Does owning foreign property affect your Will?
Yes. It’s important to understand that estate planning laws vary from country to country. Awareness of the laws and regulations in the country where your foreign assets are located is essential to safeguard these assets in your death. This is especially relevant in countries with forced heirship laws, which may dictate who inherits your assets, regardless of what your Will states. Regardless, planning ahead with foreign assets is an essential part of your estate planning within Australia. Below, we list a few top considerations for writing your will if you own assets overseas.
Considerations if you have assets overseas:
How will foreign assets be taxed after I die?
It’s also important to consider the different tax laws which will impose tax on your foreign assets after you die. From country to country, this can greatly affect the distribution of your assets and influence your estate planning ahead of time. For example, if a country has a high inheritance tax, it may be more beneficial to distribute your assets before your death to avoid the tax.
How does exchange rate affect estate planning for foreign assets?
Currency exchange rate can play a role in affecting the value of your assets and how you plan your estate in Australia. This might even encourage you to dispose of your foreign assets prior to death, and send the proceeds to Australia. It is however worth considering the tax implications of this strategy, and timing it with a favourable exchange rate.
What happens with probate and foreign assets?
Probates represent the legal process of distributing a person's assets after they pass away. The country in which your foreign assets are held will have specific laws and regulations regarding this probate process, each of which will affect the distribution of your assets differently.
Strategies to ease estate planning with foreign assets:
Should I consider separate Will for foreign assets?
In light of foreign tax, exchange rate and probate laws, it can be useful to have a separate Will in the country where your foreign assets are held. This can ease the distribution of your overseas assets, and allow you to appoint an executor in that jurisdiction to navigate these specific considerations. It provides extra protection for your foreign assets, and ensures that these are distributed according to your wishes after death.
Can a trust fund help estate planning with foreign assets?
Another way to mitigate the various issues related to different foreign laws, taxes and regulations is to create a trust- which holds assets for the benefit of a third party. This legal entity ensures your assets will be distributed according to your wishes, instead of the laws and regulations of the country where the assets are located.
To Wrap Up Estate PLanning with Foreign Assets
There's a lot to navigate when it comes to writing your will and planning your estate when you hold foreign assets:
Foreign tax laws
Consider a separate will
Consider a trust
And one more thing...
Even with all of these provisions made for, it's fundamentally essential to communicate your wishes clearly with beneficiaries and family. Integral to this communication, is having a clear and detailed Will which explains how you want your assets to be distributed.
Seek legal support when tackling the complex process of planning your estate with foreign assets. With this, Safewill can help. Offering an affordable, accessible and easy process to safeguard your assets.