Getting the Money There

The tax analysis is the easy part. Logistics kill more cross-border bequests. Expect each foreign heir to need a W-8BEN, sometimes a US taxpayer identification number to claim a treaty rate, apostilled and translated death certificates, and, for any transfer of securities, a medallion signature guarantee. In practice only US and Canadian institutions issue that stamp, and usually only to existing customers, so a foreign transfer-on-death beneficiary can lose months to it. A wire of cash from the estate account needs none of it, which is one more reason to let the executor sell and send.

Sanctions and currency controls come next. A US bank will not send money to a sanctioned person or bank, which for an heir in Russia rules out much of the domestic banking system, and the suspended treaty means full withholding on anything US-source. Plan on paying a Russian heir into an account outside Russia, and on delays measured in months. Before you plan a bequest to anyone in a country under sanctions or with tight capital controls, ask the heir which account can actually receive it.

Finally, the heir’s country will want to hear about the money the way FinCEN wants to hear about your foreign accounts (section “Foreign Accounts: FBAR and FATCA”); India and Italy both require an annual foreign-asset schedule, with penalties to match. Give each heir, in writing, the date-of-death value of what they received and your original cost. Inheritance tax and the asset schedules run on the first; a carryover-basis country such as India or Germany taxes the heir’s later sale from the second.