In an increasingly globalised world, many Australians move overseas for extended periods of time, enter into relationships with foreign individuals and engage with international businesses, often acquiring property in those situations. Approximately 30% of Australia’s population was born overseas, and many of those people retain assets in their country of birth or inherit property overseas. International estate planning is a crucial part of the legal and financial strategy for people with cross-border assets.
International wills
In 1973, the international community developed the Convention Providing a Uniform Law on the Form of an International Will which was designed to harmonise the rules surrounding the validity and enforceability of wills across different jurisdictions. The idea is that as long as a will adheres to the specific legal formalities of the Convention, it will be recognised by all countries that are parties to the Convention, streamlining the administration process and preventing delays in the distribution of assets. Having an internationally recognised will means that all assets are accounted for in one document and there are no gaps in the estate planning. In addition, the legal costs involved in preparing one will are generally less than preparing multiple wills.
Australia is a party to the Convention and all Australian jurisdictions have introduced domestic legislation necessary to recognize international wills. However, Australia is one of only twelve countries that have done so, greatly limiting the scope of the Convention. The other countries are Belgium, Boznia-Herzegovina, Croatia, Cyrpus, Ecuador, France, Italy, Libya, Niger, Portugal and Slovenia. In Canada and the United States, some jurisdictions have passed the requisite legislation, and others have not.
Multiple wills
If you have assets in a jurisdiction that has not passed domestic legislation to recognise the Convention, then an international will may not be helpful, and you may want to consider having multiple wills instead. In each jurisdiction where you have assets, you can have a will that deals with those assets. The benefits of having multiple wills are that you can have a local executor in each jurisdiction, it can be written in the local language, and it can be written in accordance with local estate laws. There are downsides to this approach though – as well as the increased cost of preparing multiple wills, there is a risk that they could conflict with each other if not properly drafted, or that one will could revoke another. There is also a risk that assets might fall through the gaps, creating a partial intestacy. In this case, the executors would need to follow the procedure relevant to their jurisdiction.
Conclusion
If you have real or personal property outside of Australia, consider speaking to our lawyers about your unique circumstances to determine whether it would be advantageous to write an international will or whether it makes more sense for you to have multiple wills. You should regularly review and update your will or wills as your financial or family situations change. Seeking the advice of experienced estate planning professions will help you ensure that your estate administration process is streamlined and cost-effective.