Do You Have An Overseas Will? Why Having An Australian Will Is Still Vital
Posted by Paul Davies on 07/02/15 00:00
A Will is one of the most important documents you will sign and is a statement of your wishes to be executed when you pass away. Moving to Australia makes it even more important to consider, as estate planning across borders is a complex matter involving the interplay of taxation, succession and bankruptcy laws, so that any duties or taxes can be minimised, costs and expenses administering your estate reduced and the maximum benefits be provided to your beneficiaries.
Intestate means that you have died without making a valid Will. If you die without a Will, your wishes are not formally known and your estate will be distributed amongst your relatives according to the law. This could be very different from what ou intended to happen and could also cause complications, delays and extra costs for those you leave behind. It is important that you consider drafting a Will if you don’t already have one, or review your Will in light of your move to Australia, as your circumstances will have changed.
Importance of Domicile
Domicile refers to the country that a person treats as their permanent home, or lives in and has a substantial connection with. Your domicile determines what law applies to your estate. If you die domiciled in Australia, then Australian testamentary law will govern who receives your personal property, wherever located and your Australian real property. If you die domiciled elsewhere, then Australian law will only apply to your real property.
Migration to Australia and choosing Australia as your domicile is one way to avoid UK inheritance tax. To do this, you must prove your intention to make Australia your permanent home and you would need to convert to Australia permanent resident status at least 3 years before the date of death in order to avoid UK inheritance tax on your worldwide assets. Australia has no State or Federal death or gift duties. The Australian income tax and capital gains tax regime has eased in recent years, making Australia an attractive place to invest. Nevertheless, you need specialist tax advice for your particular circumstances.
Having a Will in Australia has considerable cost savings for your estate. These include;
- Your executors will not have to take out probate, a legal requirement for your property, in England, and get it resealed in Australia.
- They will also save on the costs of otherwise having to prove both your identity and the instructions in your Will
- Costs such as airfares to attend solicitors’ offices and/or Court in the UK.
You also have the benefit of having local executors and trustees.
Rebecca Fahey is the Principal of the Melbourne office of Smith Leonard Fahey Lawyers and has worked in the legal industry for over 15 years. This experience, including working with the international clients of bdhSterling, means that she is well versed in issues relating to estate planning. bdhSterling and Smith Leonard Fahey Lawyers work closely with you to ascertain your Estate Planning needs and implement the appropriate documentation and structures.
If you would like to discuss your situation further, please contact us or call your bdhSterling adviser directly.