After 17th August 2015, the EU Succession Regulation (also known as Brussels IV) (the Regulation), became binding in all EU member states – except for the UK, Ireland and Denmark. Despite Brexit, the regulation still remains relevant to estates of people who are connected to both the UK and EU member states.
While the EU Succession Regulation represents an opportunity for estate planning, it may also be regarded as a trap depending on certain circumstances. Simply put, the regulation is relevant where an individual who has connections with the UK has assets in an EU member state that is bound by the regulation. For example, an individual who lives in the UK may have a holiday home in France. Their holiday home would be classed as an asset.
What does the regulation stipulate?
If you are connected to, or have assets within, more than one country then you need to know which country’s law will influence the succession of your estate after you pass away. This is important because different jurisdictions may force different stipulations, such as “forced heirship”, where shares in your estate must be reserved for close family, and nobody else. In the UK, you are allowed to leave your estate to whomever you please as long as your wishes are set out in a valid Will. This is known as “testamentary freedom”.
Which law applies to someone’s estate?
If someone dies and they are connected to more than one country, the general regulatory rule is that the law of the country where they were ‘habitually resident’ when they died will govern the succession of their estate.
But, this can be overridden if:
- The person declared the “law of nationality” in their will, meaning if they were a UK resident but died while staying in their French holiday home, the UK law would be called upon when handling the estate;
- The person was closely connected with another country when they died (e.g. they only just moved out of it, back to the UK);
- The person is a UK national. They can choose to apply the law of the jurisdiction within the UK with which they are most closely connected (such as England and Wales, Scotland or Northern Ireland).
According to England’s rules, succession to a person’s “immovable property” (assets such as land, houses etc.) follows the laws of the country where the property is. Succession to a person’s “movable property”, which includes everything else, follows the law of the country where they are “domiciled” at the point when they pass away. Domicile as an area of law can be complex, but generally speaking means that you are effectively “domiciled” in the country that you consider to be your home, regardless of whether you live there or not.
What should you do if you’re concerned about the EU Succession Regulation?
If you are affected by the regulation, then we recommend you spend some time reviewing your Will. If you don’t have a Will, we highly recommend making one. If you would like to speak to somebody for professional advice about this, please don’t hesitate to get in touch with our team. You can call us free on 0808 164 0808, or request a call back, and we will contact you at a time that suits.