Don’t worry, this is not just yet another exhortation telling you to make a will (although it would be helpful if you came to the conclusion that you should be getting advice on how the changes in the law which I am going to tell you about in a moment will affect your will and property). The good news is that life has just become both easier and more flexible if you are a national of an EU member state but are habitually resident in another member state and own property in at least one of them. This is because of Regulation (EU) No 650/2012, also known as the ‘Brussels IV Regulation’ in the legal trade.
The idea behind the Regulation was first mooted in a European Union report on wills and succession some 10 years ago; it finally comes fully into force on 17 August 2015 and will apply to the estates of individuals dying after that date. The UK has not actually opted into the Regulation (and neither have Denmark and Ireland) but it still applies if you are a British citizen living in the Brussels IV area.
Buried in Articles 21 is a new general rule which provides that “[u]nless otherwise provided for in this Regulation, the law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death”. In the past, a British citizen who was habitually resident, for example, in Spain, would have made two wills: one dealing with his property in the UK and the other dealing with property located in Spain. In practical terms, he must now update his will if he wants to avoid all of his property located outside of the UK to become subject to Spanish forced inheritance rules. The solution lies in Article 22, which permits that “[a] person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death”. That choice of law must be made expressly in the will. The rules therefore now permit our British citizen to make just one will, subject to an express choice of English law, in which he overrides the effect of Spanish law and leaves both his UK and Spanish property pursuant to English inheritance law with its freedom of disposition.
As always, the devil is in the details and the rules are of course somewhat more complicated than that but the basic idea behind the changes is still very welcome. Just make sure that you obtain advice on your specific circumstances, because matters such as your matrimonial property regime and tax implications must also be factored into the equation.
By Gregor Kleinknecht, Partner in the Dispute Resolution and Business Services department at Hunters incorporating May May & Merrimans.