Harmonising European Succession Law – The Impact On Expats

For those who have assets in one or more European countries, the issue of estate planning has always been more complicated. So new EU Succession Regulations, which came into force on 17 August 2015, have been welcomed, with the hope that they will help harmonise the differing, and sometimes conflicting, laws of the EU countries in relation to the succession of assets

 

By Terry Hill

 

The regulations have been established to make things less complicated for expats. Rather than different laws of different countries applying to different assets, the new regulations will mean just one country’s laws will govern the succession of all the assets in the deceased’s estate.

The new rules allow individuals to state in their Wills whether they would like the law of their nationality (or one of their nationalities) to apply to their estate. If no declaration is made then the default position will apply; generally being the laws of the country in which the individual is ‘habitually resident’. It should be noted that habitual residence is not defined and that the regulations only deal with the laws of succession and not tax matters such as inheritance tax.

Do note that the UK, Denmark and Ireland have opted out of the regulations. Despite this, the new legislation will be relevant to individuals with assets in participating EU countries including UK residents and nationals.

This is a developing area and the full extent of the impact on individuals with assets in Europe is not yet clear, and may remain that way for months, perhaps years. Until case law is established, the waters will stay muddy and there must be doubt as to who would risk the Court costs to find out. However for the nationals and residents of EU members who are participating fully it is likely there will be a big improvement.

The regulations also introduce the concept of European Certificates of Succession (ECS) although the timetable for these has not been set. An ECS is similar to a Grant of Probate and provides proof of who is entitled to the assets of the estate. It will be issued by the authorities of the participating member state in which the deceased was resident and will be recognised by all of the participating member states.

To conclude, expats with assets in EU countries will need to practice caution as the UK has not signed up to the regulations. A UK national living in France, for example, will still need to obtain a UK Grant of Probate to deal with assets in the UK.

 

Terry Hill is Executor and Trustee Manager, The Fry Group

 


Please note that the above should not be considered as tax or financial advice, it is general guidance only and should not be relied upon. If you would like advice specific to your own circumstances, please do not hesitate to contact us.