International wills for a global community - A word of caution for Australian willmakers

The rules relating to testamentary succession vary greatly between countries and sometimes even within a country.  The problems that arise from these differing rules have increased in modern society largely due to the globalisation of transport, communication and trade. Subsequently, there has been a dramatic increase in the movement of people working and residing between countries, as well as the movement of their personal and business assets.

In this Bartier Bulletin we examine the current New South Wales law relating to testamentary succession, anticipated amendments to the current law, and offer some practical considerations before a decision is made about signing an International Will.

A current example of how these problems can arise is found in the English case of Perdoni v Curati [2011] EWHC 3442 (Ch).  The case involves determining whether a Will executed in England by the late multi-millionaire Piero Curati in 1980 was revoked by a later holographic Will made by the deceased in Italy in 1994.  The case is still before the English courts.

General Law

Where a deceased person had assets in both Australia and a foreign jurisdiction, a conflict of law issue arose in determining which law applied in relation to the validity of the Will, revocation of the Will and the correct interpretation of the Will.

The general law response to this conflict of law issue was to classify assets (property) as movable or immovable with different rules applying to the type of asset. 

Movable assets:                     
testamentary succession governed by the law in which the person was domiciled at the date of death

Immovable assets:
testamentary succession governed by the law applying to the location of the asset at the date of death (lex situs)

Statutory Law in New South Wales

In New South Wales, sections 47-50 of Part 2.4 of the Succession Act 2006 (NSW) (the Act) provide the current statutory response to the operation of the varying testamentary succession rules of different countries.  The formal validity of Wills under foreign law is determined by Part 2.4 of the Act where the willmaker dies after 1 March 2008, irrespective of both the date of the Will and whether the Will relates to movable or immovable assets (property). 

Under section 48, a Will is taken to be properly signed if its signing conforms to the “internal law” in force in the place:

• where it is signed;
• where the willmaker, at the time of signing the Will or at the date of the willmaker’s death, was domiciled or habitually resided; or
• of which the willmaker was a national, at the time the Will was signed or at the date of the willmaker’s death.

International Wills

The concept of an International Will is the latest legal response to the operation of these different testamentary succession rules in modern society.  International Wills are being introduced into New South Wales law by the Succession Amendment (International Wills) Act 2012 (the Amendment Act). 

The Amendment Act will commence operation when proclaimed.  However, it will not commence operation until the 1973 International Wills Convention comes into force in Australia.  This important Convention aims to “develop international instruments to assist in the harmonisation of private international law principles between member countries.” Australia’s accession to this Convention may not be formalised until 2013 or 2014.

The Amendment Act amended the Act by inserting a new Part 2.4A to deal with International Wills.  Part 2.4A incorporates into New South Wales law the uniform law contained in the Convention Providing a Uniform Law on the Form of an International Will 1973.  The Uniform Law provides for an additional form of Will, known as an International Will.  The new Part 2.4A is not expected to commence operation until 2013 or 2014.

Section 50B of the Amendment Act provides that only “authorised persons” can act in connection with an International Will.  An “authorised person” is an Australian legal practitioner or an Australian public notary.

Schedule 2 of the Amendment Act sets out the Annex to the Convention.  The new section 50B of the Amendment Act provides that the Annex to the Convention has the force of law in New South Wales.  Therefore an International Will that is made in accordance with the requirements set out in the Annex will be a valid International Will.

These requirements contained in Articles 2 – 7 of the Annex include:

• that the Will be in writing,
• for one willmaker only
• that the willmaker declare in the presence of two witnesses and an “authorised person”
• that the document is his/her Will and
• that he/she knows it contents. 

The Will must be signed by the willmaker and in the willmaker’s presence by the witnesses and the “authorised person”.

Articles 8-15 of the Annex deal with other matters such as safekeeping of the Will (Article 8) and the form of the certificate that must be attached to the Will to show that there has been compliance with the legal requirements (Article 10).  Article 14 provides that New South Wales law shall apply to revocation of International Wills.

The new Part 2.4A does not affect issues such as testamentary capacity or construction (interpretation) of Wills.  These issues will continue to be determined by New South Wales Law.

The key benefit of the Convention is that it provides greater legal certainty for willmakers.  It provides for a uniform set of requirements for an International Will – a Will that will be recognised as a valid form of Will by courts within the countries that have adopted the Uniform Law regardless of where the Will was signed, the location of the assets or the willmaker’s residence, domicile or nationality.

Practical Considerations

When International Wills commence operation in New South Wales, they should not be seen as a change to current best practice.

Where a person has significant assets both in Australia and overseas, prudent estate planning for that person will still be to have a Will in Australia dealing with the Australian assets and another Will in the other country dealing with the assets in that country.  This will ensure that a lawyer in each country gives proper consideration to such issues as the appointment of executors, the local procedures for probate and estate administration, and taxation implications such as any applicable inheritance tax.

An International Will signed in New South Wales may be appropriate if the willmaker has nearly all of their assets in New South Wales and only has a bank account with a small balance in an overseas country.

Bartier Perry’s Wills, Estates and Taxation Group is well-equipped to assist willmakers with global personal and business needs, and will continue to monitor the developments of Australia’s accession to the Convention and subsequent operation of the Amendment Act in New South Wales.

Author: Gerard Basha