With more Australians leaving the country and many permanent residents from other countries, there are international factors to consider when it comes to Australian Estate Law. Whether you’re the one who moved abroad or your children (or grandchildren) have, it’s important to understand what foreign beneficiaries in your will means.

International Matters: How Australian & NSW Estate Law Applies

Wills in Australia are governed by the Succession Act 2006 (NSW), regulating estate administration and family provision in New South Wales. In New South Wales, probate must be granted by the Supreme Court of New South Wales. Probate is the legal process that the administrator or executor must follow to prove and validate the Will in a court of law. The administrator is a court-appointed individual who manages an estate without a will (intestacy). An executor is appointed by the deceased to handle the estate.

Australia’s estate laws apply only to assets that are located in Australia, regardless of where the beneficiaries live. Foreign beneficiaries have the same legal protections and entitlements to their inheritance as the beneficiaries living in Australia. 

Are Wills With Overseas Beneficiaries Valid? 

If a Will names foreign beneficiaries, it does not invalidate a Will. So, challenging a Will on this basis would be futile. It is the executor’s responsibility to locate the overseas beneficiaries and identify and verify their identity.  

Whether you have foreign beneficiaries in your Will or not, you must regularly review and update your Will if your circumstances change. This ensures the personal details have the most recent contact information for your beneficiaries. Handwritten or informal wills are likely to produce a will dispute, and nobody wants to involve deceased estate lawyers in the proceedings.

Identification, Verification and Documentation Requirements

The most common challenges administrators and executors face include foreign beneficiaries providing certified identification to prove who they are, which may require translation to certify they are the correct person. This can lead to delays, especially if you need to notarise or apostille. 

The requirements change depending on the country and the anti-money laundering rules, as well as the probate processes, but the Anti-Money Laundering and Counter Terrorism Financing Act 2006 applies when you transfer funds overseas. Suspicious activity is reported to AUSTRAC, so the administrator or executor must follow the proper processes.

Tax Implications Foreign Beneficiaries May Face

While Australia doesn’t have an inheritance tax, certain assets may be subject to Capital Gains Tax depending on how they are handled. However, tax obligations abroad vary, and the foreign beneficiary would need to meet their home country’s tax obligations. Many countries apply inheritance tax to inheritances from abroad, and the executor may be legally required to report those payments to the relevant country. It’s essential to take tax advice from a professional because different countries have different rules.

Handling Overseas Transfers 

Typically, executors send funds to overseas beneficiaries via electronic bank transfer. If there are large sums involved, you may prefer to use a specialist currency broker to handle the transfer for lower fees and better exchange rates, as this could save the beneficiary and estate a significant amount. Many banks require additional identification and information about the reason for the transfer, and it could be subject to anti-money laundering rules.

International transfers can take up to a week, but time zones, local holidays, fraud prevention and anti-money laundering checks, and incorrect information can delay the payment landing in the beneficiary’s account. Sums over a certain amount may be reported automatically and subject to further checks.

If there are non-financial assets, whether it’s shares or property, additional steps may be required, and the administrator/executor must ensure they consult the relevant regulations. 

What if the Executor, Attorney, or Administrator is a Foreign Resident?

People overseas can still act as an executor, but they may struggle with administering when they are in a different time zone. There are issues with notarisation and the Power of Attorney if the person is not present in Australia. Additionally, many Australian banks will require the executor to be physically present to close an account. It can also lead to postal delays in getting the correct documentation. 

What if the Deceased Holds Foreign Assets?

Australian probate law applies to assets in Australia. If the deceased has foreign assets, this is a separate process. The country with authority is the country where the asset is located, so these rules must be followed when distributing assets. You may need a reseal of probate, or whatever the equivalent process is in the jurisdiction in question. If you are administering a Will where the deceased held foreign assets, you must seek international legal support. Conflicts can arise when overseas jurisdictions interpret or treat wills differently or refuse to recognise them at all. 

Family Provision Claims

The Succession Act 2006 allows an eligible person to contest or challenge a Will if they feel unfairly or inadequately provided for. Foreign beneficiaries have this right, whether they were born in Australia and moved away or never set foot in the country. The foreign beneficiary can be the applicant or the respondent, but travel and cross-border evidence can complicate proceedings, especially when official translations are required for certification.

The Common Issues

Some of the most common issues that will and estate lawyers have reported in these situations include: 

  • Challenges around locating the beneficiaries 
  • International restrictions (or sanctions)
  • Delays due to disputes over translation accuracy 
  • Local consulates or embassies with limited services
  • The long processing times for certified documentation (including translations)
  • Difficulty for beneficiaries who are unable to access a reliable banking system or postal service

The Importance of Clear Estate Planning

The best way to avoid a challenge or Will estate dispute is to review your Wills regularly, include (and update) the full contact details for your beneficiaries, and consider whether you should hold multiple Wills for other jurisdictions. Ideally, you should appoint an executor capable of managing cross-border tasks.

Ultimately, the earlier you seek legal advice, the safer your estate will be. 

How AJB Stevens Estate Litigation Lawyers Can Support You Through International Estate Matters

At AJB Stevens, we can provide guidance on probate where foreign beneficiaries are involved, assistance in obtaining international documentation, liaise with overseas legal or tax professionals, and advise you about tax implications and reporting. We’ll also provide the support you need to handle family provision disputes where foreign parties are involved. 

Call AJB Stevens today on (02) 8268 0600 to schedule a free consultation.