How do cross-border rules shape estate planning in the Crown Dependencies?

As cross-border families become more common, practitioners must navigate complex and sometimes conflicting legal systems, succession rules and tax obligations. The Crown Dependencies offer valuable planning tools, but their effective use needs careful coordination with foreign laws.

Understanding succession laws, domicile and disclosure rules is key to effective cross-border planning using Jersey and Guernsey structures.

In the below article, discover insights into cross-border estate planning that requires proactive structuring, engagement with local counsel and secure digital-asset strategies to integrate trusts, wills and lasting powers of attorney across multiple jurisdictions for clients.

How inheritance rules interact across multiple jurisdictions

Estate planning increasingly involves a cross-border element, reflecting the global nature of modern families and asset structures. Practitioners in the Crown Dependencies often assist with multi-jurisdictional estate planning which may involve lifetime structures such as trusts and foundations, in conjunction with traditional wills and lasting powers of attorney (LPAs).

Domicile (as distinct from residence or nationality) remains a key connecting factor in private international law, linking an individual to a particular legal system. Under English and Welsh law and the laws of the Crown Dependencies of Jersey and Guernsey, the laws of the deceased's domicile govern the succession of movable property and the laws of the property's location determine the inheritance of immovable property.

The UK's recent reform of its inheritance tax (IHT) regime, effective since 6 April 2025, has marked a significant departure from the long-established reliance on domicile as the basis for IHT liability. Now, an individual may no longer be subject to UK IHT after ten consecutive years of non-UK residence. This clear, time-based threshold makes it possible to plan with greater certainty around when UK IHT exposure on worldwide assets will end. In contrast to the previous regime, where proving a change in domicile of choice was subjective and open to challenge by HMRC, the new rules provide a more concrete basis around which clients can organise their affairs.

However, the interplay of inheritance rules across countries with common law, civil law and hybrid legal systems underscores the complexity global families face. Succession rules diverge sharply between jurisdictions. For example, UK law generally favours testamentary freedom, while several EU member states impose forced-heirship regimes, as seen in France or Italy. In Middle Eastern countries, succession is often governed by Shariah law, which imposes fixed inheritance shares for family members. For non-Muslims, recent legislative developments offer some flexibility. Expatriates can now opt for their home country's laws to govern the distribution of their assets through a registered will, such as via the DIFC Wills Service Centre or Abu Dhabi Judicial Department.

The role of trusts in cross-border planning

Trusts remain a cornerstone of cross-border inheritance planning. The trust laws of Jersey and Guernsey, governed by the Trusts (Jersey) Law 1984 (the Law) and the Trusts (Guernsey) Law 2007 respectively, offer a useful lens through which to understand the practical benefits of trusts in cross-border inheritance planning. Both jurisdictions apply local law to trust matters, which may enable clients to avoid forced-heirship rules that would otherwise apply under the laws of their domicile. These principles have been frequently recognised by the royal courts in both jurisdictions.

A leading judgment is Mubarak v Mubarak [2008] JRC 136, which concerned long-running divorce proceedings. The Royal Court of Jersey held that it could not enforce a judgment of the Family Division of the High Court of England and Wales that sought to vary or alter a Jersey trust under the English and Welsh Matrimonial Causes Act 1973. In short, the Royal Court confirmed that matters relating to a Jersey trust must be determined by Jersey law, as specified in Article 9 of the Law (the "firewall provisions"). Subsequent amendments to the Law have further strengthened this position.

Beneficiary interests under a discretionary trust are not treated as separate assets, which may have tax and estate-planning implications. Trusts may also offer protection from certain future claims, supporting their use in long-term succession planning. Will trusts and lifetime trusts are commonly used to support bespoke succession planning and can offer clients a significant degree of flexibility and control.

A will trust, which takes effect on death, allows a testator to retain control of their assets during their lifetime while ensuring that wealth is managed and distributed, potentially over a prolonged period, according to their wishes after death. These structures are particularly useful where beneficiaries are minors or vulnerable, or where there are long-term objectives such as providing funds to help educate future generations. A letter of wishes often accompanies will trusts, providing guidance to trustees on matters such as education and capital distributions.

In contrast, lifetime trusts are established during the settlor's lifetime and allow the settlor to participate in the management of the trust and gradually transfer assets into the structure over time. They reduce the need for probate, maintain privacy and allow beneficiaries to become familiar with the trust's operation. Lifetime trusts are also increasingly used to support intergenerational planning and philanthropic goals and can help reduce potential conflicts upon the death of the settlor.

Practical tips for future-proofing estate plans

• Separate wills: Prepare separate wills for assets located in different jurisdictions. These should be carefully drafted to avoid inadvertent revocation. For example, having a Jersey will can be very beneficial because of the speed of the probate application. Without one, probate must first be completed in the country of domicile (where the testator permanently resided) or the country where the will is first probated. A separate Jersey will can be beneficial for heirs so that they can gain access to assets more quickly, especially if there are substantial tax liabilities which need to be paid in other jurisdictions
• Local law compliance: Ensure that estate plans respect local succession laws. Engage local counsel where appropriate, as the testator's country of domicile will typically govern any potential challenges to a foreign will
• Use of trusts: Leverage trust structures where appropriate. These offer flexibility and asset protection, especially where there is the potential for future claims to arise
• Regular reviews: Review estate plans regularly to ensure they reflect changes in family circumstances and legislative or regulatory changes, including international reporting obligations such as FATCA and CRS
• LPAs: One in three people over 65 will develop dementia and the possible loss of mental capacity in the future is a predicament that throws up many questions. In both Jersey and Guernsey, LPAs enable individuals to appoint others to make decisions about their property and affairs, and health and welfare. Equivalent documents from other jurisdictions can be registered in these jurisdictions so that they have legal effect
• Safeguard documents: Ensure testamentary documents are appropriately safeguarded, particularly where there are multiple wills. Although the outcome was ultimately favourable, the recent Guernsey case of In the Matter of the Estate of Gene Mary Poole [2025] GRC 031 highlights the risks associated with the loss of original documents. In that case, the Royal Court of Guernsey permitted the registration of a photocopy of a will of realty after the original was lost, relying on affidavit evidence to confirm the testator's intentions and lack of capacity to revoke the original will
• Digital assets: Understand the evolving nature of cryptocurrencies, non-fungible tokens and other monetary digital assets. These are often stored in digital wallets and secured by private keys. It's vital that if such assets are to be transferred, the ability to transfer is provided in a secure way, for example through the use of a seed phrase or private key

What should cross-border families consider before drafting a will?

• Clarify status: Establish domicile, residence and tax status. This is a crucial first step that determines which succession laws and tax regimes apply. Cross-border tax advice should be sought to ensure the estate plan is structured optimally across all relevant jurisdictions
• List global assets: Encourage your client to prepare a comprehensive inventory of their global assets and their situs (location for legal purposes). This should include real estate, bank accounts, pensions, investments, business interests and digital assets. The location of each asset will impact which laws apply to its transfer
• Encourage the appointment of an experienced executor: A professional executor with cross-border estate administration experience can simplify estate administration, reduce delays and ensure compliance with local laws in each jurisdiction

How Ogier can help

Ogier's multi-jurisdictional team guides clients through the complexities of cross-border inheritance planning in the Crown Dependencies of Guernsey and Jersey. We work with clients to clarify their domicile, residence and tax status, and understand the succession laws and tax regimes that apply to their estate. We also offer professional executor services to ensure smooth and compliant administration across multiple jurisdictions. Contact Henry or your usual Ogier contact to find out more about our services.

This article was first published in STEP Journal (Issue 4, 2025). Read the full article 'Strategies across borders'

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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