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Family LawUnited States2021Cross-Border Inheritance Matter Involving US and Vietnam
Matter Value
Successfully Resolved
$1.2M
Successfully Resolved
Client Context
A first-generation Vietnamese-American family based in California. The deceased was a Vietnamese-American businesswoman in her seventies who had emigrated to the US in 1985 but maintained significant assets in Vietnam: an apartment in District 1, HCMC; a small commercial property in Da Nang; cash deposits at three Vietnamese banks; and a minority interest in a Vietnamese trading company. Total Vietnamese assets approximately USD 1.2M. The deceased had left a detailed will, executed in California, naming her three children as equal beneficiaries.
01
The Challenge
The deceased had passed away in California in 2020. Probate of the will in California was completed without issue in 2021. The challenge began when the family sought to transfer the Vietnamese assets to the three US-citizen heirs.
Under Vietnamese law, the California probate decision did not automatically transfer Vietnamese property to the heirs. A separate Vietnamese inheritance proceeding was required, applying Vietnamese inheritance rules to assets located in Vietnam. The family had assumed the California probate would be sufficient — and several months had elapsed before the issue was identified, during which the apartment had remained vacant, the commercial property's tenant had been paying rent into a frozen account, and the bank deposits were inaccessible.
Further complications: under Vietnamese law as it then stood, foreign nationals could inherit residential property only if they themselves were eligible to own such property. None of the three US-citizen heirs intended to live in Vietnam and were not separately eligible. This meant the residential property either had to be owned in some restructured form or liquidated and the proceeds remitted abroad, with the latter raising foreign-exchange-control questions about repatriation.
The trading-company interest raised a different question: minority interests held by foreign nationals required regulatory notification, and in this case the underlying company had not been informed of the deceased's passing.
02
Our Approach
We prepared a comprehensive Vietnamese inheritance proceeding combining: (1) recognition of the California probate decision and certified Vietnamese translation of the will; (2) formal Vietnamese inheritance filing identifying the heirs and the Vietnamese assets; (3) coordination with the District People's Committee for the relevant ward where each property was located; (4) communications with each Vietnamese bank to release the deposits; and (5) notification to the trading company of the change in beneficial ownership.
For the residential apartment, we structured a sale with the proceeds to be remitted abroad. We obtained advance approval from the State Bank of Vietnam for the foreign-exchange remittance under Article 8 of the Foreign Exchange Ordinance, supported by complete documentation of the underlying inheritance and the source of funds. The commercial property was sold to a domestic buyer with proceeds similarly remitted.
Throughout, we coordinated closely with the family's California probate counsel to ensure consistency between US and Vietnamese filings, and worked with US tax advisers on the basis-step-up implications and any US tax consequences of the distributions.
03
The Outcome
All Vietnamese assets were successfully transferred to the heirs within 14 months of engagement. The apartment sold for USD 520K (5% above pre-sale appraisal), the commercial property for USD 480K, and bank deposits totalling USD 180K were released. Trading-company interests were liquidated through company-arranged buy-back at fair market value of USD 60K. Total proceeds remitted to the heirs in California: approximately USD 1.18M after taxes, fees, and currency conversion costs. The family preserved approximately 98% of the original asset value through the cross-border process.
Lessons & Generalisable Insight
Cross-border inheritance is one of the most under-planned areas in Vietnamese-American family law. Many Vietnamese-Americans hold meaningful Vietnamese assets but assume their California or Texas wills will travel — they do not. Estate planning for clients with Vietnamese assets should include a Vietnam-specific component: either a separate Vietnamese will for the Vietnamese assets, or clear provisions in the home-country will that anticipate the Vietnamese inheritance procedure. Similarly, the foreign-exchange-control framework rewards advance approval and complete documentation; arriving at the State Bank with a partial file is a recipe for delay.
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