Estate Planning for Expats: Navigating Multiple Jurisdictions

When Australians live abroad or own international assets, estate planning takes on additional layers of complexity. Varying local laws, potential double taxation, and the need to coordinate multiple wills or probate proceedings can present significant challenges. This article outlines key considerations for expats dealing with multi-jurisdictional estate matters, highlighting cross-border legal issues, tax implications, and practical steps to ensure assets are protected and distributed according to your wishes.

The Expat Estate Planning Challenge

Australians living overseas (or owning foreign property) must often juggle multiple legal frameworks. Unlike a straightforward domestic will, expat estate planning may require:

• Recognising local inheritance laws in the host country (such as forced heirship or civil law principles).
• Maintaining or updating an Australian will for assets located in Australia, and possibly creating a separate will in the foreign jurisdiction.
• Addressing different tax regimes—capital gains, inheritance, or estate taxes—that may apply to cross-border transfers.

Why Coordination Matters

Failing to coordinate across jurisdictions can result in:

• Conflicts or duplication (two wills inadvertently revoking each other).
• Missed tax efficiencies, possibly incurring double tax on the same asset.
• Delays in probate or distribution if courts in different countries require separate proceedings.

Key Insight: A carefully structured plan acknowledges each country’s laws and ensures all estate documents work together seamlessly.

Understanding Cross-Border Legal Issues

Differing Legal Systems

Australia follows a common law tradition with testamentary freedom (subject to family provision claims). Other countries might have:

• Forced Heirship (e.g., many civil law countries in Europe) requiring mandatory shares for children or spouse.
• Community Property principles (some US states) dictating spousal entitlements to half the marital property.

Why This Matters: If you hold property in a forced heirship jurisdiction, your Australian will instructions might conflict with local laws, potentially invalidating aspects of your distribution plan.

Multiple Wills vs. Single International Will

• One Will Covering All Assets: Simpler in concept but may complicate probate in each country, especially if the law or language differs significantly.
• Separate Wills per Jurisdiction: Potentially more efficient but requires careful drafting to avoid mutual revocation or contradictory instructions.

Advice: Consult an international estate specialist or multiple solicitors (one in Australia, one in each foreign location) to confirm the best approach.

Choosing the Right Will Strategy

Below is a table comparing the “Single Will” approach versus “Multiple Wills” for expats:

Note: If you adopt separate wills, ensure each will includes explicit language that it only applies to the assets in X jurisdiction and does not revoke the other.

Tax Implications and Pitfalls

Australian Tax Considerations

1. Deemed Residency for Tax Purposes
   • Even if you live abroad, the ATO might consider you an Australian tax resident depending on ties or length of overseas stay. Confirm your tax residency status to determine if your global income remains taxable in Australia.
2. CGT on Worldwide Assets
   • When an Australian tax resident dies, their global assets could face capital gains tax events. Alternatively, if you’re a non-resident, CGT might apply only to specific Australian property or assets.

Inheritance or Estate Taxes Abroad

• No Inheritance Tax in Australia: Australia doesn’t impose a direct inheritance tax, but other countries (e.g., UK, US, parts of Europe) might.
• Double Tax Risk: Failing to plan could subject assets to foreign estate tax plus potential Australian CGT. Investigate double taxation treaties or methods to claim credits.

Advice: Skilled tax advisors can map out whether you face inheritance taxes overseas and confirm how to offset or manage them under bilateral tax treaties.

Coordinating Multiple Jurisdictions

Lodging Probate or “Resealing”

• Resealing: If you obtain probate in one country (e.g., Australia), you might need to “reseal” that grant in another jurisdiction to gain authority over local assets.
• Full Probate in Each Country: In some places, resealing isn’t recognized, requiring separate probate proceedings. This naturally extends timelines and costs.

Engaging Local Professionals

Using local solicitors or trust companies who understand local inheritance rules speeds up estate settlement. They can also handle language or notary requirements if official translations or apostilles are needed.

Practical Example: Australian Expat with UK Real Estate

Scenario: Emma, an Australian living in London, retains a property in Brisbane plus a London apartment. She’s uncertain whether to set up an Australian will for the Brisbane house and a separate UK will for the London apartment.

1. Legal Advice: Emma’s solicitor suggests dual wills—one for Australian assets, the other for UK real estate—explicitly stating each will only governs assets in its respective country.
2. Tax Analysis: The UK has inheritance tax for estates above a threshold; Australia has no inheritance tax but might levy CGT if Emma sells the Brisbane home.
3. Executor Coordination: Emma appoints her sister as the executor for the Queensland will, while a London-based friend acts for her UK will, ensuring local knowledge in each domain.

Outcome: Emma’s plan prevents cross-border confusion, meets separate legal demands, and clarifies distribution for each property.

Checklist for Expat Estate Planning

Below is a table offering a concise step-by-step approach:

Note: Each step might require assistance from both an Australian legal/tax advisor and foreign professionals.

Frequently Asked Questions

1. Is an “international will” recognized in every country?
   Some countries have signed the UNIDROIT Convention on international wills, but not all. Even then, local probate processes can complicate acceptance. It’s safer to confirm local legal recognition.
2. If I return to Australia permanently, do I need to revoke foreign wills?
   Possibly, yes. If they only address foreign property, you can keep them, but ensure your new or updated Australian will doesn’t accidentally revoke them if you still own overseas assets.
3. Which country has priority if multiple probate applications happen?
   Generally, each country’s court deals with local assets. There’s no universal “priority.” Communication among executors and possibly a principal estate jurisdiction might be needed to avoid duplication or conflict.
4. Are there unique considerations for superannuation or trusts if I’m living overseas?
   Yes. Superannuation typically remains subject to Australian laws, though tax treatment may differ if you’re a non-resident. Family trusts may face residency rules; non-resident trustees can complicate compliance.
5. Can forced heirship laws override my Australian will for overseas property?
   Potentially. If real property sits in a forced heirship jurisdiction (e.g., some EU countries), local law might limit your testamentary freedom. That portion must be allocated per forced heirship rules, regardless of the Australian will’s statements.

Expat estate planning requires a broader lens than typical domestic strategies, bridging international wills or multi-jurisdiction compliance with each country’s probate rules and taxes. Australians living abroad—or those simply holding foreign assets—should carefully coordinate each piece of the puzzle.

Key Points

1. Identify All Assets Internationally: Distinguish which country’s law applies to each property.
2. Choose Will Structure: Evaluate single vs. separate wills, mindful of forced heirship or local legal quirks.
3. Address Tax & Residency: Align distributions to avoid double taxation, confirm if you remain an Australian tax resident.
4. Name Suitable Executors: Possibly have local executors or solicitors for each jurisdiction if using multiple wills.
5. Review & Update: If you move again, purchase new foreign property, or laws change, adapt your plan promptly.

Through diligent cross-border planning, expats can protect their wealth, minimise confusion for heirs, and ensure their final wishes are honoured in all the places they call (or once called) home.

1. Succession Act 1981 (Qld) – Governing will validity and administration in Queensland.
2. Queensland Courts – Official guidance on probate processes in QLD.
3. Department of Foreign Affairs and Trade (Australia) – Consular advice for Australians with overseas property.
4. International Conventions (e.g., Hague Conventions, UNIDROIT) – Some frameworks for cross-border recognition of wills.