European Wills Need to Be Reviewed

If you own property in an EU jurisdiction, it is now time to review your will

On 17 August 2015 an EU Succession Regulation came into force, which seeks to harmonise succession law in Europe. Ireland, the UK and Denmark opted out of the Regulation so that the rules do not affect property in those countries but the new rules still have relevance to people with property in the other EU Member States affected by the Regulation, including Irish nationals.

Previously all EU Member States had their own succession rules and administration processes, some of which were radically different from each other and from what we are familiar with in Ireland. Those differences often led to very complex conflict of law problems for property owners in the EU and elsewhere. Forced heirship rules in some jurisdictions give children automatic rights to share in their parent’s estate while other jurisdictions have complete testamentary freedom. Often these rules overlap and conflict making it very unclear who has the right to estates and potentially causing significant tax exposure where there are unintended results.

From 17 August 2015 under the Regulation, generally the succession law of your habitual residence applies to your estate unless you opt for the law of your nationality to apply by including an appropriate choice of law clause in your will. There will also be an EU certificate of succession, which is aimed at making post-death administration easier in EU jurisdictions affected by the Regulation.

Given the Regulation is only at the early stages of implementation and there are differing opinions on how it will be interpreted, EU succession experts are advising that the best approach is to include a choice of law clause in your will if you wish the law of your nationality to apply regardless of your habitual residence. For example, an Irish person with property in France would include a choice of law clause in their will so that Irish succession law would apply to the French property. It is particularly important to also review inheritance tax plans to verify whether those plans are affected by the Regulation.