The new rules are designed to ensure that nationals of any state, including non-EU states and EU states, can make a choice through their Will to apply their own national laws to the succession assets in other EU states.
In England and Wales, when it comes to individuals leaving property in their Wills, the concept of “freedom of testamentary disposition” or the ability to leave any property and assets on death to individuals, entities or organisations, in whatever proportion the deceased desires, is well known.
This is not, the case in the rest of Europe, where “forced heirship rules” exist. These rules, which differ in their application across EU states, impose succession principals, so that the deceased cannot control how property is passed down to spouses, children or other beneficiaries.
This all changes on the 17 of August 2015 when the European Succession Regulations, better known as Brussels IV, come into effect.
Brussels IV
The new law will make it considerably simpler to settle international succession. It provides a single criterion for determining both the jurisdiction and the law applicable in cross border cases.
It will also provide a European Certificate of Succession, which will allow beneficiaries to prove that they are heirs or administrators, without further formalities throughout the EU as well as allowing personal representatives the authority to act across borders.
The applicable law will be the law of the country where the deceased had his or her habitual residence, unless:
- The deceased was manifestly more closely associated with another state (which will be decided on a case by case basis) or,
- The deceased elected in their Will for their own national law to apply.
Brussels IV will apply to all deaths after 17 August, and will be binding on all 27 EU member states, except for Denmark, the UK and Ireland.
The UK opted out for a number of reasons, including a lack of clarity around the definition of habitual residence, the role of personal representatives and concerns in relation to claw back on lifetime gifts. As a result, it is unlikely that the UK Government will, any time soon, if ever, opt into this.
It would be a mistake, however, to assume that as the UK has opted out that Brussels IV is not relevant. While for the vast majority of UK nationals there will be no particular need to have any regard for the changes that will apply, Brussels IV remains relevant for:
- UK nationals with property or assets in other EU states, and
- The nationals of other EU states residing here.
