INTERNATIONAL SUCCESSION

Choose the law applicable to your succession

international succession

The opening of borders and the simplification of travel have resulted in an increasing mobility of citizens around the world and the growth of expatriation.

This mobility has favoured unions between people of different nationalities, settling outside of one’s country of origin, changes in country of residence during one’s lifetime, and the acquisition of goods (movable or immovable) in different countries.

It is not uncommon for the estate of an expatriate to include properties and/or heirs in a State other than that of his or her residence.
In this case, given that the succession is international, the question arises as to which rules of succession apply.

These situations are more complex than a ‘classic’ succession.

This is why European Regulation No. 650/2012 of 4 July 2012 regarding international succession provides measures to simplify these.

This text applies to the succession of persons who die on or after 17 August 2015.

 

WHEN IS A SUCCESSION ‘INTERNATIONAL’?

A person’s succession is international if at the time of his or her death:

  • he or she was resident in a country other than that of his or her nationality,
  • or he or she leaves goods or movable and/or immovable property in a country other than that of his or her nationality or habitual residence.

The regulations on international succession must be considered both from a civil and from a fiscal point of view. Overview of applicable rules.

succession-internationale-3

CIVIL REGULATIONS ON INTERNATIONAL SUCCESSION OPENED AFTER 17 AUGUST 2015

THE PRINCIPLE

According to European Regulation regarding succession, only one law should apply to estates with foreign elements.

Effectively, this text aims to simplify and, above all, to unify the regime for these successions.

Henceforth, in application of this regulation, the applicable law is, in principle, that of the “last habitual residence” of the deceased, which applies to all of the deceased’s property (movable and immovable property).

REMINDER: Before the entry into force of the European Regulation, several laws may have governed a succession: that of the last domicile of the deceased for movable property, and that of the country where the immovable property was located.

TO WHICH SUCCESSIONS DOES THE EUROPEAN REGULATION APPLY?

The Regulation is universally applicable, which means that it applies in all EU Member States (with the exception of Denmark, Ireland and the United Kingdom) , regardless of the designated law (law of a Member State of the European Union or law of a third State).

Consequently, the Regulation applies even if the deceased was a third-country national, but had his or her last habitual residence in a Member State.

NB: The fact remains that the law designated by the Regulation may pose difficulties in application and efficiency within third countries, that is to say countries not bound by the Regulation.

EXAMPLES:

  1. A person of Canadian nationality dies in Germany where he had his habitual residence; the German notary in charge of the settlement of this estate will apply the German succession law.
  2. A French person usually residing in Brazil dies leaving property in France and Brazil, his heirs living in France. The estate will be settled in accordance with Brazilian law, the law of the last habitual residence of the deceased.

THE EXCEPTION: THE SAFEGUARD CLAUSE

Sometimes the habitual residence of the deceased is difficult to establish, especially when expatriates live in more than one country in the same year. In this case, the law of the country with which the deceased had “obviously closer ties” applies to his or her estate.

EXAMPLE: A French national, who usually lives in France with his family and has all of his property there, is sent to Germany for a one-year assignment. He dies in Berlin a few days before the end of his assignment.

In principle, the succession law of the last residence should apply: in this case, German law. However, French law could prevail given the obviously closer ties (family, heritage) that the deceased had with France.

International succession 2

POSSIBILITY TO DESIGNATE ONE’S SUCCESSION LAW (“PROFESSIO JURIS”)

It is possible to derogate from the rule (i.e. the law of the last habitual residence) and to choose the law of one’s nationality. If several nationalities are involved, a person may choose the law of any State of which he or she is a national.

This wish must be expressed in a will.

EXAMPLE: A person who is ordinarily resident in France but who has English nationality may provide under his will that English law will apply to his estate.

HOW TO DRAFT A WILL IN AN INTERNATIONAL CONTEXT?

A will is in principle valid if it is in accordance with the law of the State where it was drafted.
The 1961 Hague Convention provides, in its 1st Article, that a will is valid in its form if it corresponds to the internal law:

  • of the place where the testator made his or her will, or
  • of a nationality of the testator, either at the time when he or she made the declaration, or at the time of his or her death, or
  • of a place in which the testator had his or her domicile, either at the time when the declaration was made, or at the time of death, or
  • of the place in which the testator had his or her habitual residence, either at the time when the declaration was made, or at the time of death, or
  • of the place where the property is located

In view of these rules, a will drawn up under the formats of English law by a testator of English nationality, and disinheriting a child concerning property located in France, something which is normally prohibited under French law, may be applied in France if that will was written in the English language, and in the formats of English law.

 

You can read also: Succession Duty and Gift Tax in France

How can we help?

Contact Maître Benjamin A. Kergueno, Attorney at Law today if you are dealing with issues related to real estate law in France and on the French Riviera.

Maître Benjamin A. Kergueno, LL.M will provide you with a full set of informations and with the adequate counsels for sorting it out.

For more information or to schedule an appointment with an experienced lawyer regarding real estate law in France, please contact us.

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