How Citizenship by Investment Affects Inheritance Rights

Citizenship by investment opens doors for travel, banking, and security—but it also ripples through your estate plan in ways many families only discover during probate. I’ve sat with clients who assumed a new passport would “move” their estate for tax or succession purposes, only to find that the law looks first at residence, the location of assets, and marital property—citizenship is often a distant fourth. That said, in the right circumstances, a strategically chosen citizenship can unlock testamentary freedom, simplify probate, and reduce taxes for your heirs. The key is knowing where citizenship matters, where it doesn’t, and how to join the dots across jurisdictions.

The quick answer: what citizenship changes—and what it doesn’t

What it can change:

The law you may choose to govern your succession (especially under the EU Succession Regulation).

Access to court systems and probate options in your new citizenship country.

Availability of trusts, foundations, or corporate holding structures under that country’s law.

In some cases, family law choices and recognition of marital property agreements.

What it usually doesn’t change by itself:

Your inheritance or estate tax exposure—those depend on where you’re domiciled or resident and where your assets sit.

Which court has primary jurisdiction for probate—that’s often where you live or where the assets are located.

Forced-heirship rules in the country where you habitually reside or where your real estate sits, unless you validly choose another law that overrides them.

If you remember one principle, make it this: succession is driven by three forces—your connection to a legal system (habitual residence/domicile), the location of each asset (situs), and your family property regime. Citizenship is a tool that interacts with each of those, sometimes decisively.

The three pillars of cross-border succession

1) Law of the person: habitual residence, domicile, nationality

Habitual residence is where your life is centered—your home, business, school for the kids. Under the EU Succession Regulation (Regulation 650/2012), that’s the default law for your worldwide succession (with exceptions).

Domicile is a deeper, sticky concept used in many common-law systems (e.g., the UK). It’s where you intend to live indefinitely. You can switch your domicile of choice, but not easily or quickly.

Nationality matters when a country allows you to choose the law of your citizenship in a will. That’s where a second passport can be powerful.

2) Law of the asset: situs

Real estate almost always follows the law of the place where it’s located.

Company shares, bank accounts, art, and yachts can be more flexible but frequently tie back to the place of incorporation, the governing law of the account, or physical location.

3) Marital and partnership property regimes

Community property vs. separate property, prenuptial agreements, and civil partnerships all influence what’s actually in your estate at death.

You can’t leave what you don’t own. Getting the marital property regime right is as critical as the will itself.

Where citizenship by investment moves the needle

Choosing your succession law under EU rules

If you’re habitually resident in an EU country that applies the EU Succession Regulation (most EU states except Denmark and Ireland), you can include a clause in your will choosing “the law of the State whose nationality you possess.” A second passport—whether from St Kitts & Nevis, Malta, or Dominica—qualifies.

Why this is valuable: Many civil-law countries enforce forced-heirship rights for children and spouses. Choosing the law of a nationality that permits testamentary freedom can bypass or soften those rules for your worldwide estate.

Caveats:

The UK and Ireland don’t apply the Regulation (though they respect foreign wills). You may still face English situs rules for UK real estate.

France introduced a protective rule in 2021 allowing children who are EU residents to claim a compensatory share from French assets even if a foreign law is chosen. This can claw back gifts and disadvantage disinherited children.

Some non-EU countries won’t yield on local immovable property, even if a foreign law is chosen.

Practical tip: If avoiding forced heirship is your priority, acquiring a nationality with broad testamentary freedom (many common-law countries) is typically more useful than choosing a nationality whose law includes forced shares.

Domicile and tax residency—what actually shifts

A second citizenship doesn’t toggle your domicile. You need to move, put down roots, and change your center of life for a new domicile of choice. Courts look at your home, family, business, membership, even where your pets live. I’ve seen HMRC in the UK spend years arguing that a person never shed their UK domicile, keeping the estate fully in the UK inheritance tax net.

Tax residency affects income and capital gains tax; inheritance/estate taxes are more often tied to domicile and/or situs.

A second passport can support a genuine relocation that shifts domicile over time, but it’s not a substitute for evidence of intent and permanence.

Probate access and court options

In Caribbean common-law CBI countries, probate can be relatively streamlined, especially when assets are held locally or through entities governed by local law.

Some jurisdictions offer English-language courts (e.g., Malta, Caribbean) and recognize trusts and common wealth planning tools.

Structuring landscape: trusts, foundations, companies

Malta, St Kitts & Nevis, and other CBI states have modern trust/foundation laws and experienced service providers.

If your chosen citizenship country recognizes trusts robustly, you can set up structures governed by that law to hold assets in other countries—often making succession more predictable.

Tax environment considerations

Most Caribbean CBI countries have no inheritance or estate tax. Malta has no inheritance tax but levies stamp duty on transfers of Maltese real property and shares in Maltese companies. Türkiye levies inheritance/gift taxes at progressive rates.

This matters once you are within that tax net (by domicile, residence, or situs), not merely because you hold a passport.

Country snapshots: what your new passport implies

The Caribbean five (St Kitts & Nevis, Antigua & Barbuda, Dominica, Grenada, Saint Lucia)

Succession law: Common-law systems with broad testamentary freedom. No forced-heirship regime.

Inheritance/estate tax: None in these jurisdictions, though fees and stamp duties may apply to real estate transfers.

Planning takeaways:

A Caribbean passport is potent for EU choice-of-law planning if you reside in an EU member applying the Regulation and want testamentary freedom.

Holding regional assets (bank accounts, shares in local companies) can ease probate and keep local matters local.

Domicile: If you aim to shift domicile there, align your life—home, ties, club memberships, and business interests—to make the change credible.

Malta

Succession law: Civil law influences with some reserved portions (forced-heirship style) for close family under Maltese law. Testamentary freedom is not absolute.

Taxes: No inheritance tax, but stamp duty (commonly up to 5%) on transfers of Maltese real estate and certain shares. No wealth tax.

Trusts/foundations: Strong trust framework; Malta is Hague Trusts Convention-compliant; also has private foundations.

Planning takeaways:

If you choose Maltese law under the EU Regulation, be sure that aligns with your goals; Maltese law may protect heirs.

Malta is excellent for administering trusts/foundations and coordinating EU probate, but you’ll still need to plan for the situs law of foreign real estate.

Türkiye

Succession law: Civil law with reserved portions for heirs; testamentary freedom is restricted.

Taxes: Inheritance and gift tax applies at progressive rates; rates depend on relationship and value bands.

Planning takeaways:

Turkish nationality alone won’t help avoid forced heirship where you reside in the EU; choosing Turkish law would typically preserve reserved shares.

Consider using non-Turkish structures and choice-of-law clauses pointing to a nationality with testamentary freedom if you also hold that citizenship and live in the EU.

Vanuatu

Succession law: Mixed system with significant flexibility; trusts are available.

Taxes: No income, capital gains, or inheritance taxes.

Planning takeaways:

Useful for structuring and for EU choice-of-law planning if you reside in an EU state applying the Regulation.

Bank and compliance practicalities matter—work with institutions comfortable with Vanuatu KYC/AML standards.

Note: Cyprus ended its citizenship-by-investment program in 2020. Its succession framework blends EU rules with local law; the island abolished estate duty years ago but has forced-heirship features for domiciled persons. If you already hold Cypriot citizenship, get advice specific to your residence and asset locations.

How effects differ by asset type

Real estate: Almost always governed by the law of the place where the property is located. A Spanish villa will bring Spanish rules into play regardless of your passport. A choice-of-law clause may help overall estate administration, but local rules often anchor immovables.

Bank accounts and portfolio assets: More flexible. Custody agreements sometimes designate governing law for non-probate transfers (e.g., payable-on-death). Still, the estate’s personal law and the bank’s jurisdiction will be relevant.

Company shares: Governed by the law of the company’s incorporation and any shareholders’ agreement. Holding operating businesses through a holding company in your new citizenship jurisdiction can simplify succession.

Digital assets and crypto: Access and transfer depend on keys and platform terms rather than nationality. Use a legally robust memorandum with key custody procedures and appoint an executor with the right powers.

Case studies from practice

1) French-resident founder with a St Kitts & Nevis passport

Jean lives in Paris with a significant brokerage account, a Delaware LLC, and a holiday apartment in Nice. He acquires St Kitts & Nevis citizenship. In his French will, he chooses the law of St Kitts & Nevis under the EU Succession Regulation to gain testamentary freedom and leaves the bulk to his partner, with cash legacies to his adult children.

What works: For his brokerage account and non-French assets, the chosen common-law system lends flexibility. The will is valid, and probate centers on a single law.

The wrinkles: France’s 2021 rule allows children who are EU residents to claim a reserved portion from French assets. They press a claim against the Nice apartment’s value. The St Kitts choice helps for non-French assets but can’t fully sidestep a French clawback.

Lessons:

If avoiding French forced heirship on French real estate is a priority, consider holding the property via a company, or rebalancing asset locations, or providing compensatory life insurance.

Don’t ignore French inheritance tax, which still applies based on heir relationship and French situs assets.

2) Spain-loving professional with Maltese citizenship

A German professional habitually resident in Barcelona obtains Maltese citizenship. She hopes to avoid Spain’s forced-heirship tendencies by choosing Maltese law.

Reality check: Choosing Maltese law may not solve the issue because Maltese law itself contains reserved portions. She gains administrative clarity but not complete testamentary freedom.

A better route: If she also holds a nationality with testamentary freedom (e.g., a Caribbean CBI passport), choosing that law could offer broader freedom—subject to Spanish acceptance and any local mandatory rules. She should also consider how Catalan succession law interacts with the EU Regulation.

3) UK-domiciled investor considering Caribbean CBI to escape UK IHT

A long-term UK resident wants to reduce the 40% UK inheritance tax exposure. He considers acquiring Antigua & Barbuda citizenship.

The misconception: A second passport doesn’t change UK domicile. Without genuinely leaving the UK and establishing a domicile of choice elsewhere (with sustained evidence over years), the UK IHT net remains.

Realistic plan:

Move to a jurisdiction without estate tax, build substantial ties there, and document intention to remain indefinitely.

Use trusts and life insurance as appropriate before becoming deemed-domiciled in the UK, if planning ahead.

Expect HMRC to scrutinize; maintain files of property leases, club resignations, school enrollments, and travel patterns showing permanence outside the UK.

Taxes: inheritance, estate, and gift—how they actually apply

Estate tax vs. inheritance tax:

Estate tax is levied on the estate before distribution (e.g., US federal estate tax).

Inheritance tax is levied on the recipient (e.g., many EU countries).

Triggers:

Domicile or habitual residence of the deceased.

Location of assets (e.g., US real estate is in scope for US estate tax even for non-residents; exemptions are low for non-resident non-citizens).

Heir’s residence (some systems tax the recipient if resident locally).

Double tax treaties:

Far fewer exist for estate/inheritance than for income tax. Where absent, credit relief can be limited or ad hoc.

Planning levers:

Match asset locations to favorable regimes (e.g., avoid holding heavy situs-tax assets in high-tax jurisdictions).

Use life insurance to fund liabilities and equalize heirs.

Consider corporate wrappers where appropriate, but weigh look-through rules and anti-avoidance.

CBI tie-in: If you can genuinely shift your domicile or habitual residence to a no-IHT jurisdiction that aligns with your citizenship strategy, the tax benefits can be substantial. Citizenship alone, though, won’t carry the load.

Tools for structuring a cross-border estate

Multiple wills, carefully drafted

Use separate wills for different jurisdictions when you have complex asset spreads, ensuring they don’t accidentally revoke each other.

Include a choice-of-law clause where available (e.g., “I choose the law of [Nationality] to govern my succession” under EU rules).

Coordinate executors and powers: banks and registries often demand specific wording.

Trusts and foundations

Trusts: Ideal for common-law environments and recognized in many civil-law countries with varying tax treatments. Check local recognition; for example, some civil-law countries tax certain trust transfers harshly or treat trusts as transparent.

Foundations: Useful in civil-law contexts where trusts are unfamiliar. Malta, Liechtenstein, and Panama are common choices.

Governance and letters of wishes: Put substance behind the structure—professional trustees, independent protectors, and clear intent.

Holding companies and funds

Use companies in jurisdictions aligned with your citizenship choice to consolidate assets and ease probate (share transfers can be simpler than real estate transfers).

For operating businesses, adopt shareholders’ agreements with death and incapacity clauses (buy-sell, valuation, funding).

Life insurance and beneficiary designations

In many systems, insurance proceeds bypass probate and pay directly to named beneficiaries. That can provide liquidity to cover taxes and keep family disputes at bay.

Confirm the policy’s governing law and whether local forced-heirship claims can reach the proceeds.

Marital agreements and property regimes

If you’ve married or remarried across borders, align your marital property agreement with your succession plan. The EU Matrimonial Property Regulations allow choice of law in some cases; use them.

Guardianship and incapacity planning

If you have minor children, nominate guardians in each relevant jurisdiction; not all courts will defer to foreign orders.

Put durable powers of attorney and health directives in place in your key countries.

Digital and hard-to-transfer assets

Catalog crypto wallets, domain names, intellectual property, and social media. Give executors legal and technical pathways for access consistent with privacy laws.

Step-by-step playbook after obtaining citizenship by investment

1) Map your life and assets

List every asset, its location, title form, and estimated value. Include insurance, pensions, and private equity positions.

Note where you spend time, where children go to school, and where your primary residence truly is.

2) Define your goals

Are you trying to avoid forced heirship, reduce taxes, speed probate, protect a family business, or support a specific heir?

3) Identify governing laws

For each asset, identify the situs law. For your person, determine habitual residence and domicile.

Check whether the EU Succession Regulation applies to you and whether you can choose the law of your new citizenship.

4) Pick your applicable succession law (if available)

If you live in an EU country applying the Regulation, decide which nationality’s law best serves your goals and include that clause in your will(s).

5) Decide on will architecture

One global will with a choice-of-law clause, or multiple local wills? For complex estates with real estate in several countries, multiple coordinated wills are safer.

6) Layer structures

Use trusts, foundations, or holding companies where they simplify transfers and shield against disputes.

Ensure compliance with controlled foreign company (CFC), substance, and anti-avoidance rules.

7) Address taxes realistically

Model inheritance/estate tax exposure based on domicile, situs, and heir relationships.

Add life insurance or liquidity strategies to meet known liabilities.

8) Lock in marital property alignment

Execute or update prenuptial/postnuptial agreements to match your succession plan. Register where required.

9) Fortify administration

Appoint executors and trustees who can operate across borders. Give them powers suited to each jurisdiction’s demands.

Store documents securely and make a clear access plan for digital accounts.

10) Review and refresh

Revisit your plan after major life events, law changes, or relocations. A two-year review cycle catches most issues early.

Common mistakes—and how to avoid them

Assuming citizenship equals tax residency or domicile

Fix: Build genuine ties if you intend to shift domicile. Keep meticulous evidence.

Choosing a nationality’s law that still has forced heirship

Fix: If testamentary freedom is your goal, select a nationality with the legal flexibility you want before drafting your will.

Using a single will for everything

Fix: For multi-country real estate or business holdings, use coordinated wills tailored to local probate.

Ignoring situs rules for property

Fix: Accept that local law often governs real estate. Use companies, funding, or alternative asset locations if needed.

Forgetting family property regimes

Fix: Align marital agreements and community/separate property status with your succession plan.

Overlooking compliance and reporting

Fix: Structures must comply with CRS/FATCA and local anti-avoidance rules. Work with advisors who cross-check reporting.

Poor executor selection

Fix: Choose executors with cross-border experience or appoint professionals. Consider a corporate executor for complex estates.

No liquidity for taxes and expenses

Fix: Earmark cash or insurance, especially where tax bills arrive before asset sales are practical.

FAQs I hear most

Does a second citizenship automatically cut my inheritance taxes?

No. Taxes depend on domicile, residence, and asset location. Citizenship can support a relocation strategy but doesn’t do the heavy lifting on its own.

Can I pick the law of my new citizenship in the EU?

Often yes. Under the EU Succession Regulation, you can choose the law of any nationality you hold in your will, and it will usually govern your worldwide estate, with some public-policy carve-outs and special treatment for local real estate in certain countries.

Will forced heirship disappear if I choose a common-law nationality’s law?

It may for much of your movable estate in participating EU states, but local rules (e.g., for real estate) and protective statutes (like France’s 2021 measure) can limit the effect.

What about the UK?

The UK isn’t bound by the EU Succession Regulation. English law generally respects foreign wills and offers testamentary freedom, but UK situs assets, particularly real estate, are anchored by local law. UK inheritance tax depends heavily on domicile.

Do Caribbean CBI countries charge inheritance tax?

No, the main Caribbean CBI states do not levy inheritance or estate taxes, though transaction duties exist. This only helps if you’re within their tax net or if assets are situated there.

Can I use a DIFC or ADGM will in the UAE to apply my chosen law?

For non-Muslims with UAE connections, DIFC/ADGM wills can be effective planning tools and can reference your national law. Citizenship can influence which personal law you point to, but you still need a real nexus to the UAE for those wills to be practical.

Will my kids automatically become citizens through CBI and does that affect inheritance?

Many CBI programs allow dependent children to be included or added later. Their citizenship rarely changes inheritance outcomes unless they become resident/domiciled in another country with different tax rules.

Practical checklist and timelines

Within 30 days of receiving your new passport:

Inform your legal and tax advisors.

Start asset and residence mapping.

Decide whether to keep or retire existing wills.

Within 90 days:

Draft new will(s) with any choice-of-law clause.

Decide on trusts/foundations or holding companies if needed.

Align beneficiary designations and powers of attorney.

Within 6 months:

Implement marital property agreements.

Restructure ownership of selected assets for probate efficiency.

Add life insurance or liquidity measures.

Ongoing:

Track days in each country and maintain domicile evidence if relocating.

Review plans biennially or after life events.

Strategy notes from practice

Build “one primary law” clarity: Even where you must respect local rules for certain assets, having a central law selected in your main will reduces friction and legal fees. Executors love clarity.

Respect the assets that won’t budge: If your biggest asset is a family villa in a forced-heirship jurisdiction, plan around it—lifetime transfers, co-ownership structures, or a corporate wrapper may help, but assess tax and substance carefully.

Don’t let tax wag the dog: Families fracture over forced-heirship disputes more often than over tax bills. Sometimes the best move is to accept some tax in exchange for a structure that your heirs understand and will respect.

Keep philanthropy in view: If you plan sizable charitable bequests, ensure the chosen law recognizes them cleanly and that the charity can receive across borders without unnecessary withholding or approvals.

Key takeaways you can act on

Citizenship by investment doesn’t run your succession, but it can give you the steering wheel—especially via choice-of-law provisions in the EU and access to robust structuring regimes.

For freedom from forced heirship, the most effective pairing is residence in an EU country that applies the Succession Regulation plus a nationality that offers testamentary freedom, documented in a clear will.

Taxes follow domicile and situs. If tax efficiency is a primary goal, align where you live and where assets sit with a jurisdiction’s rules—your passport alone won’t do it.

Real estate anchors everything. Plan around property located in countries that won’t yield to foreign succession choices.

Precision beats complexity. Clean will architecture, aligned marital property agreements, executor empowerment, and adequate liquidity solve most cross-border problems before they start.

If you take the time to re-map your estate after a CBI, you can keep the mobility and security benefits you wanted and add something families value even more: a smooth, predictable legacy.