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Real Estate and Estate Planning

A reader recently inquired how purchasers from overseas should – from an estate perspective – structure the purchase of a second home in Israel. As some of our readers will be in Israel during Pesach and might consider buying an apartment, let’s discuss this issue.

US Ownership Structure

In the United States, properties are often owned by a husband and wife in “joint tenancy with rights of survivorship,” meaning each person has equal ownership rights, and upon the death of one spouse, the surviving spouse is generally entitled to full ownership of the property. Many of my clients automatically believe that this law is the same in Israel, but that is not the case.

Israel Ownership Structure

Elana Billig, an attorney and notary at the law firm of Gideon Koren & Co., whose practice focuses primarily on real estate law and estate planning, points out that when a husband and wife purchase a property in Israel using a standard purchase agreement structure, ownership gets registered in equal shares with each spouse being a 50% owner. Upon the death of one spouse, their 50% ownership would be divided in accordance with their Last Will and Testament.

But if there is no valid Will, the deceased spouse’s 50% ownership gets divided as follows: the surviving spouse will receive half of the deceased person's ownership and the children would receive the other half (this percentage can change when the person dies without children and in some other scenarios). Ms. Billig explained that, “in the absence of a valid Will or other contractual or prenuptial agreement, a grieving spouse may be in a situation where he/she will have to seek permission of his/her own children, or some other lawful heirs of the deceased spouse, to continue living in their home.”

Draft a Will!

This unfortunate situation can be avoided through the drafting of a Will which would allow the surviving spouse to remain in their home by bequeathing the deceased person’s proportionate home ownership initially to his/her spouse, and upon the surviving spouse's death, to their children or other beneficiaries.

Overseas Wills

Elana Billig recommends that an overseas Will should be checked to see if it conflicts with provisions of Israeli law before relying on it for use in Israel.  To make the Israeli probate process quicker and less problematic, she generally advises clients to prepare a second will, in accordance with the laws of Israel, to exclusively handle property in Israel.

Elana Billig is one of the exceptional attorneys whom I recommend to overseas purchasers. As one real estate professional explained, "she's one of the most pleasant, proficient and accessible lawyers I've worked with." Should you have any follow-up questions, feel free to contact her at elana@gkl.co.il.

“My Israel Home” is a real estate agency focused on helping people from abroad buy homes in Israel.To explore purchasing opportunities, you may contact Gedaliah at gborvick@myisraelhome.com. To read previous articles, please visit his blog at www.myisraelhome.com.

2011-04-08 12:56:27



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