François Tremosa is a notary based in Toulouse, France.
Thirteen million EU citizens live in a Member State other than their own and twenty-one million citizens from third countries live in an EU Member State.
In order to adapt the rules to this growing mobility and to iron out the difficulties caused by the intricacy of legislation that sometimes has very different roots, EU Regulation 650/2012 on international successions was adopted on 4 July 2012. It provides a simplified framework for people who have private and financial interests in at least two countries, both within and outside the European Union.
The regulation, which came into force on 16 August 2012, will only apply to successions opened from 17 August 2015. This timeframe will allow couples to assess their situation and, possibly, to choose the law that will apply to their succession. Time is of the essence because checking one’s status, studying what is appropriate, fixing estate arrangements, adapting one’s marriage contract, strengthening it with a will, etc., all require reflection and time to accomplish the necessary formalities.
Opening an international succession still inevitably involves a ‘conflict of laws’. To summarise, there are two systems in private international law:
- Division (applied in France and the United Kingdom, for instance). The applicable law with regard to moveable property and financial assets is that of the last habitual residence of the deceased. For immovable property, it is the law of the country where the property is situated.
- Unity (model used in Denmark, Germany, Italy, Portugal, Spain, etc.). The notary in charge of the succession applies a single law for all the property: that of the nationality of the deceased or of his/her last domicile.
The European regulation simplifies the rules and gives each citizen the possibility to choose the legislation he/she wishes to be applied when the time comes. The regulation offers three options:
- The principle: application of the law of the State in which the deceased will have his/her habitual residence at the time of death, even if this is the law of a State that is not a member of the European Union. A single law will govern the whole succession.
- The exception: when, exceptionally, the circumstances present a situation whereby, at the time of death, the deceased had manifestly closer connections with another state, the prevailing law will be that of this state.
- The option: possibility to choose the law of one of the states whose nationality one possesses. This option is set out in a declaration in the form of a ‘disposition of property upon death’.
Although the regulation applies to all aspects of a succession (place it was opened, devolution, liquidation, division and administration), it explicitly excludes everything related to donations, life insurance contracts, tontines, trusts, matrimonial property regimes, maintenance obligations, the nature of rights in rem and taxation.
The rules regarding this last point do not change. Each country in which either the deceased or one of the heirs resides, in addition to each country in which an element of the estate can be found, maintains the right to tax the transfer. With all countries applying their own legislation, bilateral international conventions sometimes make it possible to avoid the inconvenience of double taxation.
The regulation also simplifies procedures with which heirs are confronted in order to receive possession of property in the estate and it coordinates the legal systems with respect to the administration and liquidation of the estate. Fully recognised in all the Member States, the European Certificate of Succession (ECS) will enable interested parties to assert their status as heir or administrator of a succession without any other formalities in all EU countries. It will use a standard form, drawn up by the local authority, specifying:
- The law applicable to the succession and the circumstances in fact and in law used to determine this law.
- The elements in fact and law giving rise to the rights and powers of heirs, legatees or executors of wills.
- The capacity and rights of each heir.
- The list of assets and rights for any given heir.
- The powers of the executor of the will.
The ECS is currently being finalised by the Member States and the Commission according to the comitology procedure. A proposal for a register of ECSs is also being discussed, and would make it possible to find out easily about an ECS in any other Member State.
This work will add the final piece to the jigsaw puzzle that is the new regulation. Legal professionals, and notaries in particular, want a agreement to be reached quickly so they can prepare appropriately for its use, in the interests of European citizens.