Regulation (EU) 650/2012 (Brussels IV) came into force on 17th August 2012 and will apply fully to deaths occurring on, or after, 17th August 2015. The Regulation attempts to harmonise the private international law rules of succession throughout the EU, without creating a completely new set of succession laws. However, it will only be relevant to your clients if they have assets in the EU States.
In England and Wales, English testators have testamentary freedom and can leave their assets to whomsoever they wish, (subject to the Inheritance Family Provisions legislation). In Europe the situation is different with approximately half of the estate reserved for the surviving children of the deceased, which must be equally divided between them. This “forced heirship” makes it impossible to disinherit financially irresponsible children; it also makes it hard to reward the deserving by, say, leaving more to a daughter who gave up a career to care for her ailing parents.
There are also “clawback” laws in many countries which stop parents from dodging forced heirship by giving assets away in their lifetime. This applies to gifts made in the last years of life (two years in Austria, ten in Germany), or much longer: in some countries, no time limit applies.
Currently the succession laws in the member state where the assets are held apply to those assets upon death. Thus, a resident in England with real estate in France would have the laws of forced heirship applied to that part of the estate in France.
The Regulation provides a general rule that the “law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death” unless the deceased, prior to his death, chose the law of the State to apply in accordance with Article 22. Article 22 states “a person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death.” The interesting effect of Article 20 is that the law chosen does not need to be the law of another Member State which would therefore enable, for example, an Australian national who is habitually resident in France (for the purposes of the Regulation) to choose Australian law to apply to his estate. Article 23 provides that whichever law applies will govern the succession as a whole.
In other words, clients can put a provision in their wills stating that they wish English law to be the applicable law for their assets situated in an EU State. This is known as a nomination and clients with property in an EU state should consider a new will to take advantage of Regulation 650/2012 and make the appropriate nomination.
Although the UK has opted out of the Regulation [as have Ireland and Denmark] British nationals can make an election under the laws of those participating States.
The deceased may choose the law of his nationality to apply to succession of all of his assets across the Brussels IV zone. In other words, there is now 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. The selection of the law of nationality must be made expressly in a Will or analogous document.
The Regulation will apply to the succession of persons who die on or after 17th August 2015; although there are certain transitional provisions which are now in force and mean that if a person chooses the succession law which will be applicable prior to 17th August 2015 that choice will be valid, subject to it complying with the provisions of the Regulation.
For English nationals with foreign assets, it would be advisable, in most cases, for them to make an election that succession to their assets situated in the Brussels IV zone should be via English law.
This information was kindly provided by Mike Smith, College of Will Writing Tutor and Solicitor, and in conjunction with the College of Will Writing.
