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Today marks an historic day in the challenging world of cross-border succession: new EU rules on succession come into force today that are designed to bring clarity to an increasingly complex area of law.
For anyone with a link to, or assets (including real estate, investments and operating businesses) in, the EU there has never been a more important time than now to review their estate planning.
Global mobility means that families and their assets have become increasingly international. Despite this, until now, there has been no coherent overarching system to determine how cross-border estates are dealt with on death.
Where there are family members and assets in multiple jurisdictions, this has often led to the overlapping application of conflicting succession rules.
As of today, the law is one step closer to coping with the reality of international estates.
The EU Succession Regulation aims to simplify matters post-death by providing a framework for determining which country will have jurisdiction over an EU estate and which country’s succession laws will apply to those assets.
For those who have assets in the EU, or are nationals, resident or domiciled in an EU country, this should make the post-death probate process simpler (and consequently cheaper).
The new EU rules are all about achieving certainty. Individuals will now know in advance which courts will have jurisdiction and which laws will apply to their assets, so enabling them to plan accordingly.
In very general terms, the 25 participating EU Member States will look primarily to the courts and the laws of the country of the deceased’s habitual residence, unless the deceased made an election for the law of their nationality to apply.
Just to complicate matters a little, the new EU rules do not apply in the UK, Ireland or Denmark. This does not, however, stop the rules from applying to UK residents who are domiciled in France or who hold assets in Italy, for example.
Existing wills and other testamentary documents should be reviewed in this context.
In many cases, they will already fulfil the necessary requirements to take advantage of the new EU rules. In other cases, a new will (or wills) or a codicil might be required.
Particular care should be taken where different wills have been made to cover assets held in different countries. As ever, it is important that these wills work together and do not cancel each other out.
We have found that the easiest way to manage this process is to ask a single lawyer to coordinate the wills and estate planning in all of the relevant jurisdictions.
The application of the new EU rules can be complex and so it is important to take specialist advice to get it right. As ever, any such estate planning advice should be coordinated with tax and family law planning.
With offices across Europe (the UK, France, Luxembourg and Switzerland) and the Middle East, Charles Russell Speechlys’ private client lawyers have market leading practical experience with international estate and tax planning.
If you would like further advice on the EU rules or on cross-border estate planning generally, please contact one of our International Private Client specialists.
This article was written by Michael Wells-Greco and Sangna Chauhan.
For more information, please contact Michael on +41 (0)22 591 18 80 or email@example.com or Sangna on +44 (0)20 7427 6565 or firstname.lastname@example.org