Your will includes all your Estate wherever it is located
Your will, unless stated otherwise, includes your worldwide property. This means a will you make in Australia will also apply to property you hold overseas subject to the laws of inheritance (called succession law) of the place where the property is located.
This means the will you make in Australia may not be acceptable overseas because of the legal formalities required for the making of wills in the overseas country or because the laws of succession in the overseas country mandate that part of your overseas estate is gifted to family.
Making several wills to deal with your Australian property and your overseas property
To overcome the problems encountered with one worldwide will you can make a will that is limited to your Australian property and a separate will or wills for the property held overseas. The overseas will(s) can be made in Australia if the laws of succession of the overseas country are not dissimilar to Australia’s succession laws (such as United Kingdom, Canada, New Zealand etc).
An alternative to having separate wills is to have an ‘International Will’ if the countries in which you hold property are signatories to the Convention Providing a Uniform Law on the Form of an International Will. Australia is a signatory to this Convention and most of the States and Territories have incorporated the Convention in their laws regarding succession such as NSW in Section 50B of the Succession Act 2006 NSW. This means a will drafted in accordance with the Convention will satisfy the formal requirements of a will in the overseas country. However, the Convention only overcomes the legal formalities of drafting a will and does not override any of the substantive laws of the overseas country that require distribution of your estate to family members.
Tax implications for non resident executors/beneficiaries
If you wish to make a gift to a non resident of your Australian property there may be capital gain tax (CGT) payable. The Estate will be liable for and obliged to withhold tax in relation to the disposal of any Australian property to a non resident. Careful planning is required to identify what assets are subject to
CGT and the extent of the liability for CGT for assets having difference acquisitions dates.
Appointing an overseas executor
It is not unusual for a will to appoint the executor as the trustee for the management and future administration of trusts created under the will (i.e. such as testamentary trusts). Appointing an overseas executor of your will who becomes the trustee of the testamentary trust(s) created under your will can trigger a capital gain tax liability because the property previously held by the executor is now held by the trustee of a trust which may be deemed a non resident trust.