Administering an Israeli Estate from Abroad: A Practical Roadmap

The Scope of Estate Administration

Estate administration (nihul eizavon) is the process of identifying, valuing, securing, and ultimately distributing the assets of a deceased person's estate. For non-residents, this process is managed almost entirely through an Israeli attorney armed with a power of attorney.

Effective administration requires acting on multiple fronts simultaneously — legal proceedings, asset management, tax obligations, and communication across time zones and languages.

Immediate Steps After Death (First 30 Days)

1. Secure the Deceased's Israeli Assets

The first priority is preventing loss, dissipation, or unauthorized access to estate assets:

• Bank accounts: Contact the deceased's Israeli banks to place a protective hold (Israeli banks are usually cooperative once presented with a death certificate)
• Real estate: Ensure the property is secure; arrange for a property manager if needed; update insurance
• Business interests: If the deceased owned shares in an Israeli company, notify the company and relevant parties to prevent unauthorized transactions
• Safe deposit boxes: Request the bank to seal the box pending the probate order

2. Locate Israeli Assets

Compile a complete inventory:

• Bank accounts: The Israeli Tax Authority can provide a summary of accounts through your attorney; banks will respond to attorney inquiries with a death certificate
• Real estate: Search the Israeli Land Registry (Tabu) by the deceased's identity number
• Shares: Check with Israeli companies and the Tel Aviv Stock Exchange for registered shareholdings
• Government bonds / savings: Check with the Israeli Postal Bank and National Savings
• Life insurance policies: Check for policies with Israeli insurers
• Unclaimed assets: The Israeli Unclaimed Assets Law requires dormant accounts to be transferred to the state after several years; the Accountant General maintains a searchable database

3. Engage an Israeli Attorney

Grant the attorney a comprehensive power of attorney covering all estate-related actions:

• Filing probate applications
• Representing before courts and government agencies
• Accessing bank accounts and safe deposit boxes
• Executing real estate transfers
• Filing tax returns

The power of attorney must be notarized and apostilled in your country of residence before use in Israel.

Ongoing Administration

Tax Compliance During Administration

The estate is a separate legal entity for tax purposes during the administration period. Tax obligations include:

• Filing the deceased's final income tax return for the year of death
• Reporting and paying capital gains tax if estate assets are sold during administration
• VAT obligations if the deceased operated a business
• Estate assets generating income (rent, dividends) may require ongoing tax filings

Managing Israeli Property During Administration

If the estate includes real estate, the administrator must decide whether to:

• Maintain the property pending distribution — arrange property management, pay municipal tax (arnona), maintain insurance, collect existing rental income
• Sell during administration — possible if all heirs consent; tax planning considerations apply
• Transfer to heirs — requires the probate order and Land Registry registration

Rental income earned during the administration period is taxable. The administrator or attorney should ensure proper reporting.

Distribution of the Estate

Once the probate or inheritance order is obtained:

Bank Assets

Present the court order to each Israeli bank. The bank will:

1. Verify the order and your identity
2. Conduct an AML review (for significant balances)
3. Release funds — either to an Israeli account designated by the heirs or via international wire transfer

Expected timeline: 2–6 weeks per bank, assuming no AML complications.

Real Estate

The attorney files a transfer application at the Land Registry with:

• The probate/inheritance order
• The heir's passport/identity documents
• Real estate tax clearance certificates (from the municipal authority and Israeli Tax Authority)

Expected timeline: 2–6 weeks for a standard unencumbered property.

Business Interests

Shares in Israeli private companies are transferred by notifying the company and updating the shareholder register. Publicly traded shares are transferred through a stockbroker.

Estate Administrator's Liability

Administrators owe duties to all beneficiaries. Key points:

• An administrator must not distribute assets before obtaining the probate order
• An administrator must not favor some beneficiaries over others
• If an administrator misappropriates estate assets, they are personally liable
• Courts can remove and replace administrators who breach their duties

For non-resident estates where there is any risk of conflict among heirs, appointing a neutral professional administrator (rather than one of the heirs) is advisable.