Three Golden Rules for dealing with International Assets in an Estate Plan

26 September 2019

As we move towards becoming global citizens it is increasingly common to have to deal with assets outside Australia as part of the estate planning process.

While a Will can be drafted to apply to a Willmaker’s worldwide assets, it is important to carefully consider whether this is the most appropriate approach. 

Three golden rules to keep in mind are:

  1. If the overseas asset is real property it is vital to develop the estate plan in conjunction with a lawyer in that country

    Real estate assets are governed by the laws of the country in which they are situated, meaning that it will be the law in that country which dictates whether the Australian Will is recognised as validly dealing with property held there, or if a forced heirship or other regime applies.
  2. It may be possible to prepare the Australian Will so it is recognised as valid in other jurisdictions

    Moveable assets (which generally include everything except real estate) are governed by the laws of the country in which the Willmaker is domiciled at death. Domicile is determined as the country which the Willmaker intended to be their long term home, whether or not they were living there at the time of their death.

    For some countries it is possible to prepare the Australian Will in a manner that ensures it will be recognised as validly executed in that jurisdiction, pursuant to an International Wills Convention. However, not all countries are signatories to this convention.
  3. Multiple Wills may be most appropriate, but beware of revocation!

    Whilst it is possible for moveable assets overseas to be dealt with under an Australian Will, it may be worth having a Will in place in each country in which significant assets are owned, for the following reasons:

    a) The Will can be made in accordance with the laws of that country and prepared by a lawyer familiar with the succession laws of that country.  This is particularly important in countries where death taxes apply and strategies may be implemented to minimise the impact of such taxes; and

    b) The distribution of assets may be dealt with in a more efficient manner as the executors would only need to apply for probate of the Will in the country that it was made. This avoids the needs for the probate to be resealed in each country in which the Will is required to be proven, which could be time consuming and complicated. 

    If a decision is made to prepare Wills in multiple jurisdictions it will be important to ensure the Wills do not revoke each other, and the overseas Will is potentially limited to the assets in that jurisdiction.

Ideally, an estate plan involving overseas assets will be developed in conjunction with an appropriate legal practitioner in that jurisdiction, so that the best estate planning result can be achieved. 

How we can help

Moores Practice Leader, Krista Fitzgerald has recently completed an Advanced Certificate in Cross-Border Estates through STEP (Society of Trusts & Estates Practitioners) and as a member of this organisation has access to a network of overseas lawyers who practice in this area.

If you or your clients have international estate planning issues, Krista would be pleased to assist. Please do not hesitate to contact Krista on 03 9843 2153 or by filling out the enquiry form below.

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