Owning Overseas Assets and making an Australian Will document

Owning Overseas Assets and making an Australian Will document

No Problem, when you know what you're doing; Concurrent Wills and the Hague Convention on Foreign Documents.

Read in this article

Enter Protective Will documents & The International Hague Convention

Australia is a multicultural country and many of our new citizens may have major assets owned in overseas countries. Additionally, people who migrated here for employment reasons with their company, may purchase a property in Australia but still have assets in their original country of birth.

When it comes to practical estate planning, if you have assets in Australia, then you need to have a valid Australian Will to ensure your Australian assets are distributed to your spouse and loved ones, in accordance with your wishes.

The problem may be how do you legally deal with assets in Australia and overseas in an appropriate manner?

A Protective Will, available from Sapience Financial, answers this question.

A Protective Will document is specifically drafted by our lawyers to comply with the international Hague Convention on Foreign Documents, and recognized in any country who a signatory is. (At the time of this article some 83 country signatories exist). Signatories to this convention agree to common standards designed to help in managing estates across multiple legal systems to reduce legal troubles in international estate planning.

A single document legally drafted to comply with the convention is legally recognised in all signatory countries.

Why you can’t have multiple simple Will Documents

For people who take a DIY approach to their estate planning, when they make an Australian Will and then later return to the country of birth and make an overseas Will, an unusual problem begins.

At each time you sign a new Will document, that action can invalidate a previously held Will document.

For example,

• If you sign a Will document in Australia in January, and then travel to California in February where you sign a locally made Will document for your Californian assets, the new Californian Will document once signed, invalidates the Australian Will previously signed in January.
• If you then travel to Germany in March to sign a local Will document for your German assets, a signature on a local Will document then invalidates the document signed in California in February, that invalidated the one previously signed in Australia in January.

And so the silly cycle continues - unrecognised by the inexperienced DIY Will Maker.

Solutions & practical planning

The rule of thumb is you build the tax practical Will document in the high tax jurisdiction.

1. A solution is to create a Protective Will that complies with the international Hague Convention, for assets owned in those same countries.
2. Another approach some folks might take is to build a Will in Australia, that deals with Australian assets, and then build a separate Will overseas, that deals specifically with specific overseas assets, each Will document specifying each does not invalidate the other.

As to which solution is best for you - well that’s the $64 question, and one not answered by a quick fix Post Office Will Kit.

Concurrent Wills

If you have substantial assets overseas, the best practice may be to have a Will document in the country of those assets, made by a local expert, aware of the local tax implications of that country's asset disposal laws, addressing only those overseas assets.

• Concurrent Wills are where you prepare separate Wills for each country where you own assets.
• You make a Will that applies to specific assets, or assets in a particular country. 

These are called ‘concurrent Wills’. Your foreign Will is drafted carefully so it does not revoke your Australian Will.

A benefit of having a Will Document made in each country where you own significant assets, is each respective lawyer is an expert in their own jurisdiction so each Will document is structured with the most accurate and up to date advice and meets the respective death duty and property transfer requirements.

If you wish to ensure your Australian Protective Will Documents only deals with your Australian assets, the document can be modified to achieve this result. Your overseas Will document can then be drafted to match the same requirements to deal only with local overseas assets

Making Concurrent Wills may seem complicated, but isn’t

Why bother? Because it provides a faster distribution of the estate.

• This is important when there are tax concessions applied to assets of your estate that may only exist for a short time after your death.
• Concurrent Wills help avoid unintended consequences in distributing your estate in different countries. They avoid and reduce costs and taxes.

Do you want to check to see if all your personal assets are located within the 83 countries?

Only those 83 countries are signatories to the Hague Convention. If so, you do not need concurrent Wills. You then prepare one Will under the Hague Convention and you do not need a second Will for the other country.

Store your Will documents safely for life

Sapience Estate Planning clients have their signed Australian Will documents secured for life in a secured document register, so there are not issues with losing a document or allegations of tampering — just another reason why you use a Sapience Financial professional for your estate planning.

Postscript:
The Hague Convention of 5 October 1961 on the Conflicts of Laws Relating to the Form of Testamentary Dispositions is an international treaty. It makes simple the rules on Wills across different countries.

Drew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn.  Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.