with state law, distribution may be made.
DISTRIBUTION OF AN ESTATE ABROAD TO A BENEFICIARY IN THE UNITED STATES: The administration of estates abroad involving real property or foreign bank accounts is a matter primarily within the jurisdiction of the foreign state. The foreign or other authority having the funds to be distributed in the United States is the appropriate body to determine whether, in accordance with local law, distribution may be made.
FOREIGN ESTATE TAXES: It is not unusual for foreign authorities to impose a tax duty or other fee against the estate to be transferred from the United States to a beneficiary in the foreign state or against the estate to be transferred from the foreign country to a beneficiary in the United States. U.S. consular officers abroad can make general inquiries to appropriate foreign authorities to ascertain whether the foreign state would impose a tax, duty or other fee (flat fee or percentage) against the estate to be transferred to a beneficiary in the foreign country or an estate in the foreign country to be transferred to a beneficiary in the United States. The U.S. Internal Revenue Service, International Division should be in a position to offer general information on double taxation matters and its administration in the United States and foreign countries.
TRANSFER OF PROCEEDS OF AN ESTATE TO A BENEFICIARY IN A COUNTRY WITH WHICH THE UNITED STATES HAS NO DIPLOMATIC RELATIONS: The "use and benefit" provisions referred to above may come into question in relation to proceeds of an estate to be transferred to a beneficiary in a country with which the United States does not have diplomatic relations. As a practical matter, it may not be possible to find reliable methods of transferring the funds. As noted above, there may be applicable Foreign Assets Control regulations, IRS or other restrictions. Information about which countries the United States has no diplomatic relations with is available from the Department of State, Office of the Legal Adviser for Diplomatic Law and Litigation, 202-647-1074.
RETAINING A FOREIGN ATTORNEY: It may also be necessary for the administrator of the estate in the United States or the American beneficiary of the estate in Japan to retain local legal counsel in the foreign country. Lists of English speaking foreign attorneys are available from the Department of State, Bureau of Consular Affairs, Overseas Citizens Services, Office of American Citizen Services and Crisis Management, Room 4817 N.S., 2201 C Street, N.W., Washington, D.C. 20520. See also our general information flyer, Retaining a Foreign Attorney , available via the Consular Affairs home page on the Internet at http://travel.state.gov or via our automated fax service, using the phone on your fax machine, at (202) 647-3000.
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