EU Succession – New Rules Ease Succession

EU Succession – New Rules Ease Succession

More and more people are living and working abroad or have a holiday home which is located in a different jurisdiction. Currently if you own a property you are subject to the rules of succession in that country on your death. This has led to difficulty in dealing with those assets upon death particularly as many countries operate a forced heirship approach which prevents you leaving the asset to whom you choose.

The European Succession Regulation or “Brussels IV” was passed in 2012 and will come into force on 17th August 2015 and will apply to estates of people who die on or after that date. Although the UK, Denmark and Ireland have opted out it will still affect those with property in a Brussels IV state or who live in such a state.

There will be a single national law of succession to a person’s assets which will be that of their “habitual residence” at the time of death. Unfortunately the Regulation fails to provide a definition of “habitual residence”. In determining habitual residence the EU member state dealing with the succession should make an overall assessment of the circumstances of the life of the deceased during the preceding years of their death and should show a close and stable connection with the state concerned. It is clear to see that difficulties in determining habitual residence will arise and lead to numerous cases for the European Court to decide.

If however the deceased was “manifestly more closely connected” with another state the law of that other state governs succession. It is also possible for the deceased to elect in their Will that the law of their nationality is to apply to the succession of their EU property. So for example an English national with a property in France can elect for their assets to pass in accordance with English Law rather than the forced heirship rules of France. The election can be made now although it will not take effect if the person dies before 17th August 2015.

In conclusion it would appear that the new rules will hopefully simplify matters and ensure that succession is treated under a single law and by one single authority. It is advisable for any client who owns property in any EU member state or is resident in another EU member state to review their Wills and estate planning to take advantage of the new rules and simplify their affairs.

To review your cross border affairs please contact Lindsey Bohanna on 0121 634 2065 or email [email protected]