The EU Succession Regulation - Recent Developments
We look back at the recent developments since the EU Succession Regulation (or Brussels IV as it is also known) came into force, with the intention of harmonising estate administration across the European Union.
Britain may be on the verge of leaving the EU, but the Regulation has had, and will continue to have, an impact on the administration of UK estates with a European element. Brexit will have little effect on the application of the Regulation in the UK, as this country, together with Ireland and Denmark, opted out when Brussels IV was adopted by other member states in August 2015.
Objective of the Regulation
The idea behind the Regulation was to make it easier to administer estates where the deceased owned property in more than one jurisdiction. Until the Regulation came into force, each EU member state applied its own rules to international matters often creating complicated situations and confusion over which country's law should apply.
The Regulation provides that where EU citizens have assets in two or more countries, a single law of succession will apply to their Estate on death. The general principle is that the law applicable to the succession as a whole should be the law of the state in which the deceased was habitually resident at the time of death.
However those who do not wish the law of their habitual residence to apply may make a choice that the law of their nationality will apply to their Estate on death. So for a German national habitually resident in Spain, Spanish law applies to the Estate on death, unless the testator has made an election in his Will that German law should apply.
Similarly a Briton who is habitually resident in France can choose that the law of the part of the UK with which they are most closely associated, for example England and Wales, applies to their whole Estate on death. This avoids forced heirship and is therefore potentially of benefit to those who take advantage of it. However, it is vital to ensure that those in such a position make a Will stating their choice of law.
A Briton who merely owns a holiday home in France, but who is habitually resident in the UK, may also elect for English (or Scottish or Northern Irish) law to apply to that property on death. Again the individual's Will must make the choice of law clear.
The Cases
The first cases involving Brussels IV have now been decided and they show that there is a clear desire on the part of the ECJ to ensure that the Regulation is binding, even if it means that legal concepts that are not normally recognised in a particular state are applied.
For example, the first decided case, Kubicka (Case C-218/16 of 12 October 2017), involved a Polish woman, resident in Germany, who wanted the law of her nationality to apply to her estate on death. She wanted her husband to be entitled to inherit her share of the matrimonial home under the doctrine of "vindication", a concept which exists in Poland, but not Germany. The Polish notary she instructed said he could not draft the Will as she wished as it would be rejected in Germany. The ECJ held that legacy by vindication had to be recognised and applied in Germany.
One of the cornerstones of the Regulation was the introduction of the European certificate of succession, and other decided cases concerning this. The member state which has jurisdiction over succession is entitled to issue a certificate of succession confirming the status of the heirs and executors. This should then be accepted by other member states that have adopted the Regulation without the need for resealing or for a separate grant of probate to be issued. In some countries the certificate is issued by the court, in others by notaries. Under the EU Succession Regulation a single legal system must govern the succession as a whole. Oberle (Case C-20/17 of 21 June 2018) was a Franco-German case. A French certificate of succession had been obtained, but one of the sons of the deceased tried to obtain a German certificate limited to the German property in the estate. The ECJ held that only one certificate of succession should be made.
As the UK has opted out, however, a European certificate of succession issued by a member state won't be given automatic recognition in the UK and a grant of probate will still be needed for UK assets.
Those who may be affected by the above should take legal advice to ensure that their Will is correctly drafted.