Disposition of Estates: cross-border assets

More deceased estates than ever comprise cross-border assets, necessitating a need to ensure the will’s terms are drafted robustly.

Any ambiguity in the will could lead to expensive litigation that drains the estate of its assets.

A recent case1 illustrates the potential risks for private client solicitors and their clients where the estate includes foreign assets. The deceased was domiciled in Russia at the time of his death in July 2018. His wife remained in Russia. The deceased had made a will in 2013 leaving his estate to his two children in equal shares.

The will specified that it was to have effect only in respect of his assets in the UK. At the date of death he was, in fact, beneficially entitled to the contents of a bank account in Jersey. Just weeks before his death, he wrote to his solicitors stating his intention to alter his will in order to deal specifically with the Jersey-based assets. He requested his solicitors to amend the will to that effect, but sadly, he died before his instructions were carried out.

At issue for the court was whether his original will dealt with the assets in Jersey. If it did, his estate – including the Jersey assets – would pass to his children in equal shares under the will terms. But if not, either the court could order rectification of the will; or otherwise the deceased’s widow would automatically be entitled to the Jersey assets under the intestacy rules.

The deceased’s intention was a vital consideration for the court. The evidence demonstrated that he had intended that the will would dispose of his Jersey assets. He had, for instance, personally drafted a will before his solicitors drew it up professionally. His draft included the intention to make specific legacies of his Jersey assets. Lewison LJ concluded: “The two are only rationally reconcilable on the basis that [Mr Rossiter] intended ‘the UK’ to include Jersey.”

The appeal judges also considered the constitutional status of Jersey in relation to the UK. It was common ground that, in the will as executed, ‘UK’ stands for ‘United Kingdom’. The court also pointed out that despite dictionary definitions of the UK not including the Channel Islands, there are contexts (as far back as an 1888 Divisional Court ruling) in which the UK has been held to encompass the Channel Islands.

The court ruled that Jersey is not an independent state under international law; Jersey is one of the British Islands as legally defined; and previous rulings have held that ‘UK’ included the Channel Islands.

Therefore, it was undoubtedly the deceased’s objective intention on the evidence to make a will that dealt with his assets in Jersey. His children would then inherit his estate in equal shares, including the Jersey assets.

This ruling is an abject lesson in the special care required when drafting wills when the testator has a beneficial interest in assets in other jurisdictions. It also demonstrates that where a client instructs solicitors to amend a will, it is important that this is done within a reasonable time to minimise the risk of a dispute.

1Partington v Rossiter 2021] EWCA Civ 1564


Posted on 22.12.21