Israel does not tax inheritance. The inheritance tax was abolished in 1981, there is no gift tax on cash or investments, and receiving a bequest is not a tax event. The work is legal, not fiscal: the Succession Law 5725-1965 governs every asset located in Israel, whoever owns it, and no bank, land registry, or pension fund releases anything without an Israeli Probate Order or Succession Order, which takes 3 to 12 months in uncontested cases and costs ₪1,500 to ₪4,000 in court fees plus ₪20,000 to ₪50,000 in standard attorney fees. Foreign probate orders are not recognized, so you need a separate Israeli will for Israeli assets. The tax danger is imported: US citizens face 40% federal estate tax above a $15,000,000 exemption in 2026, and former UK residents can stay inside 40% UK inheritance tax for up to 10 years after leaving. Burial itself is free: Bituach Leumi funds a basic burial for everyone who dies in Israel.
Most retirees who move here arrive with a will written in New Jersey or London and assume it travels. It does not, at least not usably: the day one spouse dies, the Israeli bank freezes the account, the apartment cannot be sold or transferred, and the family discovers that even a fully probated American estate must start again in an Israeli court, in Hebrew, with notarized translations. Estate planning in Israel is not about beating a tax that does not exist; it is about sparing your heirs a year of cross-border bureaucracy with five signed documents. This page is the map: what the law does by default, which papers change the outcome, and where your real tax exposure sits. It is part of our master guide to retirement in Israel.
No Israeli inheritance tax, no gift tax, and one deferred bill
There is no Israeli inheritance tax, no estate tax, and no gift tax, and that has been true since the inheritance tax was abolished in 1981. Proposals to bring it back surface in the Knesset from time to time; none has passed and none is scheduled. Gifts of cash and investments to Israeli-resident recipients are not taxed either, and a gift of real estate to a close relative pays purchase tax at roughly one third of the normal rate rather than any gift tax (the normal brackets are in our full guide to Israel’s purchase tax).
The trap is that inheriting defers tax rather than erasing it. Heirs take over the deceased’s original purchase price, so when they later sell inherited Israeli real estate, capital gains tax (mas shevach) runs from the day the parent bought, not the day the child inherited, and non-resident heirs typically cannot claim the owner-occupier exemption. Our estimate: an heir who sells an apartment the parent bought for ₪800,000 in 2006 at ₪2,400,000 in 2026 owes roughly ₪320,000 in mas shevach (basis: 25% of a real gain of about ₪1.28 million, after indexing the parent’s cost for roughly 40% cumulative inflation since 2006). One US wrinkle: a US person who receives more than $100,000 from a foreign estate must file IRS Form 3520, a reporting form with heavy penalties for silence, not a tax. How the rest of your money is treated while you are alive sits in our guide to how retirement income and savings are taxed in Israel.
The court order nobody budgets for
Israeli institutions do not act on a death certificate. Every bank account, apartment, and registered asset stays frozen until the family obtains a Probate Order (when there is a valid will) or a Succession Order (when there is not) from the Family Court or the Inheritance Registrar. Uncontested cases take 3 to 12 months. Foreign probate orders carry no weight here: an estate fully settled in the US or UK still starts a fresh Israeli proceeding, with every foreign document translated into Hebrew and notarized or apostilled.
Two rules surprise almost every Anglo family. First, joint bank accounts and jointly owned property do not pass automatically to the surviving partner; the deceased’s share goes through the estate and needs a court order, unlike US or UK survivorship accounts. Second, the process has a real price. Our estimate: probating a standard ₪3 million estate costs ₪25,000 to ₪63,000 all-in, about 0.8% to 2.1% of the estate (basis: standard attorney fees of ₪20,000 to ₪50,000 plus 18% VAT, plus the ₪1,500 to ₪4,000 court fee). Complex or high-value estates are billed at 1.5% to 3% of estate value plus VAT.
Inheritance law in Israel: who gets what when there is no will
Inheritance law in Israel is codified in the Succession Law 5725-1965, and when someone dies without a valid will it distributes the estate on a fixed ladder:
| Who survives | How the estate splits |
|---|---|
| Spouse and children | Spouse 50%; children share 50% equally |
| Spouse and parents (no children) | Spouse 50%; parents 50% |
| Spouse and siblings (no children or parents) | Spouse two thirds; siblings one third |
| Spouse only | Spouse 100% |
| Children only | Children share 100% equally |
| Parents only, or siblings only | 100% to that group, split equally |
| No relatives | The State of Israel inherits |
Three details decide real family outcomes. Stepchildren who were never legally adopted have zero intestate rights; they inherit only if a will names them. Legally adopted children and children born outside marriage inherit exactly like any other child. And minor children are protected heirs: a will can shrink a minor’s share below the intestate amount but cannot wipe it out. Blended families and second marriages are exactly where these defaults fail people, and the deeper tools (trusts, beneficiary forms, prenups) live one level down in the beneficiaries guide linked below.
Israeli wills: four legal formats, one obvious pick
Israeli wills come in four formats under the Succession Law, and all four are fully valid:
- Witnessed will: typed, signed before two witnesses who also sign. The standard choice for English speakers and the hardest to challenge.
- Handwritten will: entirely in the testator’s own handwriting, signed and dated, no witnesses. Simple, but easy to attack on authenticity.
- Will before an authority: declared orally to a judge, notary, or court registrar and recorded. Built for people who cannot write.
- Oral deathbed will: valid only when death is imminent, declared before two witnesses who write it down immediately. Courts construe it strictly.
Anyone 18 or older (or married) and of sound mind can make one, and Israel gives near-total testamentary freedom: apart from the protected minimum for minor children, you may leave assets to anyone. Draft in Hebrew or English; whichever language the court does not receive as the original will need a notarized translation later, which is why many lawyers prepare both versions at once. A gift in a will to one of its witnesses (or that witness’s spouse) is automatically void, and lodging the will with the Registrar for safekeeping costs nothing. One warning for couples: mutual wills can legally bind the surviving spouse, so the wording matters more than the sentiment.
Cross-border wills: one worldwide will or one for each country
Cross-border wills are where most expat estate plans go wrong. Israel recognizes a foreign will if it satisfies the law of the place it was signed, the testator’s national law, the domicile law, or Israeli law, but recognition is not execution: the foreign will still has to go through the Israeli court, translated and apostilled. And a US revocable living trust, however elegant it is at home, moves nothing here: Israeli banks and the Land Registry will not transfer assets on a trust document, only on a court order. Israeli law also governs Israeli real estate regardless of where the owner lives or dies.
| One worldwide will | Separate will per country | |
|---|---|---|
| Probate | Every country probates the same document, each waiting on translations of the others’ paperwork | Each estate runs locally and in parallel |
| Cost and speed in Israel | Translation, notarization, and apostille on the whole file | A Hebrew or English original goes straight to the Registrar |
| Main risk | One document must satisfy several legal systems at once | A new will accidentally revoking the others |
| Verdict | Workable only for single-country estates | Best practice: an Israeli will for Israeli assets, cross-referenced so no will revokes another |
Foreign inheritance tax exposure: the US and UK follow you here
Israel taking nothing does not mean your heirs pay nothing, and foreign inheritance tax exposure is the single biggest estate issue for American and British retirees here. US citizens and green card holders owe US federal estate tax on worldwide assets, wherever they live, at 40% above the exemption; there is no US-Israel estate tax treaty to soften it. Former UK residents are caught by the Long-Term UK Resident test that replaced domicile on 6 April 2025: anyone who was UK tax-resident for 10 of the previous 20 tax years keeps worldwide UK inheritance tax exposure for up to 10 years after leaving.
| 2026 figure | United States | United Kingdom |
|---|---|---|
| Tax-free threshold | $15,000,000 per person ($30,000,000 per couple), permanent and inflation-indexed | £325,000 nil-rate band (frozen to April 2031) plus £175,000 residence band for a home left to descendants; up to £1,000,000 per couple |
| Rate above it | 40% | 40% |
| Who is caught | Citizens and green card holders on worldwide assets; non-resident aliens on US-sited assets above just $60,000 | Long-Term UK Residents (10 of the last 20 tax years), with a tail of up to 10 years after departure |
| Gifting room | $19,000 per recipient per year; $194,000 per year to a non-citizen spouse | £3,000 per year, plus gifts that fall out of the estate 7 years after they are made |
Our estimate of what the UK tail costs a real family: a couple who made aliyah in 2020 after 15 years in London, leaving a £1,500,000 estate including their home to the children, would owe £200,000 in UK inheritance tax if the second death lands before the tail ends around 2030 (basis: 40% on the £500,000 above the couple’s combined £1,000,000 thresholds). The same estate after the tail expires owes the UK nothing, which makes the calendar itself a planning tool. When you became an Israeli tax resident drives all of this, and that clock is set by the choices covered in our guide to residency and aliyah options for retirees.
Three documents that act before the will does
A will only speaks at death, and only after a court validates it. Three other instruments act earlier or skip the court entirely; each has its own dedicated guide.
- Beneficiary forms beat the will. Israeli pension funds, provident funds (kupot gemel), and life insurance pay whoever is named on the fund administrator’s own form, directly and with no probate. A beneficiary named only in your will does not bind the fund, and an outdated form (an ex-spouse, a deceased parent) beats a fresh will. Bank accounts and real estate, by contrast, always go through the estate. Forms, trusts, and keeping assets with the right children are covered in beneficiary designations, trusts, and protecting an inheritance in Israel.
- A continuing power of attorney costs ₪1,000 to ₪2,500 and replaces guardianship proceedings that run ₪10,000 to ₪30,000 and beyond. The yipui koach mitmashech, on the books since 2017, lets you appoint in advance who runs your finances, medical care, and daily affairs if you lose capacity; it must be signed with a Ministry of Justice accredited lawyer while you are still competent. Advance medical directives (available from age 17) and the medical proxy complete the set, all walked through in the continuing power of attorney, medical proxy, and living will in Israel.
- Burial is already paid for. Bituach Leumi funds a basic burial (plot, transport, graveside service) for every person who dies in Israel, tourists included, and for Israeli residents who die abroad; the hotline is *0120. Families pay only for extras, starting with the headstone at ₪3,000 to ₪15,000. Plots, upgrades, and civil burial are priced out in burial rights, costs, and choices in Israel, and the agency footing the bill is explained in our guide to Bituach Leumi ages, rates, and rules.
Five terms your lawyer will use in the first meeting
- Probate Order (tzav kiyum tzavaa): the court order validating a will so banks and registries will act on it.
- Succession Order (tzav yerusha): the court order distributing an estate with no valid will, following the Succession Law ladder.
- Mas shevach: Israel’s capital gains tax on real estate, measured from the original purchase date even for heirs.
- Yipui koach mitmashech: the continuing power of attorney that pre-appoints who manages your affairs if you lose capacity.
- Long-Term UK Resident (LTUR): the UK test in force since April 2025 (10 of the last 20 tax years) that keeps worldwide UK inheritance tax exposure alive for up to 10 years after you leave.
The six-line audit before you meet a lawyer
- Count your wills: one per country where you hold assets, each cross-referencing the others, none revoking another.
- Pull the beneficiary form from every pension fund, provident fund, and life insurance policy, and confirm the named person is alive, current, and intended.
- Sign and register your continuing power of attorney and advance directives while everyone involved is healthy; once capacity is lost it is legally too late.
- US persons: measure your worldwide estate against the $15,000,000 exemption and file Form 3520 for any foreign inheritance over $100,000. Former UK residents: count your UK tax years and date-stamp the end of your 10-year tail.
- List digital accounts and crypto keys in a sealed appendix to your will; Israel’s Digital Content Access After Death Law (in force since 23 July 2025) makes digital content inheritable, but no court order can recover crypto without the keys.
- Tell your heirs where the original wills sit and that no Israeli bank releases a shekel without a court order. Surprise is the most expensive part of probate.
Straight answers on tax, wills, and who inherits
Does Israel have an inheritance tax?
No. It was abolished in 1981, and there is no gift tax either. The only later bill is capital gains when heirs sell, measured from the deceased’s original purchase date.
Is my American or British will valid in Israel?
Usually valid on paper, useless in practice without an Israeli proceeding: the will must go through an Israeli court with notarized Hebrew translations. A separate Israeli will covering only Israeli assets is faster and cheaper.
Does our joint bank account pass automatically to the survivor?
No. Israeli law treats each holder as owning a proportionate share; the deceased’s share enters the estate and is released only by court order.
Do my stepchildren inherit from me?
Not unless your will names them or you legally adopted them. Under the intestate rules stepchildren receive nothing.
I left the UK when I made aliyah. Is my estate out of UK inheritance tax?
Only after the tail runs out. If you were UK tax-resident for 10 of the 20 tax years before leaving, your worldwide estate stays in scope for up to 10 years after departure.
Check the primary sources yourself
Figures on this page reflect the 2026 legal position. Last verified: July 2026.
- Bituach Leumi (English): burial and survivor rights
- IRS: Form 3520, reporting foreign gifts and inheritances
- GOV.UK: how UK inheritance tax works
Get the biggest asset into the plan
In most Israeli estates the apartment is the largest line by far, and how you buy it (whose name goes on the title, sole home or investment property, resident or foreign buyer) decides both the purchase tax today and how cleanly it transfers tomorrow. If a home in Israel is part of your retirement plan, tell us your budget and cities and we will shortlist properties and flag the ownership questions worth putting to your lawyer before you sign.
