EU Succession Regulation

Different jurisdictions have very different rules when it comes to the question of inheritance. Many countries have forced heirship rules, which mean that by law certain shares in your estate must pass to close family members.

For many people, the question of which country's probate laws will apply to their estate is a straightforward one.

However, this might be a more complex question if you:

• Have lived in multiple countries.
• Own assets overseas.
• Consider your permanent home to be a different country to the one in which you currently reside.

Just as different countries have different laws on probate itself, they also have different laws on determining which legal system will apply in situations where an estate has links to multiple jurisdictions. These laws can often be in conflict with each other, which can make it very difficult to determine how to correctly administer a cross-border estate.

The EU Succession Regulation was designed to reduce this uncertainty by setting out common conflict of laws rules for the EU member states to which it applies. These shared rules help to more easily determine which country's laws will govern someone's inheritance when they die.

The default position of the EU Succession Regulation is that the law of the country where an individual was habitually resident at the time of their death will govern the inheritance of their estate as a whole.

The regulation applies to deaths that occurred from 17th August 2015.

Which countries does the EU Succession Regulation apply in?

Austria	Belgium	Bulgaria	Croatia	Cyprus
Czechia	Estonia	Finland	France	Germany
Greece	Hungary	Italy	Latvia	Lithuania
Luxembourg	Malta	Netherlands	Poland	Portugal
Romania	Slovakia	Slovenia	Spain	Sweden

* EU member states Denmark and Ireland do not participate in the EU Succession Regulation.

** The EU Succession Regulation does not currently apply in countries that have been granted candidate status (including Moldova, Georgia, Montenegro, North Macedonia and Serbia) but it is expected that it would apply if and when candidate countries are granted full EU membership.

How might the regulation affect your estate?

The EU Succession Regulation has never directly applied to the UK, even before the UK left the EU in 2020.

However, it could still have an impact on your estate if:

1. You have a connection with more than one country (for example, if you own a property or business abroad, or if you are a national of one country but live in another).
2. At least one of the countries that you have a connection to is an EU member state in which the EU Succession Regulation applies.

Succession law differs slightly across the three jurisdictions of the UK, but under English law, the question of who will inherit any immoveable property (such as land or buildings) should be determined by the law of the country in which it is located, while the question of who should inherit any moveable property (including money, investments, art and collectibles) should be determined according to the law of the country in which the person who has died was legally domiciled.

This conflicts with EU Succession Regulation, as under the EU regulation all assets belonging to the estate must be administered under the law of the country in which the person who has died was resident in, regardless of the type of asset or where they are located.

This can be particularly important because the succession laws in question could actually determine who is able to benefit from an estate. Though in England we have testamentary freedom, meaning that we are largely able to bequeath our assets to whoever we choose, many other countries have laws that determine exactly who has the right to inherit.

This means that if a British national is living in a country where the EU Succession Regulation applies at the time of their death, that country's succession law could dictate who is able to inherit their estate, even if it contradicts the individual's own wishes.

What other impact could the EU Succession Regulation have on your estate?

If the EU Succession Regulation means that your estate has to be administered under the laws of a country other than England, the impact is likely to be more than on just who can benefit.

Other impacts could be:

• Who administers your estate: Under English succession law, the work of administering your estate will be carried out by the person or people you have named as executors in your Will. (If there is no Will, your closest family members will need to apply to be appointed to take on this role.) However, in most EU countries, it is the beneficiaries of your estate who will take on the task.
• How your estate is taxed: The EU Succession Regulation does not change the tax law of any country. However, many inheritance tax laws, including across the UK, depend on who inherits your estate. If the EU Succession Regulation means that your estate has to be administered under the laws of a country other than England and that country's laws change who will inherit your estate, then this could have a knock-on effect on how your estate is taxed.
• Who can make a claim against your estate and which court will decide: Each country has its own rules not only about how estates must be dealt with after a death, but also about which individuals have the right to make an inheritance claim against an estate. Which jurisdiction your estate is administered under could impact on how vulnerable your estate is to future disputes or inheritance claims, and which court will be able to rule on those claims.

What can you do to prepare for this?

If you are concerned that the EU Succession Regulation may apply to your estate, there is something you can do.

It may be that you don't want your estate to be dealt with under the law of the country in which you are currently resident, and that you would prefer the law of the country you consider your more permanent home to override this.

This can be possible if you make the choice to apply the law of your nationality to your estate rather than the law of the country you are resident in. This is usually done by making a clear statement to this effect in a Will or a codicil.

In some situations, a court may rule that the law of an individual's nationality should apply to their estate after their death, even when they haven't made an explicit choice of law in their Will. This may be because the court is convinced that the individual was more closely connected with the country of their nationality than the country they were resident in. Alternatively, a court may consider it proof enough that the individual had made a Will in accordance with the law of their nationality, even if no explicit statement of choice was made.

However, these types of court rulings are generally exceptions to the rule and cannot be relied upon. The only guaranteed way to ensure that your estate is subject to the succession law in the country of your nationality rather than the country of your residence is to make a clear choice of law in your Will.

What are the benefits of applying the law of your nationality?

Choosing to apply the law of your nationality may or may not be the right choice for you for all sorts of reasons.

An advantage of this option is that it can help to reduce uncertainty by:

• Ensuring that your estate will be governed by the succession law you are most familiar with.
• Removing any future debate over your habitual residence or which country you are most closely connected with.
• Giving you peace of mind that the Will you have written will be able to be followed as planned.
• Enabling fewer issues with conflict of law.

Alternatively, you may prefer your estate to be administered in accordance with the rule of law belonging to the country you are currently resident in. This might be because it would be beneficial in terms of tax, because you are happy with the heirship rules in that country, or because you believe the process would be more straightforward for those closest to you.

Example

Janet and Martin are British, but have lived in Cyprus since their retirement. They spend the majority of the year at the house they own in Cyprus, though they do still own a property in Devon and consider England their permanent home.

If Janet and Martin were to die without accounting for the EU Succession Regulation in their estate planning, their residence in Cyprus would mean that Cypriot succession law would be applied to their estate. This would conflict with the English legal position on the matter, which would be that any immoveable assets based in England – specifically the house in Devon – would need to be dealt with under English succession law. Under the English system of testamentary freedom, Janet and Martin would be able to bequeath the house in Devon to whoever they wished.

However, Janet and Martin would not have the same freedom for their assets in Cyprus, particularly the property they own there. This would be governed by Cypriot succession law, which includes forced heirship rules. Janet and Martin's executors would either have to accept the property being passed down according to what was dictated by Cypriot law, or they would have to deal with a significant legal dispute due to the conflict of law between English and Cypriot succession rules. Luckily, this could all be avoided by Janet and Martin including a choice of English law in their wills. This would reduce the uncertainty in the situation, as if the couple chose to apply the law of their nationality, Cyprus would then need to apply English succession law to their whole estate. The couple would therefore be able to leave both the Devon and the Cypriot properties to whoever they wanted.

How to get support

If you believe that your estate may be affected by the EU Succession Regulation, please get in touch. We offer specialist expertise in cross-border estates such as these.

They will be able to advise you on whether any existing wills you have in place may be treated as making a choice of law, and whether or not you would be happy with this.

Reviewing your existing Will, or making a new one if you don't already have one, can help to ensure that your estate will pass to your chosen beneficiaries in the most tax-efficient way, all while minimising the risk of confusion or dispute.