Having no Will at all is an incredibly risky situation to be in. However, the reality is that even with a valid Australian Will, there may be complications where overseas assets are involved.
It’s a small world after all
So went the lyrics penned in 1963 by the Sherman brothers for the Disney company – well received then and even more applicable today. The diverse multicultural society that constitutes Australia means that it is extremely common for residents here to have parents and other relatives living overseas. Equally, Australians often spend years away from this land working as expatriates in other countries or enjoying holiday homes and the like on foreign shores.
In decades past, an Australian Will that expressed intentions regarding the distribution of an estate held entirely within Australia was all that was needed in most cases. These days, circumstances can be far more complicated.
Why does it matter?
In some countries, including Australia, the law looks at the nature of the assets. Movable assets such as bank accounts or shares fall under the auspices of where the deceased has been domiciled. Immovable assets such as real estate are treated under the law of the country where the property is located.
Other countries do not differentiate by the nature of the asset, treating all the same, and the applicable law is that of the country of the deceased’s citizenship.
Some jurisdictions also have inheritance tax, whereas in Australia we do not. While here, even though some categories of people may challenge a Will, we are free to distribute our estate more or less as we please. Elsewhere, forced heirship may be in play, where a certain proportion of an estate must be passed to some classes of beneficiaries.
How then, should these potential complications be handled?
An ‘International Will’? Jurisdictions matter
Australia has acceded to the Convention Providing a Uniform Law on the Form of an International Will 1973 – thus providing a standard form of Will that would be recognised as valid in all countries that are party to the Convention. Therein lies one difficulty – not all countries are party to the Convention.
Further, while the Convention provides uniformity on the form of the Will, it does not address or override local rules and requirements including matters of inheritance, family provisions, and tax, to name a few.
That said, an International Will may be appropriate if the majority of assets are held in Australia and perhaps a smaller asset such as a bank account is held overseas in a signatory country.
A Will in every country?
It may well be wise to have a Will in place in every country in which significant assets are held, and in so doing receive legal advice from a practitioner in that country who is well-versed in local requirements. This assists in the need to have the original of a Will held locally, and further, simplifies the application for probate of the Will in the country in which it was made and allows probate to be applied for concurrently in different jurisdictions.
One caution that would require attention, and communication between the lawyers involved, is to ensure that a Will does not inadvertently revoke the intentions of another Will held elsewhere, and that its instructions are limited to assets held in that country.
Estate planning with assets overseas requires care to ensure successful implementation of your wishes. Sound advice is vital.