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The Will to leave Brussels
Although the feared post-Brexit Transition Period queues at Dover don’t seem to have materialised as yet, we are now beginning to familiarise ourselves with the real changes to our lives – additional paperwork for importers/exporters; make sure there are six months left on the passport; check the mobile roaming charges; pet health certificates; etc.
But what if we own property in the EU – does that have implications for our Wills? The best advice for people who own property abroad has traditionally been to draft a local Will to deal with it. That way, relevant laws and tax rules can be taken into account with confidence. It should also be easier to deal with the property following a death using a local Will instead of a foreign Will.
Certain countries – France, for example – have ‘forced heirship’ rules whereby people are required to leave certain amounts of property to particular relatives. Thus an English Will leaving a house in France to a particular partner/relative/friend may not be valid in France, if it should have been left to a spouse or children. Similarly, trust provisions which apply in England & Wales, a ‘Common law’ jurisdiction, may not work for property in Spain, which is a ‘Civil Law’ jurisdiction.
However, the EU has relatively recently developed laws with the intention of unifying succession rules in Member States – particularly the EU Succession Regulation (EU650/2012), known as Brussels IV, which came into effect in 2015. Under these rules, you can choose that the law of your country of nationality should apply to your Will, instead of the law of the country where any particular property is kept. This applies and is relevant here in England, even though the UK opted out of Brussels IV. For the avoidance of any doubt, you should express your choice of law explicitly and clearly, ideally in the Will or codicil, but alternatively in a separate declaration.
There may be public policy exceptions in some areas, but by choosing the relevant law which applies, you should be able to determine such issues as choice of beneficiaries, disinheriting a family member, the status of lifetime gifts/debts, etc.
In England, “Testamentary freedom” is regarded as a fundamental principle (notwithstanding the option for certain categories of ‘dependant’ to make a claim for ‘reasonable financial provision’ against a dead person’s Estate) and so England & Wales would often be a preferred choice of law.
In the absence of a specific choice, the default position is that the law of the country of your ‘habitual residence’ will be applied. This may be open to argument, for people with strong connections to more than one country, and the application of the law would also be less certain. Accordingly, the safest approach for people with connections to more than one jurisdiction is to make a ‘Choice of Law’ statement, particularly in any cases of uncertainty.
Of course, you cannot always avoid taxes in every jurisdiction, while the application of the new laws remains less than certain while they continue to develop. Individual circumstances will dictate what can be done, as well as what ought to be done. However, the overall message, for many reasons, is that leaving things to chance won’t get things done the way you would want. Taking proper Will drafting and tax advice, coupled with putting the right documents in place, is the best way of avoiding nasty surprises for the family following a death.
Having qualified in a West End firm in 2004 and worked for several years with a Legal 500 firm, Paul Denza, now with New Malden firm, Pearson Hards, is a senior, STEP-qualified Solicitor in the wealth management field, experienced in complex tax & estate planning, will drafting, probate and trusts. Recommended in the Legal 500 as “extremely methodical and professional”, his main focus is on the client’s best interests.
Paul Denza can be reached at Pearson Hards solicitors on 0208 949 9500.