Israel and the United States have similar inheritance laws, but there are some differences. Being a U.S. lawyer, I’m no expert on Israel law. This article can be used as a starting point for people who live or have assets in both the U.S. and Israel and are planning their estate.
No mandatory inheritance – In both countries, there is no mandatory inheritance, meaning that you can make a will and leave your property to whomever you want. You can disinherit your children if you wish to do so. You can disinherit your spouse, although she will have a right to make a claim agains the disinheritance and receive up to 1/3 (one-third) of the estate or $50,000, whatever is larger.
In Israel, siblings get 1/3 if only the spouse survives and no children – If you leave no will, in both countries approximately half of your estate will go to the spouse and half to the children. The difference is, if you die with no children but with a spouse, in the U.S. the spouse would get the entire estate, while in Israel 1/3 (one-third) of the estate will be split among your siblings.
Different results in jointly owned property – The United States has a concept of “non-probate property.” You can own real estate or a bank account with a right of survivorship. It looks like there is no such thing in Israel, and all property owned together is subject to the probate court’s distribution among the heirs. This would present all sorts of complications in business arrangements and marital arrangements, as well as investments, so consult an Israeli lawyer if have or are thinking about joint property.
Guardianship preference – In both countries, you can make your wishes known in your will about the preference for a guardian for your children, and in both countries the court will make a determination and will generally respect your wishes.
Inheritance tax issues – As far as inheritance tax, there appears to be no inheritance tax in Israel, but if the person who died was a U.S. citizen, their estate may be subject to the U.S. inheritance tax.
Avoiding probate – If you have property both in the U.S. and Israel, you will need to go through probate in both countries. A good way to avoid probate in the U.S. is to place your property into a trust. This may be a way to avoid probate in Israel too, ask an Israeli specialist. A good option to consider is to make a trust that has both Israeli and U.S. property in it, so that it avoids probate in both countries.
Jurisdiction – Israeli courts have jurisdiction if the decedent was domiciled in Israel, even if he was not a citizen. I am pretty certain that the Palestinian territories have the same inheritance laws.
Comity – Israel and the U.S. recognize each other’s wills, when properly translated and certified.
No handwritten wills in U.S. – Hand written wills are not recognized in the U.S., but I think are recognized in Israel, as long as they are entirely in the testator’s handwriting (just the signature in the handwriting is not enough).
No oral wills in U.S. – Oral wills are not recognized in the U.S. but I think are recognized in Israel, sort of. Looks like an Oral will is valid in Israel if made on the death bed. It has to follow strict rules, such as has to be made on the dying bed, needs two witnesses, has to be put in writing right there, with a date. An oral will like this will be void if the testator does not die within 30 days. Once again, such will is not valid if made in the U.S. and will probably not be recognized by the U.S. courts even if made in Israel.
Attorney drafted will is recommended – We heartily recommend an attorney drafted will with two witnesses, to avoid the will being cancelled for mistakes or having mistakes that will affect the way inheritance is distributed
Israel has a better will storage system – In the U.S., we generally give wills to the people who made them. There is no good system for safekeeping wills. There is a way to deposit a will with the court, but we’ve found that it does not work very well. In Israel, however, there is an Inheritance Registrar’s bureau, which supposedly stores people’s wills.
If you need to make a U.S. will or trust, get in touch with attorney Albert Goodwin, Esq. at (212) 233-1233.