If you own any assets abroad or are considering investing in a holiday property in a foreign country, it is important that you think about making a will or reviewing your existing will to ensure that your wishes are carried out and your overseas assets pass to your intended beneficiaries. This is because, even if you have made a will under English law, it does not automatically guarantee that your overseas property will go to whoever you chose to inherit your property in your English will.
If the foreign property is located in an EU member state, such as France, the EU Succession Regulation which came into force on 17 August 2015 will apply to the succession of your estate in France.
The EU Succession Regulation is binding in all the EU member states excepting the UK, Ireland and Denmark. Although the Regulation does not apply in the UK, it affects the way that the conflict of laws rules in England and Wales, Scotland and Northern Ireland interact with the rules of the EU member states where it does apply. The conflict of laws rules are the rules that each country has to decide which country’s law will govern who inherits your estate when you die.
The Regulation says that the law applicable to your succession will be the law of the member state in which you were habitually resident at the time of your death but gives you the option of expressly choosing the law of your nationality when you make a will.
For example, if you are an UK national and have made an English will, but you own a holiday cottage in France and your main place of residence at the time of your death is the UK, it is likely that English law will be applied to your succession in France. This will ensure that the freedom to leave your property to whoever you wish under English law is respected.
However, if you do nothing and die without a will, the English conflict of laws rules will be applied to your succession in France. These rules say that the succession of immovable assets, such as land or residential property, is governed by the law where the assets are located. If your holiday property is located in France, French succession laws and, particularly, the French “forced heirship rules” will dictate the way in which your holiday property is inherited when you die.
Similarly, if you are an UK national and you make an English will but your habitual place of residence when you die is France, where you own a holiday cottage, the French succession rules will govern who inherits your entire estate. This situation can be avoided by including a choice of English law in your will, in which case France will apply English law to your whole estate.
Brexit will surely have an impact on how the UK is regarded by the other EU member states when they apply the EU Succession Regulation and the current choices available to UK nationals may end once the formal exit from the European Union by the UK has taken place.
An alternative when planning for the succession of your foreign property is to make a will in the country where the property is located and, therefore, exclude the foreign property from your English will. This has the advantage after your death of saving the time and expense of validating your English will in a foreign country and expediting the succession of your foreign property.
Before taking any steps mentioned in this article, you should take professional legal advice. This article is based on current regulations which may be subject to change.
If you would like further information please feel free to contact our Trusts and Estates team on 01483 887766 or by email at firstname.lastname@example.org.