Israeli Real Estate and Inheritance
If you own property in Israel, you should consider carefully how to pass it along to future generations.
There is no inheritance tax in Israel but thought still needs to be given to any possible tax ramifications for heirs who inherit real estate in Israel. There may be tax to pay on the sale of any property, or there may be other considerations if the heirs want to buy additional properties. An experienced real estate lawyer can advise you of any possible issues which need to be addressed.
When making a will abroad which includes property in Israel as part of the estate, it’s important to ensure that the legal paperwork allows the heirs to be registered in the Israeli Land Registry afterwards. For instance, not all trusts set up abroad are considered legal entities in Israel, and if a property is left to a trust which is not recognized as such in Israel, it cannot be registered in the Land Registry.
Wills written abroad are often lacking in the technical details which are needed to register the property in the name of the heirs (ID numbers, full legal names etc.). Your real estate lawyer can advise you about which details should be included in order to make implementation of the will quicker and easier.
Any will drafted abroad needs to take into account the implications of the Israeli Law of Inheritance, since this is what governs the inheritance of Israeli real estate.
If multiple properties are involved, it is prudent to do some tax planning which considers Israeli tax laws. In some circumstances, setting up a trust recognized as a legal entity in Israel is worthwhile. This may be either an Israeli-based trust or a trust located in another country. Your real estate lawyer will be able to advise you on the best options for your particular situation.