ISRAEL Law and Practice Contributed by: Yaron Mehulal, Nataly Davidai and Shalom Hershkovitz, FISCHER (FBC & Co.)
• Israel; • the country where the will was made;
• If the deceased is survived by children and a spouse, the deceased’s spouse receives all joint household belongings (the family’s car, furniture, housewares, electrical appliances, etc) and half of the estate, while the remaining half is divided among the children, equally. • If there are children but no spouse, the deceased’s children share the entire estate equally. • If there are no children and grandchildren, but the deceased is survived by a spouse and parents, the spouse receives all joint household belongings (the family’s car, furniture, housewares, electrical appli - ances, etc) and half of the estate, while the remain - ing half is inherited by the deceased’s parents. • If there are no children and grandchildren, and the deceased’s parents are not alive, but there is a spouse, the spouse receives all joint household belongings (the family’s car, furniture, housewares, electrical appliances, etc) and two-thirds of the estate, while the remaining third is inherited by the deceased’s siblings (or if there are no sib - lings, then the deceased’s grandparents and their offspring); in addition, if the spouse was married to the deceased for at least three years and has lived with the deceased in the deceased’s property, the spouse also receives the entirety of the deceased’s share in that property. • If the deceased had no children nor a spouse, the deceased’s parents and siblings share the entire estate. • If there are no children, grandchildren, parents, siblings or grandparents but there is a spouse, the spouse inherits 100% of the estate. • If there are no children, grandchildren, parents or siblings and no spouse, the estate is divided equally between the deceased’s grandparents and their offspring. • If a deceased’s child is not alive, said child’s share of the estate is divided equally between the deceased’s grandchildren from said child. • If an heir stated above is not alive, their share of the estate passes to their legal heirs as per the above. 2.4 Marital Property Under Israeli legislation, each spouse is free to trans - fer, during their life and upon death, without restric - tion, all their property, which includes any and all
• the country of residence, usual abode or citizen - ship of the deceased, either upon their death or when the will was made; or • the country where the real estate is situated, when real estate is involved. Even when an estate is in place, the rules that are applied are those in force in the deceased’s country of residence at the time of their death, regardless of where the will was drawn up. It is important to note that, since 2015, European Union residents who hold Israeli citizenship can choose, as part of their will, which law should govern their estate, and may choose Israeli law. In practice, families putting in place succession plans using trusts or similar vehicles should be aware of the complex and strict taxation rules applicable to trusts in Israel, which, inter alia, subject a trust’s worldwide income to full Israeli taxation where even one benefi - ciary is an Israeli tax resident. Such taxation applies even where the trust’s settlor has not been an Israeli tax resident since the settlement of the trust, or has passed away, regardless of the settlor’s tax residency, the situs of the trust’s assets, the trust’s revocability, the number of foreign beneficiaries and the beneficiar - ies’ right to claim a distribution. Furthermore, specific attention should be given to the fact that most double tax treaties to which Israel is a party do not apply to trusts and may therefore result in higher taxation. Also, as in most European jurisdictions, families with US persons, companies with US shareholders and trusts with US beneficiaries, settlors and/or protec - tors encounter various difficulties in opening bank and financial accounts in Israel, and sometimes even in conducting ordinary bank transactions, such as send - ing or receiving transfers of funds. 2.3 Forced Heirship Laws There are no forced heirship laws in Israel. In the absence of a valid will, the following default heirship rules apply.
316 CHAMBERS.COM
Powered by FlippingBook