How to Transfer Inherited Funds from Israel to Your Foreign Bank Account

Overview: Transferring Inherited Israeli Funds Internationally

One of the most common issues non-resident heirs face is the practical challenge of getting inherited money out of Israel. While Israel has no capital controls that specifically restrict inheritance transfers, Israeli banks are subject to strict anti-money laundering (AML) and Know-Your-Customer (KYC) regulations, which can make the process feel cumbersome.

This guide walks through the complete process, from initial account access to having funds in your foreign bank account.

Step 1: Obtain the Probate or Inheritance Order

Before any Israeli bank will allow you access to a deceased person's account, you must present the official court document establishing your right to the funds:

• Inheritance order (tzav yerusha) — if the deceased had no valid will
• Probate order (tzav kiyum tzava'ah) — if there is a valid will

No Israeli bank will release funds without this document. See our complete guide to the Israeli probate process for details.

Step 2: Present the Order to the Bank

Once you have the court order, you (or your Israeli attorney with power of attorney) present it to the bank branch where the account is held.

What to bring:

• Original probate/inheritance order
• Your passport or identity document
• Power of attorney (if acting through an attorney)
• Death certificate of the deceased

If you cannot travel to Israel, your attorney with a comprehensive power of attorney can handle all bank dealings on your behalf.

Step 3: AML Compliance — The Main Bottleneck

This is where most delays occur. Israeli banks are required under Israeli anti-money laundering laws to conduct due diligence on all significant transactions, including inheritance transfers.

The bank's compliance department will typically require:

• Source of wealth declaration — where did the deceased's money come from?
• Source of funds documentation — bank statements, salary records, business records of the deceased
• Your own AML documentation — proof of your identity and financial background
• Explanation of relationship to the deceased

This review can take 2–8 weeks, and sometimes longer for larger amounts. Be prepared for this delay — it is not unusual and does not indicate a problem.

Practical tip: Have your Israeli attorney prepare a comprehensive explanation letter for the bank's compliance team, addressing likely questions proactively. This often reduces the back-and-forth.

Step 4: Obtain Tax Clearance

While Israel has no inheritance tax, you should obtain confirmation from the Israeli Tax Authority (Rashut HaMisim) that there are no outstanding tax debts attached to the estate before transferring funds.

This is particularly important if:

• The deceased was a business owner or had business income
• Real estate was sold as part of the estate
• The estate includes capital gains assets

Your Israeli attorney can request this clearance directly from the Tax Authority.

Step 5: Execute the International Wire Transfer

Once the bank's compliance review is complete and tax clearance is obtained, you can instruct the bank to wire the funds to your foreign account.

Information you'll need to provide:

• Your foreign bank's SWIFT/BIC code
• Your foreign account IBAN or account number
• Your bank's correspondent bank details (for some countries)
• Your full name as it appears on the foreign account

Typical transfer fees:

• Israeli bank wire fee: NIS 50–250 per transfer
• Currency conversion: Israeli banks typically charge 1–3% above mid-market rate
• Consider using a currency specialist (like Wise or a specialist FX broker) for large amounts

Reporting Requirements in Your Home Country

Many countries require you to report large international wire transfers or inheritances received from abroad. For example:

• United States: FBAR filing if you hold a foreign account with over $10,000; Form 3520 for large foreign gifts/inheritances
• United Kingdom: You may need to report the inheritance on your Self Assessment tax return
• Canada: Foreign inheritance may need to be reported on T1135 if above CAD $100,000

Consult a tax advisor in your home country about your specific reporting obligations. Israeli inheritance itself is not typically taxable in most countries (as it is not income), but the assets and any subsequent income from them may be.

Working Without a Visit to Israel

Many non-residents successfully complete the entire process without visiting Israel by:

1. Granting a comprehensive power of attorney to an Israeli attorney
2. Apostilling the power of attorney in their home country
3. Having the attorney handle all court filings, bank dealings, and compliance documentation
4. Receiving funds by international wire transfer directly to their foreign account

This is the most common approach for non-residents and works well in practice, though it does require trusting your Israeli attorney with significant responsibilities.