Succession law varies considerably from one EU country to another. A major step to facilitate cross-border successions was the adoption on 4 July 2012 of European Union rules which will make it easier for citizens to handle the legal side of an international succession. These rules are applicable to the succession of persons who die on or after 17 August 2015. Denmark, Ireland and the United Kingdom do not participate in the Regulation.
The objetice of these rules is to ensure that:
- A given succession is treated coherently, by one single court applying one single law.
- Citizens are able to choose whether the law applicable to their succession should be that of their last habitual residence or that of their nationality.
- Parallel proceedings and conflicting judicial decisions are avoided.
Decisions relating to successions given in one EU country are recognised and enforced in other EU countries.
The initiative in no way alters the substantive national rules on successions but you need to specify which law will apply to your Will.
The following issues continue to be governed by national rules:
- Who is to inherit and what share of the estate goes to children and spouse.
- Property law and family law in an EU country.
- Tax issues related to the succession assets.
Note that Spanish law is very strict with respect to compulsory heirs.
WHICH LAW WILL APLLY?
The intended effect of the new European Succession Regulations is to make things less complicated so that instead of different laws of different countries applying to different assets, just one country’s laws will govern the succession of all the assets in the deceased’s estate.
The default position is that the law of the country in which the deceased has their habitual residence at the time of death will apply and will govern the succession of the whole worldwide estate.
People will however be able to opt for the laws of the country of their nationality (or one of their nationalities if multiple) to apply to their estate instead by properly setting this out in their Will, and will also be able to opt for the Jurisdiction Courts that will rule any succession.
The Regulations also state that the law chosen does not need to be the law of another EU Member State. This would therefore enable, for example, an Australian national who is habitually resident in Spain to choose Australian law to apply to his estate.
It is important to note however that these regulations deal with the laws of succession only i.e. who inherits the assets of the estate. It does not deal with any tax matters, including inheritance tax.
All EU countries will apply these regulations with the exception of the UK, Ireland and Denmark who have opted out. Although the UK is therefore not a signatory to these regulations, the regulations are still of considerable relevance to UK residents and nationals with assets in participating EU countries.
In this case, if a Spanish or German citizen go to the UK to reside his Will will not be affected by the new rules. However, if a British citizen moves to Spain or Germany, and his Will does not specify which law should apply to it , the Spanish or German law will apply.
After 17 August 2015, an English national (for example) will be able to create a Will that stipulates that English law is to apply to his/her entire worldwide estate, including property in other participating EU member states. As such, any EU member state which is a signatory to the regulation would be required not to apply its own succession rules to those assets, and apply English succession law instead.
That if you made your will after August 2015 and you did not specify which law would be applicable to it, your heirs could find out that the law applicable to it would be that of your last country of residence and not the one of your country of origin.
Therefore, we strongly recommend that if you are in this situation you contact us, at your earliest convenience, so that we check your sucession and Will current situation in order to proceed with any necessary changes that might be necessary to fulfill your Will as you want.