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NSW Exchange Rate - Transfer of Estate Monies to Beneficiary Oversees?

Discussion in 'Wills and Estate Planning Law Forum' started by Pebbles, 19 June 2015.

  1. Pebbles

    Pebbles Member

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    I am looking for some advice regarding the exchange rate that should be applied to an overseas beneficiary when monies ( inheritance) are transferred to them.

    I am involved in an Estate that has not been administered in a timely manner due to the executors not agreeing with each other. A solicitor has been appointed now to administer the Estate and now, nearly 4 years later is ready to distribute some of the monies.

    Some of the beneficiaries do not reside in Australia and due to the delay these beneficiaries will receive less now than they would have done at the time of death due to the difference in the exchange rate.

    Do these beneficiaries have any recourse in relation to this and should the exchange rate applies be at the date of death or the date of payment?

    All help and advice gratefully received :)
     
  2. Tracy B

    Tracy B Well-Known Member

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    Hi Pebbles,

    I would expect the exchange rate to be at the time of distribution and not time of death.

    This is because:

    1. If the gift had been a house, and the value of the house increased between death and distribution, the beneficiary will receive the value at time of distribution. If the value decreased, the estate does not compensate for the loss in value.

    2. At death (i.e. before distribution), beneficiaries to a will do not actually have an interest in their respective gifts. They only have an interest upon distribution. The only right they have from death to distribution is to expect the executor to administer the estate in the best interests of all beneficiaries and to not misappropriate the estate. Therefore, it does not appear to make sense that the exchange rate (or value of a property) is determined at time of death rather than time of distribution.
     
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  3. Tim W

    Tim W Lawyer

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    I agree with @Tracy B.

    In short and simple, absent any facts (so far unknown to us)
    that could found an action for delinquent executorship,
    the answer to this part of your question
    is "no".
     
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  4. Pete Evans

    Pete Evans Well-Known Member

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    "Do these beneficiaries have any recourse in relation to this and should the exchange rate applies be at the date of death or the date of payment?"

    Pebbles why not pay them in Aussie dollars? The benefits. can open an AUD account in the country they live in and then chose to swap it into any currency when they chose . If u or the executor transfer the cash using a bank they could be paying a penalty of 5% plus but using an alternative money exchange service like OzForex could be a safer and easier way to stop any problems .

    I'm not qualified to offer advice but I work in finance of sorts .

    Cheers PE
     
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  5. Pebbles

    Pebbles Member

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    Thank you all for your replies :)

    I think the main issue is that if the estate had been administered in a timely manner ( i.e. within 12 months) the conversion would have equated to a lot more than it does with the current exchange rate and this is a significant detriment to the beneficiaries concerned.

    In the same way that interest is payable on monies if they haven't been paid out after 12 months, the beneficiaries feel that they should be compensated for the losses their have incurred due to the delay. They are unsure how to pursue this though.
     
  6. Tracy B

    Tracy B Well-Known Member

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    The beneficiaries will continue to have interest paid on their assets. If they do not want the assets to be turned into cash (for foreign cash) now, then it can go into trust account or some kind of investment. The interest payments are meant to compensate for delay in distribution outside the normal 12 month time frame. I am not 100% sure about this, but I suspect this interest payment is on top of any interest/income already accrued during the 12 months.
     

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