Cross border estate planning and the EU Succession Regulation
Traditionally a deceased’s estate is dealt with by the appropriate authority in the country where he or she last lived and the relevant authority will normally apply its own national law to the estate. However, since the EU Succession Regulation came into force in 2015 (EU/650/2012), it has become possible for testators to elect to choose the laws of the country of their nationality to apply to their estates rather than the laws of the state of their residence. If the testator has more than one nationality, he or she may choose whichever they prefer.
Furthermore, the EU Succession Regulation allows the testator to choose the law of their country of nationality whether or not this is an EU member state.
In order to do this testators should express their choice of law in a will or in a separate declaration and the will or declaration will be considered valid if it meets the requirements of either the law of the EU country where the testator last lived, or the law of the testator’s country of nationality.
Three countries have opted–out of the EU Succession Regulation
In the Republic of Ireland, the UK and Denmark the EU Succession Regulation does not apply so that a testator’s choice of a foreign law while resident in any of these three countries may not be taken into account by the authorities should the deceased have opted for the law of his or her nationality in their will.
However Irish, British or Danish citizens resident in other EU member states may benefit from the EU Succession Regulation by choosing the law of their nationality if they so wish. Only if certain provisions of the will are contrary to the public policy of the state of the testator’s residence can the authorities of that EU country refuse to apply such provisions eg. this could be the case in circumstances where the testator discriminates between beneficiaries on the grounds of their sex, or whether they were born to unmarried mothers etc.
In order for the EU Succession Regulation to apply testators should express their choice of law explicitly and clearly, in their will or in a separate declaration.
The testator shoud state that he or she elects under the EU Succession Reglualtion (EU/650/2012), otherwise known as Brussels IV that the entirety of their estate should be governed by Irish/English law, or simply to state that they elect that the law of their nationality should apply to their last will and testament.
The testator’s will or declaration will then be considered valid if it meets the requirements of either the EU country where the testator was last resident, or the law of his or her country of nationality.
The applicable law
The law applicable to the testator’s estate, whether it is that of the EU country of residence or the law of the testator’s nationality, will govern the totality of the testator’s estate regardless of its location and whether it is movable (eg. a bank account) or immovable (eg. real estate).
Examples of what the applicable law will determine
- who can be the beneficiaries of testator’s estate eg. a spouse or partner, children, parents ;
- how the testator’s assets should be apportioned beneficiaries ;
- who should be liable for any debts left by the testator ;
- whether family members can be disinherited ;
- whether some parts of the testator’s estate can be reserved for certain persons such as the testator’s children ;
- whether anylifetime gifts are taken into account when apportioning to beneficiaries ;
- the transfer of ownership of assets to the testator’s beneficiaries ;
- the powers of executors or administrators eg. to sell part of the estate ; to account for the running of the estate ; to pay the testators’s creditors etc.
The EU Succession Regulation will not apply to inheritance tax payable on the estate which will remain a matter for the state in which the testator was last resident.
Ray Rushe Solicitor-Avocat à la Cour