Legal Definitions - foreign administration

Foreign administration refers to the legal process of managing and distributing a deceased person's assets that are located in a different jurisdiction (such as another state or country) than where the person primarily lived and where their main estate is being handled. It is a secondary or "ancillary" proceeding, necessary because the laws of the primary jurisdiction may not have direct authority over assets situated elsewhere. This process ensures that local laws are followed for those specific assets, allowing them to be properly collected, managed, and distributed to the beneficiaries.

Here are a few examples to illustrate this concept:

• Example 1: Real Estate Across State Lines
  Imagine a person who lived their entire life in Florida but owned a vacation condominium in Colorado. When this person passes away, their primary estate (bank accounts, investments, and other property in Florida) would go through probate in Florida. However, to legally transfer ownership of the Colorado condominium to their heirs, a separate legal process, known as foreign administration (or ancillary administration), would need to be opened in Colorado. This is because Colorado law governs real estate located within its borders, and the Florida court's authority does not extend to property in another state.
• Example 2: International Financial Assets
  Consider a business executive who was a permanent resident of Canada but maintained a significant investment portfolio and a bank account with a financial institution based in Switzerland. Upon their death, the bulk of their estate would be administered through the probate process in Canada. However, to access and distribute the Swiss bank account and investment portfolio, a foreign administration proceeding would likely be required in Switzerland. Swiss law would dictate the procedures for dealing with assets held within its jurisdiction, ensuring that the Canadian estate could eventually incorporate these funds.
• Example 3: Valuable Personal Property in Another Country
  Suppose an art collector lived in the United States and had their primary residence and most of their assets there. However, they also owned a rare and valuable antique car collection that was permanently stored and maintained in a specialized facility in Germany. When the collector dies, the U.S. probate court would handle the main estate. To legally take possession of, sell, or distribute the antique cars in Germany, a foreign administration would be necessary in Germany. This process would ensure that German laws regarding property, inheritance, and any applicable taxes are properly addressed before the collection can be transferred or liquidated.