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EU Succession Law

Readers of our International Newsletter will have seen our recent article on EU succession law and we cover the topic again here as this is a subject that may be of wider interest.

Although the UK opted out of EU Regulation No 650/2012 (commonly known as "Brussels IV"), it may have implications for anyone who owns assets in an EU State which has opted in. The Regulation was passed in 2012 but will not come fully into force until 17 August 2015 as it will only apply to the estates of people who die on or after that date.

The Regulation applies a single national law of succession to a person's moveable and immoveable property upon death and applies to both testate and intestate succession (i.e. whether or not the person made a Will). The applicable law is that of the country of the deceased's habitual residence at the time of death, unless:

  • The deceased was manifestly more closely associated with another state; or
  • The deceased elected in their Will for their national law to apply, regardless of whether the state of their nationality is a Regulation State or not.

There is therefore an opportunity for people with property in a Regulation State to elect in their Wills that the law of their nationality should apply to the succession of their relevant EU property. This may avoid local forced heirship rules which would otherwise apply.

It is possible to make the election now, i.e. in advance of August 2015 although an election will only take effect if the person dies on or after 17 August 2015. Not only is it possible to make the election in advance and to elect for English law if that is the person's national law, it is also possible to make the election in a UK Will. There may, however, be other, more practical reasons to make an overseas Will and to include the election there and so this is something that requires careful consideration.

As predicted, there are a number of complexities. Broadly, the Regulation does not apply to lifetime gifts and says little about trusts. This may prove awkward where a person's assets fall within a jurisdiction which does not fully recognise trusts and the devolution of assets under their terms, such as France.

In some cases, where local laws of an EU state allow assets to pass in accordance with a deceased's national law, the effect of the Regulation and other private international law rules may be to impose local forced heirship rules that previously did not apply.

Given that the Brussels IV Regulation provides both opportunities and pitfalls, it is important for anyone who could be affected by it to take advice and revisit their Will.

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Bankside Office

240 Blackfriars Road
London
SE1 8NW
DX 53 Chancery Lane

Telephone: +44 (0)20 7629 7411
Fax: +44 (0)20 7629 2621
Email: bh@boodlehatfield.com

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