EU Succession Regulation: Making a Will with foreign assets. Does your Will include foreign assets?

What is the EU Succession Regulation?

The laws which deal with a person’s assets when they pass away differ from country to country.

For example, some civil law jurisdictions, such as France, have specific laws that reserve a proportion of the residuary estate for children (called ‘forced heirship’ rules). In contrast, English law allows you to choose who inherits your assets to a much greater extent.

If you have financial or other connections with countries which are situated within the EU, it can be difficult to determine which country’s laws apply to the succession of your assets when you die.

The EU Succession Regulation aims to provide greater certainty about which laws apply to your assets.

The Regulation applies to deaths which occur after 16 August 2015.

In which countries does the Regulation apply?

The Regulation applies in the following EU member states: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

The UK is not a participating member. However, the Regulation will still impact your estate after you die if you have connections with a participating member state.

Why the Regulation matters to you?

It is important to understand which law(s) will apply to your estate when you die.

England will usually apply English law to your assets in England.  

In respect of assets held in EU states, the starting position under the Regulation is that the law which applies is the law of the place where you are habitually resident when you die, unless you are clearly more closely connected with another state. Both are fact-finding exercises and can still lead to ambiguity and uncertainty about which country’s laws apply.

Even if England’s laws apply because you are habitually resident here, England will usually apply its Private International Law (PIL) rather than its domestic law. The PIL rules specify that the succession of your immovable property is governed by the laws of the place where that property is situated, meaning that the issue may be referred back to the EU state where the property is held.

Making a choice of law

Importantly, the Regulation allows you to make an express declaration in your Will about which country’s law should apply (provided that certain criteria are met). For example, if you are a British national then you can specify that England’s domestic laws should apply to all of your worldwide assets.

England won’t usually recognise a choice of an EU state’s law because it is not a party to the Regulation. However, EU states who are a party to the Regulation will usually be bound by a choice of English law.

A choice of law can also be implied from your existing Will, without any express declaration. Consequently, it is important to review your existing Will to ensure that the Regulation won’t unintentionally affect the scope of this.

How we can help?

If you have connections with an EU state, or expect to have one in the future, we can advise you on how the Regulation will affect your Will.

We can assist with preparing Wills which are tailored to your circumstances and we can advise you on whether and how to make a choice of law. This can ensure that your loved ones have certainty about how your estate is to be administered, and can avoid the risk of disputes about your Will following your death.

It is also usually recommended that you seek local advice in the EU state concerned. They can advise you on how an English Will would be practically implemented abroad. For example, a choice of English law may change the way that your EU assets are taxed when you die, or change who is able to make a claim against your estate. For this reason, it is preferable to get legal advice in both jurisdictions, to investigate the best outcome.

Written by Christopher Mills (Solicitor), and Laurence Tsai (Paralegal)