Overseas Assets and Estate Planning
A vast number of New Zealanders own overseas assets. It is important to have an international estate plan if you have assets in more than one jurisdiction. Cross-border estate planning is complex, and considerations need to be given to the rules relating to domicile, succession, estate, and gift tax laws in the relevant countries.
Generally, the procedure for estate administration depends on the types of property the deceased owned at the time of his or her death. The law classifies the property into two types. The first type is immovable property, which includes land and anything that is fixed to the land, such as buildings. The second type of property is movable property, which would include anything that is not immovable property such as motor vehicles, bank accounts, and shares in a company.
Usually if the assets owned by a person include land or real estate, a Will must be prepared in accordance with the country where that real estate is situated. If the immovable asset is located in New Zealand, for a Will to be valid under New Zealand law, the Will must be in writing, signed by the will-maker and witnessed by two independent people in the will-maker’s presence and in the presence of each other. The Will should also be dated at the same time it is signed.
If assets do not include land and comprise only bank accounts, shares or other movable property, the Will must be made in accordance with the law of the country where:- (a) the Will was signed; or (b) the deceased was domiciled when the Will was signed; or (c) the deceased was originally domiciled (the Will must be made in accordance with the law in force at the time the Will was signed); or (d) the deceased was domiciled at the time he/she died. (Wills Act 2007, s 22(5)).
How does that apply in practice?
If you live in New Zealand and have assets overseas
If you reside in New Zealand, you should make a New Zealand will. If you have assets overseas, you may also need a will in that country. You should work with a New Zealand lawyer who will assist you with coordinating the preparation of your international will.
You should take advice on the best way to structure gifts, both during your lifetime and under your will, to family members who remain overseas. There may be tax consequences for them if they receive gifts or inheritance from you.
If you live overseas
The laws of the country of your domicile will apply to the inheritance of your estate. Your domicile is the country of your birth unless you have acquired a new domicile. If you do not intend to return to New Zealand, you may have acquired a new domicile of choice in your new country of residence and so New Zealand law may no longer apply to your inheritance.
You should make a will in the country you are living in and consider whether you also need a will in New Zealand. This is likely to be necessary if you have immovable assets in New Zealand.