When you move to Australia everything is the same, just totally different . . . We all know how different English can be interpreted; traffic light instead of robot, “ute” instead of “bakkie”, etc.
Estate planning is no different situation, as the old saying goes, the only thing that you can be sure of, is death and taxes . . . Your will is the best way to ensure that your wishes will be carried out with regards to the distribution of your assets following your death.
An existing will in South Africa may not be valid in Australia for the purpose of winding up a deceased estate.
If a person own assets in Australia and dies without an Australian will, the deceased estate will be deemed to be intestate.The deceased’s property will then be dealt with in strict accordance with certain statutory rules; in some cases, in the absence of relatives may through inertia create an unplanned and unintended gift to the State government. In lieu of an intestate succession rules, the State appoints an administrator whom is tasked to wind up the deceased estate. It follows that the person who is appointed in that role and the actual distribution may thus not reflect the deceased’s true wishes.
Intestate succession practically means that if a deceased had a spouse and children, the spouse would be entitled to the first $100,000 from the estate and the remainder of the estate would be divided equally, 50% to the spouse and 50%to the children.In a case where the children are minors (under 18 years) their share would need to be kept by the Public Trustee until they reach the age of 18.
A simple solution to mitigate the risk of dying intestate is to draw up your own will or using a standard form purchased from a stationer found in a will kit – especially if the estate is simple in terms of both assets and beneficiaries.However, we strongly suggest that you use the services of a solicitor in this regard.
It is important to understand that people’s circumstances and wishes differ and special care should be taken if you have emigrated and you have minor children.
In Australia a proper will consist of at least three elements/documents that need proper consideration:
- Making your wishes clear with regards to your assets in the event of your death,
- Appointment of a Guardian - A person appointed by you to care and manage the affairs of your minor children. You can outline any specific factors you wish your guardians to consider in raising your children in a separate Memorandum of wishes.
- Your living will/ enduring power of attorney - empowering someone to act on your behalf if you should become incapacitated (possibly unexpected and/or many years before actual death)
In most instances only South African based assets will be subject to estate duty in South Africa. Those of us who are still “resident” in South Africa (i.e. not formally emigrated) will therefor be liable for estate duty on all assets, including foreign held assets.
Although estate duties were mainly abolished in Australia, CGT in Australia must be taken in consideration when you do your estate planning.
Preparing a South African will could go a far way to separate your dutiable South African estate from your non-South African estate (exempt from South African estate duty). Having a South African will could protect your legatees against a long and cumbersome process to have the Master of the High Court (in South Africa) accepting not only the certified copy of the Australian will but also the acceptance of the Australian executor.
The Master may accept the Australian appointed executor without following the normal procedures, on condition the deceased did not reside in South Africa and the estate does not include immovable South African properties. The foreign executor will (as in all cases) be called upon to file a final tax return and estate duty tax return.
A retirement annuity in South Africa does not usually form part of the wishes in your will.The trustees of the fund can override your wishes, especially if you are married and in the case of minor children. As discussed in previous issues, I urge all ex South Africans to check if you have retirement annuities left in South Africa, as well as the values thereof. It might be to your benefit to cash in these retirement annuities and transfer the money to Australia. You don’t need to be at retirement age (55 or older), nor do you need permanent residence or citizenship in Australia.
Your will (both in Australia and/ or in South Africa) should be reviewed from time to time, and brought up to date if necessary, in order to reflect changed circumstances.Your will is perhaps the most important legal document the average person will ever sign. Without one, the courts – and not you – decide what happens to your assets. They can even decide what happen to your children.
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