Interstate and Overseas Assets
When administering a deceased estate, the deceased’s domicile is an important factor, as this will establish the applicable jurisdiction. A deceased estate is probated in the jurisdiction that the testator lived in at the time of their death, or where the majority of their assets are held. This can pose a problem if a testator owned assets in several states or territories or in other countries. This article explores how interstate and overseas assets are dealt with in the administration of a deceased estate.
Domicile law refers to the location where the testator lived, had a connection to or kept a permanent residence. A testator is deemed a resident for domicile law purposes if they lived in a jurisdiction for a minimum of six months before they died. For instance, if a deceased Australian citizen had assets in NSW and France, but lived in Queensland for several years before passing away, then any moveable assets could be dealt with under Queensland succession law.
One of the first acts that an executor or administrator must perform is to compile a list of the deceased’s assets and collect them for safekeeping until they can be used to pay the estate’s liabilities and then distributed to the beneficiaries. When there are interstate assets, the executor must apply to the relevant Supreme Court in that jurisdiction for a reseal of the will. That means that in many jurisdictions an executor will have to advertise their intention to apply for a reseal prior to filing with the court. This reseal is legal recognition of the Grant of Probate or Letters of Administration issued by the other state or territory.
Overseas assets are often classified as “moveable” or “non-moveable” assets. The law of the testator’s permanent residence applies to moveable assets that are held outside Australia such as shares, art and funds held in bank accounts. Non—moveable assets, such as real estate, are governed by the relevant overseas law.
Australian wills are recognised in many countries. Commonwealth countries will typically reseal an Australian Grant of Probate. Australia is also a signatory to the UNIDROIT convention, which is signed by twenty countries. This means that many EU countries will allow a testator in Australia to apply Australian law to the assets held in the other country. For example, if a Victorian resident owns a property in France, they can choose to have it dealt with according to Victorian succession law.
The situation is more complicated in countries where there is no reciprocal recognition. In these countries, a person will generally have to appoint a foreign agent to deal with an overseas non-movable asset. For instance, if a testator in Queensland owns land in Beijing, Chinese law applies and the asset will have to be handled differently to the rest of the estate. In this situation, it would be wise to appoint a Chinese lawyer to deal with those assets.
Some movable assets held in other jurisdictions do not require a reseal. For instance, shares are “located” in whichever jurisdiction the company’s head office is registered in. A reseal of the Grant of Probate is not needed for such an asset unless there are also other assets located in the jurisdiction. The executor can simply send a certified copy of the Grant of Probate to the company with the appropriate forms.
If the deceased held a small amount of money in an interstate or overseas bank, it may not be necessary to apply for a reseal in that jurisdiction. Many banks have a policy that if the balance is less than a certain amount, it will turn over the asset upon receipt of a foreign Grant of Probate provided the executor is willing to sign documentation taking responsibility and waiving the bank’s liability.
Making A Foreign Will
A testator who holds assets overseas can choose to prepare a foreign will that will be probated and administrated in that jurisdiction. A foreign will is prepared by a solicitor in the jurisdiction to fulfil local requirements and it operates parallel to the Australian will. However, it is advisable to take care, as succession law in some countries is quite different to Australian succession law. For example, some countries have laws of forced heirship tied to religious law that provide family members with a right to inherit. Some countries also have inheritance taxes that must be paid on overseas assets.
It can be difficult, costly and time-consuming to administer a deceased estate that includes interstate and overseas assets. If you require legal advice or representation in any legal matter, please contact Go To Court Lawyers.