1. Why Should I Bother Making a Will?
Making a Will, which is usually a simple and relatively inexpensive document in Israel, can be a very straightforward expedient for avoiding intra-family conflict, squabbles and misunderstandings amongst your heirs. In addition, probating a Will, when the time comes, involves much less expense, time and bureaucracy than that required in order to obtain a Succession Order. Moreover, the latter may well distribute your estate in a manner which is less than ideal – for example, it may grant your widow only half of your estate, with the other half being distributed outright amongst your children. Your Will can also appoint named guardians to look after your children should you and your spouse die while they are still young or are incapable of managing their own affairs.
A Will can thus deal clearly and straightforwardly with issues such as:
- whether you would like your spouse to take possession of all your assets after you die, or whether you would prefer to distribute your assets in a different manner, e.g. half to your spouse and the other half to your children, or to children from a former marriage;
- whether any of your children have special needs, which may justify an unequal division of your assets;
whether your grandchildren should inherit the share of your estate that their parent would have inherited had s/he been alive on the date of your death;
- whether a trust ought to be established to preserve the assets of your estate after your demise, in order to allow for their distribution only after the beneficiaries have reached a certain age (usually 21 years of age in the case of Israeli beneficiaries, after Army service);
- whether you would like to make any special bequests of any items of monetary or sentimental value to ensure their use for one or more generations to come;
- whether you would like to include a long-stop provision to cover the possibility that, God forbid, your entire family (children and grandchildren included) might die in a plane or car accident, etc.
the appointment of named guardians over your children, should you die before any of them reach the age of 18 or 21.
2. One or Two Wills?!
(a) I made Aliyah but still have assets abroad. Can I cover all of my assets with one Will made in Israel?
Technically, yes, although on reaching the age of 120 your Israeli Will would then need to be probated in more than one jurisdiction, which can be a costly and bureaucratic procedure.
As a general rule, a person who owns assets in different countries or jurisdictions is therefore advised to prepare a separate legal Will in each jurisdiction, in order to avoid unnecessary tax and other complications in the future. So, if my wife and I own assets in Israel but we still own assets in England and America, between us we should sign three separate wills: one in Israel and in the UK for me, and one in Israel and the US for my wife.
(b) If the vast majority of my assets have been moved to Israel, need I still make a separate Will abroad?
In our last tip, we advised making separate Wills for each separate jurisdiction in which you have assets. However, there may be occasions when you don’t need to make a separate Will abroad at all.
For example, if you own a bank account abroad, you can simply complete a “nominated beneficiary” form, through which you designate one or more family members or other beneficiaries to receive the proceeds of your account once you die. In this manner, your few overseas assets will pass independently of any Will that you have drafted, thus preventing them being frozen upon your death until such time as the relevant Will is probated or a succession order is made in case of intestacy.
3. What Does Probate Mean?
‘Probate’ is a term commonly used when talking about applying for the right to deal with a deceased person’s affairs generally – and specifically to resolve all claims and to distribute the deceased person’s property under a valid Will. A “Grant of Probate” (Tzav Kiyum Tzava’ah) confirms the validity of a deceased person’s Will. Once a Will has been probated by the Israeli Succession Registrar (Ha’Rasham Le’Inyanei Yerusha), or by the Family Matters Court (Beit HaMishpat Le’Inyanei Mishpacha) in less straightforward cases, everyone can rely on its authenticity. Probate thus protects the instructions of the deceased, confirms the executor as the person entitled to deal with the deceased’s estate in accordance with his Will, protects the interests of family members who may have claims against the estate, and protects the executor against claims and lawsuits.
4. The Appointment of Executors in One’s Will
An executor is a person or trust company whom you name in your Will to carry out (“execute”) your wishes and distribute your estate when you die. Your estate is what you own at the time of your death. It may include all kinds of property such as a car, a house, a cottage, land, furniture and jewelry. Other property may come into your estate after your death, such as interest on investments and income from rental property.
The executor’s responsibilities include obtaining the original copy of your Will; taking control of your estate and make a list of your property; applying to the court for probate, where appropriate; administering the estate and paying off all outstanding debts; and distributing your property according to your wishes as set out in your Will.
(a) Is it advisable for me to appoint an executor in my Will – or not?
Unlike in other jurisdictions, the appointment of an executor is not required under Israeli law. Indeed, if the estate is small or straightforward, it is probably not necessary, albeit that an executor can assist in the efficient distribution of the estate. The appointment of an executor can add considerably to the costs of winding up an estate, as the executor is required to file with the Administrator General’s Office (האפוטרופוס הכללי) an inventory of all the estate’s assets and an annual report of his dealings with those assets, as well as various applications to the court.
(b) When ought an executor to be appointed?
One or more executors ought to be appointed under your Will, in cases where complications can be foreseen, e.g. in cases of potential disputes between beneficiaries, such as where the testator has children from a previous marriage. Even such cases may not require the appointment of an executor – I once had the good fortune to be inspired by an elderly couple (his second marriage with children from his first wife, her first marriage with no children), where it was clear that the new wife got on so well with the children of her husband’s first marriage that she wanted to leave 90% of their assets to them!
An application to appoint an executor would need to be made, for example, when one of the beneficiaries cannot be traced.
(c) Should family members be appointed as one’s executor?
You can choose either a person or a trust company to act as your executor. If you choose a person to be your executor he or she must be 18 years or older. Most people choose a relative or close friend as executor. If your estate is large or complicated you may wish to appoint a professional person to act as your executor, such as your lawyer or accountant, or even both.
Family members will usually agree to administer the estate without taking a fee. If you wish to name a family member in your Will, you should always discuss the role with the person in advance so that the person you choose knows what is involved with the job. Remember, also, that the person you name in your Will as executor has the right to refuse to act as your executor. Being a financial or legal expert is not necessary, as long as your executors have access to competent advisors to advise and assist them in the administration of the estate. However, executors cannot leave important decisions to others, such as whether to sell an asset or whether to invest in shares or bonds.
By contrast, if your estate is large or complicated, or you prefer not to have friends or family act as your executor, or you feel that family members of friends do not have the necessary time or experience, you should consider appointing a professional executor, despite the fact that such a person Will expect to be paid for their professional services rendered when winding up an estate. Professionals may offer the familiarity with tax law, investment management, real estate or business administration which is required to administer your estate.
(d) Should I choose an alternate executor?
Yes, you should appoint an alternate to replace your executor in case your first choice is unwilling or unable to act as executor at your death. Even if you have chosen your spouse to be your executor it is a good idea to choose an alternate. If your executor is unable to act and you have not named an alternate in your Will, the Probate Court will have to appoint one, assuming an executor is required.
5. Appointment of Trustees
(a) What is a trustee and what is the difference between an executor and a trustee?
The executors distribute and administer the testator’s estate after his death. The trustees will take over and manage any trust to be created under the Will once the estate administration has been completed.
(b) When ought a trustee be appointed?
Trustees may not always be required. In the case of a simple Will, there is usually no need to create a trust. In other more complex situations the testator may need to create a trust, such as where a minor beneficiary has an interest in the estate and the property cannot be distributed to that minor as he cannot give a good receipt, or where the testator does not wish the minor to inherit his interest in the estate until he reaches a certain age (often 21 in Israel, after the conclusion of IDF service).
6. The Procedure for Signing my Will
Once you have approved the wording of your Will, you should:
- Print out two copies of the Will (three copies if you are a couple), one for each of you and one for the executor, if one has been nominated in the Will.
- Sign and date the final page of the Will, in the presence of two independent, adult witnesses (who should be of sound mind and not related to each other or to you).
- Append your initials at the bottom of the other pages of the Will.
- After you have signed and dated the Will, the witnesses should sign their names where indicated on the final page of both copies of the Will. They should then add their full names, I.D. numbers and addresses beneath their signatures.
- Finally, the witnesses should also append their initials at the bottom of the other pages of the Will.
- One of the signed Wills should be kept by you in a safe place, while the other should be delivered to your executor (if one has been nominated under the Will).
7. Signing one’s Will before a notary – what are the advantages?
(a) Do I need to sign my Will before a Notary?
By Israeli law, your Will is valid if signed in the presence of two or more ordinary witnesses over the age of 18 who are present and witness the Will at the same time as you sign. Both you and the two witnesses must be of sound mind, and none of you should be related.
(b) Are there any advantages to signing a Will before a Notary?
As mentioned above, by Israeli law, a last will and testament is valid if signed by its maker (known also as the ‘testator’/’testatrix’) in the presence of two ordinary witnesses. At times, however, a person making a will may choose to sign it before an Israeli Notary. The Notary confirms that the will has been read to the testator and that the testator declared of his own volition that it was his last will.
The advantage of signing a will before a Notary is two-fold:
- the testator may state his will orally or in writing in the Notary’s presence, without the need for any additional witnesses;
a notarial will has stronger weight than other types of wills under Israeli law (it is akin to a will signed before a judge), thus eliminating the potential for any future claims of fraudulent signature by the testator, such as on the basis of undue influence or duress, which might result in the will’s disqualification.
- Notarized Wills can thus be kept totally secret – no-one need know of their existence; and the presumption will be that the testator was of sound mind and memory and free from any influence or duress whatsoever, when signing his Will.
8. What is the Procedure for Changing my Will Once it Has Been Signed?
Your Will can be changed whenever you wish, either by means of a codicil (nispach, in Hebrew) or simply by drafting a new Will (which is usually the cleanest and best option, assuming the original Will has been saved on the computer).
It is advisable to review one’s Will for any important changes at regular intervals (for example, once every five years).
That said, ideally one’s original Will should be drafted in such a way, as to obviate the need for any simple changes – for example, by avoiding naming one’s children who Will inherit in equal shares, when further children might be born in the years ahead (or, alternatively, stating: “My children now living are…”).
9. What is a “Tofes Arichut Yamim” and how can it bypass the Will?
This is a form, which a couple are advised to ask their bank to sign, either when opening their account or afterwards. It appoints both spouses as co-owners of their bank account. This simple expedient enables either spouse to continue to act in the account even after the death of the other spouse (the “right of survivorship”). Without this device, the account would be automatically frozen upon the death of one spouse, and the bank will only agree to allow dealings in the account upon the presentation of a Probate Order (where there is a Will) or Succession Order (upon intestacy).
The procedure can also be useful in the case of elderly relatives, to enable one or more of their children, for example, to handle their finances on their behalf – without the need to sign a power of attorney document before a Notary (which document will, in any event, lapse automatically upon the account holder’s death). Of course, such an expedient should only be used if there is complete trust between the elderly person and his or her relative.
10. I am a Torah-observant Jew and believe it healthy and proper in modern times for all my children to inherit an equal share of my estate after I die, including my firstborn son and my daughters. Can a Will be drafted so as to comply with the requirements of both Halachic and modern Israeli law?
According to Jewish Law, only male offspring are capable of inheriting their father’s estate. The Torah awards women no rights of inheritance as long as there are male heirs in the same class. So, daughters will not inherit if there are sons, and sisters will not inherit if there are brothers. Moreover, when the first born is a male, he is entitled to a double portion – two shares of the tangible assets of the estate. The upshot of the above is that a person, according to the strict letter of the law, is unable to distribute his estate to non-halachic heirs, such as a wife or a daughter, or in a way which would deprive his firstborn of his halachic entitlement to a double portion, without violating the Halacha.
One way around this challenge is to make a gift of one’s property at any time he is capable of doing so, before his death, for example to his daughters. In practice, however, the maker of the will may be unable to part with his possessions during his lifetime, which is a drawback of making an outright gift. Moreover, it is not possible for a gift made during his lifetime to be effective after the will-maker’s death – because, according to the Halacha, at the moment of death the title to his possessions vests automatically in his heirs! The way of getting round this quandary is to draft a legal instrument, which would enable the beneficiary to take immediate title to the property – but, at the same time, would enable the donor to retain the right to all income earned during his lifetime, as well as to revoke the trust whenever he desires. This is known as a “revocable inter-vivos trust.” The drawback to this method is that the majority of halachic authorities require a formal transfer of title to the property (kinyan) to be binding and such a kinyan will only be effective in transferring property which is currently in the donor’s possession at the time of the kinyan! It would have no effect on property yet to be acquired, such property not being yet in existence (davar sh-lo ba le’olam) – see: Bava Metzia 46a, Tur and Shulchan Aruch, Choshen Mishpat 203, 209). Yet a conventional will generally deals with future holdings as well.
A different way to circumvent the halachic restrictions on inheritance is by creating an Indebtedness. Simply put, this method enables a person to draft a secular will, while effectively distributing his estate equally to both male and female heirs. He does so by creating an indebtedness well in excess of the total value of his estate, as leverage to encourage his sons to carry out the terms of his will. Should they fail to do so, the will would require them to pay the full monetary debt to the daughters (or non-firstborn sons). This debt becomes a lien on all of the will-maker’s property – both current and future holdings. This technique was primarily used to give daughters a half share or full share in one’s estate and is known as shtar chatzi zachar (half share) or shtar zachar shaleim (full share). Such a document was often drawn up and delivered to a daughter at the time of her marriage.
In view of the above halachic problems/challenges, and in light of the above suggested potential solutions, the writer draws up two documents for religious clients interested in making an Israeli Will. The first is a standard, secular will, drafted in Hebrew or English, according to the laws of the State of Israel, tailored to the specific needs of the client – which usually involve distributing each will-maker’s property to the surviving spouse and then to each of his/her children (whether male or female) in equal shares (whether firstborn or otherwise). The second document constitutes a “Halachic Wills Appendix,” based on a Hebrew document drafted by Rav Zvi Yehuda ben Ya’akov, a Dayan on the Tel-Aviv Regional Rabbinical Court. This document effectively enables the secular will to comply with the requirements of Halacha, combining as it does the elements of the gift approach (for property on which a kinyan can work) and the penalty payment mechanism (in the sum of double the share that each beneficiary would be entitled to receive under the secular will, in the event that the sons do not pay their full monetary obligations to the daughters under the ‘note’ of indebtedness). The “Halachic Wills Appendix” is drafted, as mentioned, in a separate document – which has the added advantage that it need not be brought to the attention of a non-religious judge (who may otherwise be confused at best, particularly by its unusual “indebtedness” provisions) at the time the ordinary, secular will is probated.
For further advice and assistance in making an Israeli or UK Will, or a Halachic Wills Appendix, feel free to contact Simon: 0737-40-60-40 / 0545-742-374 / [email protected]