An executor is a person or organisation who carries out your wishes under your Will and administers your estate. An executor is responsible for:
- Locating the original Will;
- Obtaining a grant of representation from the Supreme Court;
- Communicating with any asset holders and beneficiaries;
- Identifying and collecting your assets; and
- Making sure all debts and taxes are paid before distributing your assets in accordance with your Will.
Can I appoint a foreign executor?
Yes, you can! You may not have family members here in Australia or maybe you’re new in Australia and prefer to appoint a loved one from another country. However, potential issues may arise if you are appointing someone overseas.
What to consider when appointing a foreign executor
Careful considerations must be taken when appointing someone who lives overseas. It is important to obtain legal advice from a lawyer and accounting advice from a financial adviser before making your Will.
Tax Implications
There may be adverse tax consequences if appointing a non-resident of Australia for tax purposes. An estate is treated as a trust for tax purposes. This means that your estate may be subject to non-resident tax rates or the taxation law of your executor’s country.
If an executor distributes your assets without properly discharging any tax obligations, they may be personally liable to pay any outstanding tax-related liabilities of the estate.
Unfamiliar Territory
A foreign executor may be unfamiliar with government departments and other institutions in Australia, such as banks and superannuation providers. There may also be a language barrier. This makes it difficult for executors to fulfill their duties, such as notifying the relevant departments and companies of your death and collecting information.
Practical issues
An executor living overseas might find it difficult to administer your estate due to distance or time differences. Note, the Supreme Court can refuse to issue a grant of Probate if the executor lives overseas. Your executor might not have the time or financial resources to come to Australia to administer your estate.
Other options?
Your executor can choose not to act before exercising their obligations as an executor. Whoever you have named as your substituted (backup) executor can then take on the role. You may want to consider appointing an Australian resident as your backup!
If there is no backup, your executor can appoint an independent professional, such as an accountant or a solicitor, to be their attorney. Your executor should seek legal and financial advice before exercising their obligations as an executor.
Alternatively, you may want to consider appointing an independent professional as your instituted (first) executor.
For more information about Wills, please reach out to W Legal Wills & Estate lawyers at hello@wlegalgroup.com.au or (03) 9590 6180.
