If you have recently purchased property in Australia, it is important that you protect your new asset. Most people immediately take out insurance to protect their new property from the consequences of flood, fire, damage and theft. Many people fail to protect their new asset from the consequences of incapacity or death.
As the laws in each country are different, a Will or Power of Attorney prepared in another country may not always achieve the results you would like.
Without a valid Australian Will or Power of Attorney, your estate could be held up for months dealing with legal requirements which could prove costly for the estate, potentially thousands of dollars in legal fees.
If you want to ensure your interests are protected and that you don’t leave a mess for your loved ones, you should prepare:
- an Australian Will
- an enduring Power of Attorney (Financial)
What is a Will?
A Will is a written document which declares how your estate assets are distributed following your death.
In Australia if you do not have a valid Will, your assets will be distributed in accordance with the laws of intestacy of the state in which you own your property.
In Victoria your assets could end up in the hands of distant family members you do not wish to benefit or in the hands of the Victorian government.
Which law applies?
In addition to the formal requirements for a valid Will, it is important to consider what laws apply; Australian law or laws of the foreign purchaser.
As a rule of thumb:
- Real Property (ie real estate) is regulated by the law of the place where the land is situated.
- Personal Property (ie non-real estate assets) is usually dealt with in accordance with the relevant inheritance laws of the country of the foreign purchaser.
Once you identify the assets, matters can become complicated as the identification of the relevant inheritance laws may involve an examination of a number of factors including domicile, nationality and residence of the foreign purchaser.
The relevant inheritances laws of the foreign purchaser may also impact whether:
- the capacity to make a Will is restricted in any way
- there are forced heirship laws
- it is possible for the foreign purchaser to make a Will at all in their country
Typical issues can include forced heirship in civil law countries and fixed inheritance rules in islamic countries. Each persons circumstances will be unique and different issues will need to be considered.
What happens if I die without a valid Will?
If you die without leaving a valid Will (‘intestate’) then, subject to the impact of any relevant foreign inheritance laws, your assets will pass in accordance with intestacy laws.
The distribution of assets on intestacy in Victoria is set out in the Administration and Probate Act 1958 (Vic) (Act).
A distribution of assets on intestacy may be an unsatisfactory outcome and the time and costs associated with administering an estate without a Will can often outweigh the costs of preparing a basic will in Australia.
Who can you leave your estate to?
In Australia, you can generally leave your assets to anyone you wish.
Although you can leave your assets to anyone you wish, if you leave an individual out of your Will for whom you should have provided, the courts have the authority to order provision to be made for that individual from your estate.
Enduring Power of Attorney (Financial)
In Australia only the legal owner of real property can make decisions in relation to that property.
Legal owners can appoint someone to act on their behalf, including during times when they are unable to make decisions for themselves or where they are out of the country and can’t sign legal documents.
To cover those circumstances, you may consider appointing someone you trust and who resides in Australia (for example a family member, professional adviser or a trustee company) to act for you under an Enduring Power of Attorney (Financial).
An Enduring Power of Attorney continues to operate even if you subsequently lose the capacity to make decisions yourself.
What do I need to do?
If you own property in Australia, and you want to ensure you are protected, you should prepare an Australian Will and an Enduring Power of Attorney (Financial).
Rigby Cooke Lawyers provides a comprehensive wills and estates service to foreign residents, executives, business owners, investors, parents and retirees.
Contact our Wills and Estates team for further information.