NSW Wills & Foreign Assets

NSW Wills and Foreign Assets A PAPER BY PAUL ANDERSON JANUARY 2010

NSW Wills and Foreign Assets

Summary This paper deals with the circumstances in which a foreign jurisdiction will recognise a New South Wales Will in relation to assets within the foreign jurisdiction.

Who Does This Impact?

Any person who owns assets in a foreign country and his or her family.

What Action Should Be Taken?

The owner of assets in a foreign country should take appropriate legal advice in that country to ensure that he or she has in place a Will that will be recognised by the local authorities.

Contents:

TURKSLEGAL

Example

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Hague Convention

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Foreign Recognition of the Will

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Practical Approach

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Intestacy

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Conclusion

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NSW Wills and Foreign Assets by Paul Anderson

I recently published a paper on this website which dealt with the circumstances in which a New South Wales Court will recognise a foreign Will in relation to assets located in New South Wales.

What about the reverse situation?

Will foreign Courts recognise a New South Wales Will in relation to assets within the foreign jurisdiction?

The answer is: ‘It depends’.

Example John Smith has lived in Sydney all of his life and accumulated significant assets. In 1990 he lived and worked in an overseas country for several years on a temporary basis. While there, he bought an apartment which he still owned at the time of his death and also invested $50,000 on term deposit which he rolled over periodically.

John carried an Australian passport i.e. he was an Australian national. John was not married. In 2000 he made a Will in Sydney in favour of the Salvation Army purporting to apply to the ‘whole of my property wherever situated’. John died in 2004.

Hague Convention In 1964, the Hague Convention on the Conflict of Laws relating to the Form of Testamentary Dispositions came into force. Thirty-nine countries are currently signatories to the Convention, including Australia and the Convention has been adopted in New South Wales.

The difficulty is that the Convention has not been adopted in numerous other countries.

The current legislation in New South Wales embodying the Convention is section 48 of the Succession Act 2006.

Under section 48, a Will is taken to be properly executed if its execution conforms to the law in force in the place: (a) where it is executed; or (b) that was the testator’s domicile or habitual residence, either at the time the Will was executed or at the time of the testator’s death; or (c) of which the testator was a national, either at the time the Will was executed or at the time of the testator’s death.

A Will is also taken to be properly executed to the extent that it disposes of immoveable property if executed in conformity with the law in force in the place where the property is situated.

By way of explanation, the concept of domicile refers to the place a person regards as his or her permanent home at a particular time, regardless of where he or she is living in a physical sense.

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NSW Wills and Foreign Assets by Paul Anderson

Foreign Recognition of the Will If a foreign Court has adopted the Convention and passed similar legislation to section 48, then the foreign Court would be bound to give effect to the gift to the Salvation Army, both in respect of the apartment and the term deposit. John’s Will is clearly valid under the law of the place of execution or domicile or residence or nationality, namely the law of New South Wales.

The difficulty is that many countries have not adopted the Convention. Further, they may have different laws in relation to inheritance.

In some cases, there are set and fixed rules as to how assets are to be distributed on death and a Will is given little or no room to operate. In other countries, local rules require particular formalities for a Will, especially in relation to land, and these rules must be rigidly followed.

Practical Approach These uncertainties almost invariably mean that before making a Will affecting foreign assets, a person should take appropriate legal advice in the foreign jurisdiction, particularly if land is involved.

One solution is to have a Will made in New South Wales expressed to apply only to Australian assets and another made in the foreign jurisdiction expressed only to apply to assets within that foreign jurisdiction. The first Will can comply with New South Wales formalities and the second Will can comply with the formalities required in the foreign jurisdiction.

One pitfall is to ensure that when making a new New South Wales Will, for example, that only the prior New South Wales Will is revoked and not the foreign Will as well. This is a matter of appropriately wording the revocation clause.

Intestacy What happens if the deceased has not made a Will at all?

In New South Wales the rule is that the law of the domicile determines how moveable property is divided on intestacy and the law of the situs is applicable in relation to land.

The problem is that the foreign jurisdiction may not have similar rules. The differences could arise in two ways. Firstly, there may be a difference under foreign law as to which legal system applies and, secondly, once it is decided the foreign legal system applies, there could be differences in the rules deciding how assets are to be divided on intestacy.

The obvious answer is to have two Wills, one complying with the formal requirements in New South Wales in relation to the New South Wales assets and the second applying to assets in the foreign jurisdiction complying with the formal requirements of such jurisdiction.

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NSW Wills and Foreign Assets by Paul Anderson

Conclusion Ownership of assets in several countries creates particular problems but such ownership is increasing all the time. In order to avoid unexpected and possibly unpleasant results, it is necessary to take legal advice in each overseas country and, if necessary, prepare a Will relating to the assets in that country complying with its formal requirements.

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NSW Wills and Foreign Assets by Paul Anderson NS

For more information, please contact: Paul Anderson Partner T: 02 8257 5742 paul.anderson@turkslegal.com.au

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