International estate planning – what do I need to be aware of?

If you have been living overseas and are considering a move to New Zealand following the COVID-19 outbreak, you may be wondering how you should deal with your assets in different jurisdictions and whether you need to take legal advice on your estate planning and asset management.

It is crucial to have an international estate plan if you have assets in more than one jurisdiction. This may include superannuation or pensions you earned while working overseas, real estate in different countries or funds in bank accounts. In particular, it is important for New Zealanders living overseas and those returning to New Zealand to implement a cross-border estate plan that considers the rules relating to domicile, succession, estate and gift tax laws in the relevant countries.

I have moved back to New Zealand after years of living overseas – what do I need to do?

If you plan on remaining in New Zealand, you should make a New Zealand will. If you still have assets overseas, you may also need a will in that country. Your two wills need to work together. Your New Zealand lawyer 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.

It is also important to obtain tax advice on how to move any overseas assets back to New Zealand.

I am a New Zealander still living overseas – what do I need to do?

It is important to consider whether you intend to return to New Zealand in future. 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 assets in New Zealand or intend to return to New Zealand in the future.

It is also prudent to obtain tax advice to ensure you understand your tax obligations in both countries.

What about New Zealand trusts?

If the trustee, appointor or beneficiary of any New Zealand trust you have an interest in lives overseas, you should take legal and tax advice. Depending on the circumstances, this can cause tax and land ownership issues in New Zealand. Any trustee or beneficiary living overseas should also take tax advice in that country to ensure that they have no personal tax issues connected to the New Zealand trust.

Where trustees live overseas, it is important to consider whether it is practical for them to remain as a trustee. Trustees need to make decisions collectively. Different time zones and not being able to meet in person can make this harder.

For more information about asset structuring and estate planning with cross-border elements, contact Morris.

‍