Dual Estate Administration US and Australia

Two Countries, Two Legal Systems, One Estate

When an Australian citizen dies owning assets in both the United States and Australia, the executor faces a genuinely unusual problem: two independent legal systems, each with its own probate rules, tax obligations, and institutional requirements, and no automatic coordination between them.

The US side demands attention first, because its tax rules carry severe penalties for non-compliance and its filing deadlines are absolute. The Australian side is more familiar but depends on US-issued documents that take weeks to obtain and legalise.

The $60,000 Trap — US Federal Estate Tax for Nonresident Aliens

This is where most executors get blindsided. US citizens and domiciliaries receive a federal estate tax exemption of approximately USD 15,000,000 (as of 2026). An Australian citizen who was not domiciled in the United States at death receives an exemption of just USD 60,000 on their US-situated assets.

US-situated assets include:

• Real estate physically located in the United States
• Tangible personal property in the US (vehicles, art, equipment)
• Shares in US-incorporated companies — even if held through an Australian brokerage account or online trading platform

If the total fair market value of these assets exceeds USD 60,000 at the date of death, the executor must file IRS Form 706-NA (United States Estate Tax Return for Nonresident Aliens). The tax rates start at 18% and climb to 40% on amounts above the exemption.

Treaty Relief Changes the Calculation

The US-Australia Estate Tax Treaty provides critical protection. Under Article IV, an eligible Australian resident can claim a prorated share of the full US citizen exemption rather than the flat USD 60,000 threshold.

The formula: multiply the US citizen exemption (approximately USD 15,000,000) by the ratio of US-situated assets to total worldwide assets.

For example: an Australian dies with USD 1,000,000 in US stocks and USD 4,000,000 in Australian assets. Their total worldwide estate is USD 5,000,000. The prorated exemption is (1,000,000 / 5,000,000) x 15,000,000 = USD 3,000,000. Because their actual US assets (USD 1,000,000) are well below this prorated exemption, the estate owes zero US federal estate tax.

This relief is not automatic. The executor must file Form 706-NA plus Form 8833 (Treaty-Based Return Position Disclosure), with full schedules proving the worldwide estate value. Failing to file means the IRS applies the default USD 60,000 exemption, and the estate faces a massive tax bill it does not actually owe.

Closing US Bank Accounts From Australia

US banks require a certified death certificate, letters testamentary or letters of administration from the relevant probate court, and proof of the executor's identity. If the deceased held accounts at a US bank, the executor typically needs to engage a US attorney to handle the probate filing and account closure.

Whether an Australian Grant of Probate will be accepted or ancillary probate will be required depends on the relevant US state and institution; have a US estate lawyer confirm the route before relying on either.

Account-release procedures vary by bank and by the US state. Confirm directly whether a small-estate affidavit or ancillary probate is required before relying on an informal process.

The Australian Side

Once the US documents are obtained and apostilled, the Australian estate administration follows the standard process: apply for a Grant of Probate (or Letters of Administration if there is no will) through the Supreme Court of the relevant state, notify Services Australia within 28 days, contact each bank and superannuation fund, and lodge the deceased's final tax return with the ATO.

The key dependency is the apostilled US death certificate. Without it, Australian institutions will not act. Order at least ten certified copies of the long-form US death certificate and get them apostilled as early as possible — the apostille process alone can range from same-day walk-in service to 25 to 35 business days by mail, depending on the US state.

Coordinating the Two Processes

The practical challenge is sequencing. The US estate tax return (Form 706-NA) has a filing deadline of 9 months from the date of death, but the supporting documents — the worldwide estate valuation, the US asset appraisals, and the Australian Grant of Probate — take months to assemble. Engaging a US tax professional with cross-border experience early is not optional for estates above the USD 60,000 threshold.

The Australian Dies in the US — Family Emergency Guide includes the dual-jurisdiction estate administration checklist, the treaty relief calculation worksheet, and a timeline planner that coordinates US and Australian filing deadlines.