Many Chinese-Australian families own a home in Melbourne and an apartment in Shanghai, Guangzhou or a hometown city. A common Australian Will leaves “all my property wherever situated” to a testamentary trust, managed by a trustee for children or grandchildren. In Australia that structure is routine. In mainland China it can bring the inheritance to a halt.
Why trusts cause trouble in China
China has had a Trust Law since 2001, but trusts are rarely used for family inheritance. In practice, notary offices and real estate registries expect an inheritance to transfer full ownership directly to the heirs. A trustee asking to be registered as owner, to hold the flat for other people, falls outside what most local registries are used to processing.
The result can be months of correspondence, requests for legal opinions, or a refusal. In the worst case the heirs must rely on Chinese intestacy rules for that property.
Which law applies?
China’s 2011 law on foreign-related civil relationships sends many questions about real estate to the law of the place where the property is. For intestate succession, the law of the property’s location governs the real estate. Even where a foreign Will is formally valid, the steps to register title in China are a matter for Chinese authorities.
What changed recently
- Civil Code (from 1 January 2021). A notarised Will no longer automatically overrides other forms of Will. Valid forms include handwritten, typed with two witnesses, audio-visual and notarised Wills.
- Registration without inheritance notarisation. Since 2016, heirs can apply directly to the local registry with the Will, death and kinship documents. Local practice still varies, and many registries still prefer notarised evidence.
- Apostille. Mainland China joined the Apostille Convention in November 2023. Australian documents for use in China, such as a grant of probate or death certificate, can now be apostilled rather than legalised through the consulate.
Practical planning for Chinese property
- Consider a separate Chinese Will for mainland real estate, prepared with a PRC lawyer, often notarised. Leave the property outright to named people rather than to a trustee.
- Exclude that property from the Australian Will, and draft both Wills so neither revokes the other.
- Keep the testamentary trust for Australian assets, where it works well and can offer tax and asset-protection benefits.
- If a trust is essential, consider having the Chinese property sold and the proceeds paid to the Australian trustee, and test that approach with a PRC lawyer first.
- Prepare documents early. Certified kinship documents, translations and apostilled copies take time to obtain once a parent has died.
- Get tax advice on both sides. China does not currently have a general inheritance tax, but transfer taxes and Australian capital gains tax can both apply.
Chua Tan Associates has advised families on Australia–China estates since 1990, and works with PRC lawyers on the mainland side. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice. Victorian law unless stated otherwise.
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