EU succession rules and French holiday cottages
With the summer holidays in full swing, and with many Brits heading to and returning from the continent for their summer holidays, the EU finally introduced its long awaited reform of its succession rules.
Snappily called EU Regulation number 650/2012, or Brussels IV, the rules are designed to simplify the rules for EU residents as to what happens to their estates when they die.
The UK, alongside Denmark and Ireland, have opted out of the new regulation, so what does this mean for you?
Well, if you live in England and have all your assets in this country the regulation will have little or no effect on you.
However, if you are resident in England and have assets in other countries in the European Union, such as a holiday cottage in France, then the regulation may have an effect on your estate.
The regulation is intended to harmonise and simplify the succession laws when a person dies by allowing the single national law of where the person was habitually resident, or that of another state which they were more closely linked at the time of their death, to apply to all their assets.
The regulation allows the person to make an election in their Will that their national law is to apply to their estate. For Brits with a holiday home in France, for example, this means that the complicated forced heirship rules could now be avoided.
Sound too good to be true? Well it could be as there are some complexities that need to be considered – the main one being the use of Trusts.
Trusts are commonly used in English wills for tax planning and protection purposes, but many European regimes do not recognise Trusts, and that could be problematic.
There are also other reasons why a local will would be more appropriate in certain circumstances, notable that the regulation is also a completely new concept and it is unclear at this stage how the continental and European Courts will view and apply the regulation.
In view of the potential effects of the regulation, anybody with assets in Europe should reconsider their Will and take further advice to avoid potential complications on their death.