Realizing an Inheritance from the U.S. for an Israeli Resident

Inheritance Realization from the U.S. for Israeli Residents – Claim What’s Rightfully Yours, No Surprises

Realizing an inheritance from the United States as an Israeli resident can be a complex process – but with us, it begins simply and clearly: with a one-hour professional consultation.
During this session, we’ll dive into the details of your case, identify the legal and financial challenges, and map out the options available to you. At this early stage, we can already estimate the expected tax liability, outline the costs involved, and provide you with a clear, structured quote for full legal and administrative support – all the way until the money is in your account.

Documents to Bring to the Meeting

1. Probate Order / Will Validation Order from the U.S. – A certified copy of the probate or will validation order issued by a U.S. court, if available;
2. Death Certificate – A certified copy of the decedent’s death certificate;
3. Will – If applicable, a certified copy of the original will;
4. Executor Appointment – If an executor was appointed in the U.S., please provide proof of the appointment;
5. Asset Inventory – A list of the assets included in the estate (e.g., cash, real estate, securities);
6. Tax Clearance Certificates – Documentation of any U.S. estate tax payments (if relevant);
7. Contact Information of Involved Professionals:
   • S. attorney handling the probate proceedings;
   • S. accountant (if applicable);
   • Israeli real estate attorney (if the estate includes Israeli real property);
   • Investment advisor/banker (if applicable);
   • Executor of the estate (if appointed);
   • Contact details of additional heirs.

Inheritance Realization Process

S. Probate Proceedings:

It is important to note that all legal proceedings in the U.S. must be handled by a licensed attorney admitted to practice probate law in the relevant state.

We strongly recommend that our office be involved from the outset to ensure full integration of legal and tax advice between the U.S. and Israel, considering the complexity of the applicable laws and tax regimes.

The probate process is the legal procedure through which a U.S. court:

• Validates the will (if one exists);
• Appoints a personal representative (executor);
• Oversees the collection of estate assets;
• Ensures debts and taxes of the deceased are paid;
• Authorizes distribution of the remaining assets to the heirs.

Stages of the Probate Process:

1. Filing a petition with the court – submission of the will (if available) and petition to open probate;
2. Appointment of executor – the court appoints a personal representative (usually named in the will);
3. Asset identification – the executor locates and gathers all estate assets;
4. Creditor notification – publication of notice for potential creditors to submit claims;
5. Debt settlement – payment of the decedent’s debts, including medical bills and funeral expenses;
6. Tax payment – filing of estate tax returns and settlement of any federal or state estate taxes;
7. Asset distribution – distribution of remaining assets to the heirs;
8. Estate closure – filing of the final report and closing the estate with the court.

The duration of the probate process varies from several months to several years, depending on the estate’s complexity, the number of heirs, and whether disputes arise.

Tax Implications in Israel:

• Inheritance is exempt from tax in Israel under current law;
• However, income generated from inherited assets (such as interest, dividends, rental income) is subject to Israeli income tax;
• Reporting the inheritance to the Israeli Tax Authority is required if its value exceeds the legal reporting threshold;
• If the inheritance includes financial assets, the U.S.-Israel Tax Treaty must be considered to avoid double taxation.

Transferring Assets to Israel:

• Cash – via bank transfer to your Israeli account (subject to reporting requirements for large transfers);
• Real Estate – through registration in your name or sale and transfer of proceeds;
• Securities – via transfer to an Israeli investment account or liquidation and transfer of proceeds;
• Other assets – handled based on their nature.

Required Reporting:

• Annual reporting to the Israeli Tax Authority regarding foreign-held assets and accounts;
• Reporting to the Bank of Israel on foreign-held assets (if applicable);
• Disclosure of large financial transfers in accordance with anti-money laundering regulations.

Benefits of Integrated U.S.-Israeli Advisory Services

1. Optimized tax planning – avoiding double taxation and maximizing benefits under the tax treaty;
2. Cost and time savings – coordination between advisors prevents duplication and errors;
3. Holistic approach – addressing all legal and tax aspects in both jurisdictions;
4. Proactive problem-solving – early identification and resolution of potential issues;
5. Personalized support – continuous guidance throughout the complex process.

Important Notes

1. The process of realizing an inheritance from abroad can take several months to years, depending on the estate’s complexity.
2. It is essential to review the specific probate requirements in the U.S. state where the estate is administered.
3. In some cases, it is possible to avoid full probate proceedings through simplified procedures, depending on state law and estate value.
4. Our firm works in collaboration with leading U.S. law firms specializing in probate and international taxation.