Estate Planning for Expats: A Practical Guide

Estate planning is always important. It’s about ensuring your intentions are clear and your loved ones are protected. When you’re living abroad, estate planning becomes more complex, but also even more crucial.

With your life, assets and family spanning multiple countries, having a plan focused solely on Australia is not enough. Estate planning for expats requires a coordinated, global approach that considers not only your personal circumstances but also the legal systems and tax regimes that may impact your estate.

Here’s what to consider when planning your estate as an Australian expat.

1. Take stock of your global financial position

Understanding what you own and where it’s located will help guide the legal and tax strategies needed in each country.

Start by compiling a comprehensive list of your assets and liabilities, both in Australia and overseas. Include real estate, superannuation, bank accounts, investments, business interests and digital assets.

A strong estate plan starts with clarity.

2. Understand international legal requirements

Different countries have different rules around estate planning. Estate planning considerations for US taxpayers will differ from those of taxpayers in other countries. Some common pitfalls to be aware of for cross-border estate planning include:

Will recognition

A will that is valid in Australia may not be accepted overseas and vice versa. In many cases, you may need separate wills for different jurisdictions. These should be drafted carefully to ensure one doesn’t accidentally override the other.

Succession laws

Certain countries apply strict rules, like forced heirship, which may override your wishes and dictate how parts of your estate are distributed. It’s important to understand these local laws and how they affect your ability to direct your estate.

Powers of attorney

A power of attorney prepared in Australia may not be valid elsewhere. If you want someone to act on your behalf across borders, you may need separate documents for each jurisdiction.

3. Be proactive about international tax risks

While Australia doesn’t have a formal inheritance tax, other countries do. Without careful planning, your estate could be subject to expat inheritance tax in multiple countries, potentially reducing the value passed on to your loved ones.

Double taxation

Some jurisdictions may attempt to tax the same assets. Tax treaties may reduce the risk, but not all situations are covered. A qualified adviser can help you navigate these complexities and avoid unnecessary liabilities.

Capital gains tax in Australia

Although Australia doesn’t apply estate tax, capital gains tax (CGT) may still apply to assets transferred through your estate. The residency of your executor and beneficiaries also affects how CGT is applied.

Superannuation for expats

Superannuation often falls outside your will, and how it is treated varies based on who your beneficiaries are and where they live. Ensure your binding death benefit nominations are up to date and aligned with your broader estate plan.

4. Choose your executor and understand residency implications

Residency matters in estate planning, especially for executors and beneficiaries.

If none of your executors are Australian residents, your estate may be treated as a non-resident trust, which can lead to higher taxes. Including at least one Australian-resident executor can help avoid this.

Foreign beneficiaries may face different tax treatments, including withholding taxes or local inheritance taxes in their country of residence. Specialist advice is crucial to managing these outcomes.

5. Know what to expect with probate and resealing

If you hold assets in multiple countries, you may need to go through probate in more than one jurisdiction. In some Commonwealth countries, Australia’s grant of probate can be ‘resealed’, which allows local authorities to recognise and enforce it. In other regions, you may need to apply for probate from scratch.

Establishing valid wills in each jurisdiction can make this process more efficient and reduce delays and legal costs.

6. Review your plan regularly and communicate it

Personal circumstances and laws change. That’s why it’s important to revisit your estate plan regularly, particularly after significant life events or changes in residency.

Just as importantly, keep your executors, beneficiaries and advisers informed of your intentions and the structure of your plan. Clear communication helps avoid confusion and ensures your wishes are followed.

7. Seek specialist advice

Estate planning for expats is not a one-size-fits-all process. With assets, family and legal obligations across borders, it’s essential to work with professionals who understand the intricacies of cross-border estate planning.

Your Apt Wealth Partners financial adviser can coordinate with international legal and tax experts to help you build a plan that protects your wealth and secures your legacy.

Secure your legacy with Apt Wealth Partners

Estate planning for expats isn’t a tick-box exercise. It’s about providing clarity and care for the people who matter most to you.

Our advisers are experienced in expat financial planning and can offer the right guidance and a globally informed approach. Get in touch to ensure your wishes are respected and your loved ones are supported, no matter where life takes you.

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.