The Australian Stock Exchange lists several popular Exchange Traded Funds that provided exposure to the US market (e.g. IVV and VTS).
Some of these are CHESS Depositary Interests (CDIs), described in the VTS Prospectus as:
CDIs are Australian financial instruments designed to give its holders rights and entitlements (i.e. a beneficial interest) in relation to holding foreign financial products, such as the US ETF Securities. A Depositary Nominee holds title on behalf of CDI holders. In the case of the US ETF Securities, the nominee is CHESS Depositary Nominees Pty Limited (CDN) who is the holder of the AFS License 254 514 and is an approved participant in the clearing and settlement facility operated by ASX Settlement Pty Limited.
Many of these are domiciled in the United States and as such the beneficial owner may be subject to US Estate Taxes.
How could this situation affect an Australian investor?