Ascend Israel Properties
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Ascend Israel Properties
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What happens to your Israeli apartment when you die — and how the dual-jurisdiction reality of foreign ownership requires planning your home-country attorney almost certainly has not addressed.
When a US-based client first asked me what would happen to her Tel Aviv apartment when she died, I gave her the answer that most Israeli real estate attorneys give: "Your heirs will need to go through Israeli probate, and depending on your will, the apartment will pass to whoever you designated." Her response was the question that taught me how this practice area is supposed to be handled. "And what about my US trust? My estate plan in New York puts everything into a revocable trust to avoid probate. Does that work in Israel?"
It does not. Or rather — it works partially, with consequences her New York attorney had not flagged because Israeli succession law was outside that attorney's competence. The conversation became a six-month project of restructuring, two new wills, and a careful unwinding of certain trust provisions. We saved her family a multi-year probate dispute and a six-figure tax exposure. We also saved them from finding out about the problem during the worst week of their lives.
This article walks through what foreign owners of Israeli property need to know about inheritance and estate planning. It is not a substitute for working with both an Israeli attorney and a home-country estate planner — that coordination is the actual deliverable. But it lays out the framework, surfaces the questions you should be asking, and identifies the planning structures that work best for the diaspora-buyer profiles we serve at Ascend.
Real estate is governed by the law of the jurisdiction where the property sits. This rule — known as lex situs in international law — is virtually universal across modern legal systems, and Israel applies it strictly. Your Israeli apartment is governed by Israeli succession law, registered in the Israeli Tabu (Land Registry), and its transfer at death is administered by the Israeli probate system, regardless of where you lived, where your will was drafted, or what trust structures hold your other assets.
This is the rule that surprises American and Canadian buyers most. In US estate planning, a revocable trust funded with real estate avoids probate entirely. The trust owns the property; on the grantor's death, the successor trustee transfers the property to beneficiaries without court involvement. The mechanism is so reliable that most US estate plans rely on it. In Israel, this mechanism does not work the same way. Israeli courts will recognize a US trust as the registered owner if the property is properly registered in the trust's name, but the transfer to beneficiaries on the grantor's death is not automatic — it still requires Israeli administrative process.
The practical implication: foreign owners need an Israeli succession plan in addition to their home-country plan. The two plans must be coordinated. Drafted independently, they can conflict; one can revoke the other; assets can fall through the cracks; and the family ends up litigating in two jurisdictions simultaneously during a period when they should be grieving.
Israel imposes no estate tax and no inheritance tax. There is no Israeli equivalent of the US federal estate tax (40% above the exemption), the UK inheritance tax (40% above the nil-rate band), or the Canadian deemed-disposition rules at death. This is genuinely favorable for foreign owners and significantly different from the tax treatment in most home-country jurisdictions.
However, what Israel does tax is the heir's eventual sale of the property. When the original owner dies, the heir generally inherits the property at the original owner's tax basis — the price the deceased originally paid plus certain adjustments — rather than at the property's market value on the date of death. This is the opposite of the US "step-up in basis" rule that most American clients assume will apply.
The consequence is significant. Imagine a US-based parent who purchased a Tel Aviv apartment in 2015 for ₪2 million and dies in 2030 when the apartment is worth ₪5 million. In the US, the heir's basis would step up to ₪5 million, eliminating the embedded gain. In Israel, the heir's basis remains at the parent's ₪2 million purchase price (with limited inflation adjustment), and when the heir eventually sells the apartment for ₪5 million, they owe Mas Shevach (capital gains tax) at 25 percent of the real gain — potentially hundreds of thousands of shekels in Israeli tax that would have been avoided under US rules. This is a major planning consideration that almost no home-country estate plan addresses.
For families with strong intentions to hold the Israeli property across generations, gifting the property to the eventual heir during the owner's lifetime — rather than passing it through inheritance — can avoid the basis-carryover problem and trigger preferential gift-transfer tax rates. The gifter is exempt from capital gains tax under Section 62 of Israel's Real Estate Tax Law, and the recipient pays one-third of the standard Mas Rechisha purchase tax rate. We walk through this structure in detail below.
When an owner of Israeli property dies, the property cannot transfer to the heirs simply because a will exists or the family has agreed who should inherit. Israeli law requires either an inheritance order (Tzav Yerusha) when there is no will, or a probate order (Tzav Kiyum Tzava'ah) when there is a will, before the Tabu will register the heirs as the new owners.
These orders are issued by the Israeli Inheritance Registrar — an administrative body — for uncontested estates, or by Israeli family courts for contested ones. The process for an uncontested foreign-owner estate typically takes four to nine months from filing to order. For contested estates or estates with foreign-language documentation requiring extensive translation and authentication, the timeline can extend to 18 months or more.
Documents required almost always include: the original will (if any), authenticated copies of the death certificate, certified Hebrew translations of all foreign documents, apostilled copies of identifying documentation for all heirs, and the Tabu extract showing the deceased as the current registered owner. Each of these documents has specific procedural requirements that home-country attorneys are typically not familiar with. Errors at this stage cause months of delay.
During the probate period, the apartment cannot be sold, mortgaged, leased, or substantially modified without court approval. Tenants in residence retain their leases. Arnona, Va'ad Bayit, and other ongoing costs continue to accrue and must be paid by the estate. Many families choose to designate one heir or a professional executor to manage the property during this window; without such designation, decisions can become contested among heirs.
Israeli courts will generally recognize a foreign will as a valid testamentary instrument for Israeli property, provided three conditions are met. First, the will is properly executed under the laws of the testator's home jurisdiction. Second, the will is properly translated into Hebrew by a certified translator and authenticated. Third, the foreign will does not conflict with mandatory provisions of Israeli law, particularly around the forced heirship rules that apply in some circumstances.
The translation and authentication process is non-trivial. A US will drafted in English must be translated into Hebrew by a court-recognized translator, then either authenticated through the Israeli consulate in the testator's home country (a process called consular legalization) or apostilled under the Hague Apostille Convention. Both pathways take weeks and cost ₪3,000 to ₪8,000. The translation must be precise — ambiguities in English wills become significantly worse in Hebrew translation, and Israeli courts will sometimes reject translations they consider materially imprecise.
More problematic, foreign wills sometimes contain provisions that have no Israeli equivalent or that conflict with Israeli law. A US revocable trust referenced as the residuary beneficiary can be administered by Israeli courts, but the procedural complications add months. A UK will containing a discretionary trust for grandchildren can work, but the trustee must satisfy Israeli registration requirements that differ from UK practice. These issues are best identified and resolved during the testator's lifetime, not after death.
For most foreign owners of Israeli property, the cleanest structure is a separate Israeli will covering only Israeli assets, drafted in Hebrew under Israeli law, executed before two Israeli witnesses or before an Israeli notary, and coordinated with the home-country will so the two do not conflict.
The Israeli will eliminates the translation and authentication delays, eliminates ambiguity about which legal regime applies, and dramatically simplifies Israeli probate. The home-country will continues to govern home-country assets. The two are coordinated through explicit clauses in each that limit their scope to the relevant jurisdiction's assets, preventing any inadvertent revocation.
We recommend this structure for nearly every Ascend client who buys a property of meaningful value in Israel. The Israeli will costs ₪2,500 to ₪5,000 to draft and execute properly. The savings in eventual probate complexity easily justify this cost, often by an order of magnitude. We coordinate the drafting with our partner Israeli estate counsel and with the client's home-country estate attorney to ensure the two wills work together rather than against each other.
The Israeli will should be deposited with the Israeli Inheritance Registrar during the testator's lifetime. Deposit is voluntary but creates an authoritative record that prevents disputes about the will's authenticity at death. Cost is nominal — under ₪200 — and the deposit can be done by the drafting attorney.
For families intending to hold Israeli property across generations, transferring the property to the eventual heir during the owner's lifetime can be more tax-efficient than passing it at death. Israeli law treats lifetime transfers between close family members preferentially in two ways.
First, the gifter is exempt from capital gains tax (Mas Shevach) under Section 62 of the Real Estate Tax Law when the recipient is a defined close family member — spouse, child, grandchild, parent, grandparent, or sibling. The gain that has accumulated in the property is not realized by the gifter at the time of the gift. This is a meaningful difference from a sale to the same person, which would trigger Mas Shevach at 25 percent of the real gain.
Second, the recipient pays Mas Rechisha (purchase tax) at one-third of the standard rate applicable to the recipient. For a recipient who would otherwise pay the foreign-buyer rate of 8 percent, this becomes approximately 2.67 percent. For a recipient who is an Israeli first-time buyer, the rate becomes approximately 1.17 percent on the relevant brackets. On a ₪3 million apartment transferred to a foreign-resident child, the Mas Rechisha drops from ₪240,000 to roughly ₪80,000 — a savings of ₪160,000.
However, the recipient inherits the gifter's tax basis, just as in a death-transfer. The embedded gain is not eliminated; it is deferred until the recipient sells. For families intending to hold the property long-term, this is not a problem — the deferred gain may never be realized. For families anticipating the heir might sell, the basis-carryover should be modeled before deciding on the gifting structure.
A typical client structure: parent purchases the Israeli apartment in their own name, holds for 5 to 15 years while market-appreciation accumulates, then gifts the apartment to an adult child during a defined window in the parent's life when the child has clarified their long-term plans. The gift triggers reduced Mas Rechisha for the child, no Mas Shevach for the parent, and positions the apartment in the child's hands for the next holding period. The parent retains usufruct rights through a separate agreement if they wish to continue using the apartment during their lifetime.
US citizens and US residents are subject to US federal estate tax on their worldwide assets at death, including their Israeli real estate. The 2026 federal estate tax exemption stands at approximately $13.99 million per individual ($27.98 million for married couples), and the rate above the exemption is 40 percent. Tax legislation passed in 2025 made this exemption level permanent rather than allowing it to revert as had been scheduled under the original Tax Cuts and Jobs Act of 2017 — consult a US estate attorney for the most current figures. Clients with estates approaching or above these thresholds should plan accordingly — the elevated exemption is now a stable, permanent planning baseline rather than a time-limited provision.
The US-Israel Tax Treaty does not include estate tax provisions; the two countries have not negotiated an estate tax treaty. This means there is no foreign tax credit available against US estate tax for any tax-equivalent paid in Israel — and Israel imposes no such tax to credit anyway. The Israeli apartment's full market value at the date of death is included in the US estate for federal estate tax purposes. For US-citizen owners with significant net worth, this is the primary estate planning concern, and it requires US-led planning that incorporates the Israeli property as one asset within the broader estate.
Common US planning structures for clients with Israeli real estate include: holding the Israeli property through an irrevocable life insurance trust funded to cover the eventual estate tax liability; using the lifetime gift exemption to transfer the Israeli property out of the taxable estate during the owner's lifetime; or holding the property within a structured family limited partnership where valuation discounts at transfer can reduce the taxable estate value. Each of these has Israeli legal implications that must be analyzed carefully — what works in US estate planning sometimes does not work cleanly in Israel.
For UK owners, the principal concern is UK inheritance tax (IHT) at 40 percent on estates above the nil-rate band (£325,000 plus the residence nil-rate band where applicable). UK domicile rules apply: an owner who is UK-domiciled at death is liable to UK IHT on worldwide assets including the Israeli property. The UK does have a tax treaty with Israel covering income and capital gains, but no estate tax treaty exists. Planning typically involves potentially exempt transfers (PETs) during the owner's lifetime, holding the property within structured trusts, or in some cases changing UK domicile through long-term residence in another jurisdiction.
For Canadian owners, the principal concern is the deemed disposition at death under the Income Tax Act. Canada does not have an estate tax per se, but treats death as a deemed sale of the deceased's assets at fair market value, triggering capital gains tax on accumulated appreciation. The Canadian-Israeli Tax Treaty allows Canadian credit against the Israeli Mas Shevach the heir will eventually pay, but timing and coordination matter. Spousal rollovers under Canadian law can defer the deemed disposition for transfers between spouses.
For Australian owners, the principal concern is the capital gains tax (CGT) consequences of death. Australia does not impose an estate tax, but the deceased's CGT cost base is generally inherited by the beneficiary, and CGT is triggered when the beneficiary sells. The Australian-Israeli Tax Treaty governs the interaction, and credit against Israeli Mas Shevach is available where double taxation would otherwise occur. Australian self-managed super funds (SMSFs) holding Israeli real estate raise additional complexity beyond the scope of this article.
Whether or not you adopt the separate-Israeli-will structure, certain documents should be in place from the moment you take title to your Israeli property. We recommend the following minimum set:
The most common mistake. The home-country will may be valid in Israel but creates months of additional probate complexity, translation costs, and authentication delays. A separate Israeli will solves this for a fraction of the eventual cost.
US revocable trusts work cleanly for US property; for Israeli property, they create administrative complications that vary case by case. The trust may need to register with Israeli authorities, the trustee may need to satisfy Israeli requirements, and the transfer to beneficiaries on death requires Israeli process. Sometimes the trust structure works well; sometimes it adds friction. Either way, the analysis must happen before the property goes into the trust, not after.
An Israeli will drafted without coordination with the home-country will can inadvertently revoke the home-country will, or vice versa. The standard solution is explicit limitation language in each will, but many home-country attorneys are not familiar with this requirement and miss it. Both wills must reference each other and must explicitly limit their scope.
Foreign owners who later make Aliyah and become Israeli residents face fundamentally changed estate planning circumstances. The Israeli will may no longer be limited to "Israeli assets" if the owner now has primarily Israeli assets. The home-country will may no longer apply at all. Aliyah triggers a complete review and typically a redraft of both instruments.
Israel does not have community-property rules of the kind that exist in some US states (California, Texas, Arizona) or in Civil Law jurisdictions. Israeli law applies a presumption of common ownership between spouses for property acquired during the marriage, but with significant nuances and exceptions. Foreign owners coming from community-property jurisdictions sometimes assume their home-state rules will apply in Israel; they generally do not.
Estate planning for Israeli property is not the kind of work that should be done at the closing table — it is too important and too coordination-intensive. Our practice is to surface the estate planning conversation during the pre-purchase phase, identify the structures appropriate for each client's profile (US, UK, Canadian, Australian residency, family configuration, intentions for the property), and coordinate the drafting between an Israeli estate attorney we work with closely and the client's home-country estate counsel.
For most clients, the resulting plan involves: an Israeli will scoped to Israeli assets, a coordinated home-country will, a power of attorney for Israeli matters, and a clearly documented ownership structure that has been reviewed for both home-country and Israeli implications. The cost is modest in absolute terms — typically ₪7,500 to ₪15,000 for the Israeli component plus whatever the home-country attorney charges — and the value is substantial. Families that spend this money during the buyer's lifetime do not spend it many times over during the buyer's death.
If you own Israeli property and have not yet completed this planning, the conversation is overdue. If you are considering purchasing Israeli property, the time to begin the conversation is during the pre-purchase phase, not after closing. We are happy to walk through your specific situation in an initial consultation; the question of how to leave the property to your family is one we treat as central, not peripheral, to the ownership decision.
Israel does not impose any estate tax or inheritance tax at the death of the owner. There is no Israeli equivalent of US federal estate tax, UK inheritance tax, or Canadian deemed-disposition rules. However, Israeli tax law applies a basis-carryover rule rather than the step-up in basis used in the US. The heir inherits the property at the deceased owner's original purchase price (with limited inflation adjustment), meaning the embedded gain accumulated during the deceased's ownership is preserved and will be taxed when the heir eventually sells. This can result in significant Mas Shevach (capital gains tax at 25 percent of the real gain) on a sale that an American or UK heir might assume would be tax-free under home-country rules.
Israeli courts will generally recognize a foreign will as a valid testamentary instrument for Israeli property if three conditions are met: the will is properly executed under home-country law, it is translated into Hebrew by a certified translator, and it does not conflict with mandatory Israeli law provisions. The translation and consular authentication process is non-trivial — typically several weeks and ₪3,000 to ₪8,000. More problematic, foreign wills sometimes contain provisions (revocable trusts, complex discretionary structures) that have no Israeli equivalent, requiring case-by-case court interpretation. For these reasons, we recommend nearly every foreign owner of Israeli property execute a separate Israeli will limited to Israeli assets, coordinated with the home-country will. The Israeli will costs ₪2,500 to ₪5,000 to draft and saves substantial cost and delay at the eventual probate.
A US revocable living trust can hold title to Israeli real estate, and the property can be registered in the Tabu in the trust's name. However, the standard US benefit of avoiding probate by funding the trust does not work cleanly in Israel — the trust still requires Israeli administrative process for transfer to beneficiaries on the grantor's death. Israeli courts will recognize the trust but treat the transfer through Israeli succession procedures. For some families this is acceptable; for others it eliminates the main reason the trust was created. The analysis should happen before the property goes into the trust, not after. We coordinate this analysis with US trust counsel for any Ascend client where this question arises.
Israeli law treats lifetime transfers between close family members preferentially. Under Section 62 of the Real Estate Tax Law, the giver is fully exempt from capital gains tax (Mas Shevach) when transferring to a defined close family member: spouse, child, grandchild, parent, grandparent, or sibling. The recipient pays Mas Rechisha at one-third of the standard rate that would otherwise apply to them. For a recipient who would otherwise pay the foreign-buyer rate of 8 percent, this drops to approximately 2.67 percent. On a ₪3 million apartment, the savings versus a sale are typically ₪150,000 to ₪200,000. However, the recipient inherits the giver's tax basis, so embedded gain is deferred rather than eliminated. The structure works best for families intending long-term holds and where the giver is comfortable transferring control during their lifetime.
The Israeli probate timeline depends heavily on the quality of advance planning. For an uncontested estate where the deceased had a properly executed Israeli will and the heirs are well-documented, the inheritance order or probate order typically issues within four to nine months from filing. For estates with only a foreign will requiring translation and authentication, the timeline extends six months or more. For contested estates — disputed wills, missing heirs, ambiguous beneficiary designations — Israeli family courts may require 18 months or more to resolve. During the probate period, the apartment cannot be sold or substantially modified without court approval. This is why advance planning matters: an Israeli will and properly maintained documentation can reduce the probate timeline by half or more.
The minimum set of documents heirs need: an authenticated copy of the death certificate; the original Israeli will, if one exists, ideally already deposited with the Inheritance Registrar; the Tabu extract showing the deceased as the registered owner; the original purchase contract and Mas Rechisha receipt; certified Hebrew translations of any foreign documents; apostilled identifying documentation for all heirs; the contact details of the Israeli attorney handling the estate; and access details for any Israeli bank account associated with the property. Beyond these legal essentials, heirs should also have a list of professionals involved with the property — building manager, property manager, insurance broker — and ideally a written summary of any rental arrangements, ongoing obligations, and recent expenses. Maintaining this file during the owner's lifetime saves heirs months of detective work at the worst possible time.
Joint ownership between spouses (usually as joint tenants with right of survivorship or in Israel as ba'alut meshutefet) creates automatic transfer to the surviving spouse on the first death without going through probate, which is often the desired outcome. However, joint ownership also has implications for home-country estate tax (the joint ownership may or may not split the property's value between the spouses' estates depending on jurisdiction), for capital gains basis (the surviving spouse may inherit a partial step-up depending on home-country rules), and for the Israeli succession regime that applies on the second death. For US-citizen couples, joint ownership often makes sense; for couples with mixed citizenships or with significant other estate planning structures, the analysis is more complex. We routinely review the titling decision before the deed is registered, and revising titling after the fact involves fees and potential tax consequences that advance planning avoids.
Aliyah is a significant inflection point for estate planning. Your tax residency moves to Israel, your home-country will may no longer apply to most of your assets, your Israeli will may no longer be appropriately scoped to "Israeli assets only" because most of your assets are now Israeli, and home-country estate tax may continue to apply for a transitional period (US citizens remain subject to US estate tax indefinitely; UK domicile takes years to shed). The post-Aliyah estate planning review is typically more involved than the pre-Aliyah one. We recommend clients schedule this review within the first six months of Aliyah, working with both Israeli and home-country counsel to redraft as needed. Olim Hadashim also gain access to certain tax structures unavailable to non-residents that can favorably restructure the estate.
Israeli law permits charitable bequests of real estate to qualified recipients. The recipient charity must be either an Israeli registered charity (Amuta with appropriate tax status) or a foreign charity that has been recognized by the Israeli Tax Authority for cross-border charitable transfers. Some popular American charities are not currently qualified for direct Israeli bequests, and the practical workaround is either to make the bequest to an Israeli affiliate of the charity or to liquidate the property in the will and bequeath the proceeds. Charitable bequests of Israeli real estate carry favorable tax treatment, including potential Mas Shevach exemption, but the structure must be set up properly during the testator's lifetime to capture the benefits. We coordinate with both Israeli charity counsel and home-country counsel for clients with charitable intentions involving Israeli property.
Ascend Israel Properties guides international buyers from the US, Canada, UK, Australia, and Europe through every stage of the Israeli property acquisition process — legal, financial, and logistical.
Schedule a ConsultationLegal Disclaimer. This article is provided for informational purposes only and does not constitute legal, tax, or estate planning advice. Estate planning involves highly individualized analysis of family circumstances, tax residency, asset configuration, and home-country and Israeli legal frameworks that are continually evolving. The structures described here may or may not be appropriate for any specific situation, and they require coordination between qualified Israeli estate counsel and qualified home-country estate counsel. Tax codes, treaty interpretations, and probate procedures change. Before making any estate planning decision involving Israeli real estate, consult with attorneys qualified in both jurisdictions. Ascend Israel Properties and the author do not assume liability for the accuracy or completeness of information contained herein or for any actions taken in reliance on this article. Information current as of April 26, 2026.