If you own an asset in Israel...
AS AN Israeli lawyer based in London, I frequently receive questions from UK clients regarding Israeli probate and property. In this article, I will discuss two issues that can affect just about everyone who owns an Israeli flat, bank account or any other asset.
GET A SECOND ISRAELI WILL
Executing a UK will that covers all of the testators’ assets, including assets outside the UK, is standard English legal practice. When it comes to assets a person holds in Israel, no disposition can take place before a probate is granted by the Israeli probate registry or the courts. There can be no disposition regarding any asset. The banks will not pay out any money, even in cases of jointly owned accounts, except where a survivorship clause was included when the account was set up.
Section 136 of the Israeli inheritance act 1965 grants exclusive jurisdiction to the Israeli courts for granting probate or letters of administration for a non-Israeli who left property in Israel. Beneficiaries and/or executors of a will need to apply to the Israeli court and produce the original will. It will be difficult to comply with this, as there will be only one original copy of the will in the UK and this will be required for local probate procedures, which can take a long time. When UK inheritance tax is due, the issue becomes more urgent. A separate Israeli will can be executed to bypass this burden. Only the assets owned in Israel will be affected by the Israeli will, not assets owned in any other jurisdiction. This will help save time and costs and provide legal certainty in the way the probate will take place in Israel. It is highly advisable to appoint an Israeli probate lawyer as the executor of a substantial or complex estate in Israel.
OWNING ISRAELI PROPERTY
An heir to a property in Israel inherits duties to contribute to its maintenance, such as paying council tax, repairs, service fees, etc. When co-ownership is involved, the co-owner has the right to receive their share of rent payments or a reasonable payment for the use of the property, for example when the other partner occupies it. Any partner in an Israeli partnership has the right to dissolve the partnership by physically dividing the property between them, selling it to the other partner or selling it to a third party.
In many cases, the restrictions on travel to Israel imposed by Covid-19 caused problems with the management of co-owned properties and the loss of control by non-Israeli partners. In some cases, co-owners may ask a good neighbour or relative for help, but in most cases the help is only temporary and does not solve the problem of managing a shared property.
Negotiations with the other partner may lead to the execution of a partnership agreement that will govern the management of property, income shares and reporting obligations. In some cases, it may be in the co-owner’s best interest to sell the part for a market price, despite the objections of the other party.
An Israeli will helps save time and costs and provides legal certainty’
Eli Rosenberg is an Israeli lawyer permanently residing in London, expert in Israeli probate and property law. Founded in 1975, Rosenberg & Associates has offices in London and Tel Aviv and specialises in property and probate law. The firm has extensive experience with UK clients and a deep knowledge of the tax and legal differences between the UK and Israel. Call 0204 538 7458. This article is for general information purposes only, and should not be taken as legal advice. If you have specific questions, seek legal advice