Preliminary remark: The regulation is an instrument of the European Union which must make sure to have the same meaning in all official languages. The English version, therefore, does not necessarily contain traditional terms of Legal English and often reflects categories of continental legal tradition. It must always be construed “autonomously”, i.e. according to its own meaning and the notions used in other EU instruments and in line with the meaning of the words in the other official languages. Only this will ensure an equal or at least similar application of the regulation in all member states, which means giving the regulation the intended effet utile.
What does it apply to?
All forms of transfer of assets, rights and obligations by reason of death1 from the opening to the transfer of ownership to the beneficiaries, including administration of the estate and liability for the debts2.
Legal capacity to make dispositions by reason of death3.
Trusts if these are created on the occasion of a succession as far as the devolution of the assets and the determination of the beneficiaries are concerned4.The English word trust is also used in the Czech, German, French and Spanish text (however not in the Bulgarian and Greek ones). So this term is to be construed in its traditional meaning in legal English.
Internal conflicts of laws in states with more than one legal system5.
It only applies to the question which (national) law will be applicable to a succession and provides some rules for cross-border probate matters.
What does it not apply to?
Revenue matters6.
Administrative matters of a public-law nature7.
The question whether a person has the nationality of a member state8. This question will often arise as incidental question which needs to be separately attached.
Status9 and legal capacity except for dispositions by reason of death10.
Matrimonial property regimes and property regimes of relationships with comparable effects11 even if these are ended by death12.
Marriage settlements to the extent that they do not deal with succession matters13.
Gifts14.
Pension plans, insurance contracts and similar15.
What happens to companies and shares in companies upon the death of a member16.
The nature of rights in rem17.
Creation, administration and dissolution of trusts in general with the above exception18.
Certain immovable property, certain enterprises and other special categories of assets which for economic, family or social considerations are subject to special rules in the lexreisitae (possible example: the fondopatrimoniale in Italian law). However, this does not mean a fragmentation of the succession in principle nor higher reserved shares19.
Formal validity ofdispositions of property falling under the Hague Convention of 5 October 196120.
The regulation does not change the national inheritance laws as such. It does not introduce reserved shares for children or spouses into any national law (particularly not into English law which offers family provision to address the same issue).
In which countries will it apply?
Not in Denmark21. The U.K. and Ireland may opt in later22, but have not done so yet. All other EU member states are bound.
The regulation does not preclude the application of the Convention of 19 November 1934 of the Nordic countries23 of which Finland and Sweden are members, too.
From when on will it apply?
It will apply to deaths on 17 August 2015 or afterwards.
What happens to dispositions of property upon death made before that date?
They remain valid (if they were valid under the law applicable until that date)24 or they become valid (if they meet the requirements of the regulation)25. This applies also, but separately from the rules concerning form and content, to choices of law26.
Choice of law, choice of court
Citizens wishing to organize their succession in advance – but not according to the laws of the state where they are living – are not entirely free to choose the law applicable to their succession, not even the law of a third state27. They can only choose the law of the state of their nationality or of one nationality they have – in both alternatives either at the time of choosing or at the time of death -. This means that this choice is only for citizens who do not have the nationality of the member state they live in or who intend to move away from the state of their nationality. Only these people can avoid the application of the law of their last habitual residence by choosing the law of a country they are citizens of. This is intended to avoid a law being chosen with the intention of frustrating the legitimate expectations of persons entitled to a reserved share28.
If the existing Private International Law rules allow more choices than the regulation such a choice should be seriously considered to be made before 17 August 2015! (E.g. if a German citizen chooses the lexreisitae for an immovable property outside Germany.) See also section 5 above.
On the other hand, choices available only under the regulation can already be validly made. They will become effective if the person lives until 17 August 2015.
Courts are not prevented to tackle the evasion of the law such as fraude à la loi29. And some special rules of the lexreisitae cannot be avoided.
So, when the regulation is applicable, a third member state’s law (other than the state of the citizen’s habitual residence and his nationality) can only be chosen by honestly moving there.
Art. 5 para. 1 allows parties concerned by a succession to derogate the courts of the country of the last habitual residence of the deceased to agree that a specific court or “the courts” of the state should have exclusive jurisdiction the law of which the deceased had chosen to apply to his succession.
Attachment in the absence of a choice of law
The general rule is that the law of the country where the deceased had his habitual residence at the time of his death is applicable to the whole succession30.
Referrals to third countries’ laws include their PIL32Renvois (referrals back to the member state) will be accepted32.
There will be no fragmentation of the succession so that the same law applies to it irrespective of the nature of the assets and regardless of whether the assets are located in another member state33.
However, as one of the purposes of the regulation is to avoid contradictory results among the member states34 I think there is good reason to consider whether to accept or not a fragmentation of the succession where this results from the PIL rules of a country where the regulation does not apply. If, e.g., foreign conflict-of-laws rules refer back (i.e. amount to a renvoi) for a part of the succession (e.g. for land and/or movables to the law of the country where this lies), the acceptance of the renvoi (under art. 34) and of the fragmentation could avoid contradictory results between continental European and other probate courts.
But it appears that this will not happen in the apparently most likely case (an English resident’s villa in, e.g., Spain): here an English court would apply English law to the movables and would find a renvoi (now in the Spanish law; as of 17 August 2015) in the uniform EU law and then apply English law to the villa, too35. This means an uncontradictory result compared with the view of a Spanish probate court, if this gives preference to the principle of non-fragmentation instead of accepting the renvoi.
If instead, the English national had retired to his Spanish villa which means he became habitually resident in Spain, a Spanish probate court would now look at English conflict-of-laws rules first and find a renvoi for the villa, but after 17 August 2015 would apply Spanish law to everything. If an English probate court would be seized it would find a referral to the (Spanish) lexreisitae for the villa and the law of the domicile for the rest. Then contradictory results could only arise if the English court sees the Englishman still domiciled in England in spite of his habitual residence in Spain (which the Englishman could avoid by making a choice of law in his will).
If the Englishman leaves a will disinheriting his wife and children, under Spanish law they would nevertheless inherit a property title (e.g. in the villa) according to their reserved share (in England also labelled as “forced heirship”) whereas in England these would have to apply for (reasonable) family provision. In Germany, Austria and the Netherlands (and maybe some other countries, too) the reserved share does not amount to a portion of property but is a claim for money.
Courts are not prevented to tackle the evasion of the law such as fraude à la loi36.
Apparently after some state parliaments had referred to the principle of subsidiarity the regulation has refrained from defining habitual residence but appealed to the authorities which circumstances they should take into account for determining it (in order to hopefully avoid different results depending on which state’s courts apply the regulation), summarizing that the habitual residence should reveal a close and stable connection with the state concerned37. The law of the state of last habitual residence can be abandoned in favour of a manifestly closer connection to another country38.
Exceptions: Restrictions by the lexreisitae and ordre public
Some restrictions for special protection purposes of the place where an asset is located will apply instead of the law applicable to the succession39. This is comparable to the mandatory rules which cannot be derogated for contractual obligations.
Of course there is also an ordre public clause40.
Form, validity
Art. 27 para. 1 contains 5 different rules which favour the formal validity of dispositions41. So there will be only few cases left where disposition could be invalid, e.g. if a German citizen living in Germany types his will on a type-writer or prints out a document drafted on his PC. But if this German wants to make his will not hand-written and without intervention of a notary, it will be sufficient that he travels to a country where type-written wills are formally valid and makes it there42.
Art. 26 contains the “usual suspects” for rules of substantive validity.
Available instruments
The regulation distinguishes:
- Agreements as to succession which are only valid if they would be valid under the law applicable to the succession in question43 and which can be part of matrimonial settlements as well44 (apparently English law provides for various types of these agreements but does not use this term).
- Other dispositions of property upon death.45 These clearly goes further than wills in the traditional meaning.
So who needs advice already now?
- People who are citizens of Austria, the Czech Republic, Finland, Germany, Greece, Hungary, Italy, Poland, Portugal, Sweden, Slovakia, Slovenia or Spain, but live in a different country or eventually have property in a different country.
- People who – without being citizens – live in Austria, the Czech Republic, Finland, Germany, Greece, Hungary, Italy, Poland, Portugal, Sweden, Slovakia, Slovenia or Spain.
- People who consider moving to another country.
- People who live in different countries (but not just for extended holidays).
- Citizens of Israel, Latvia and some other countrieswith property (including bank accounts) in another country.
- Citizens and residents of countries in the Anglo-Saxon law traditionwith immovable property in another country.
- People who expect that a European Certificate of Succession will be needed for their succession
This is the case because art. 65 para. 3 requires in letters (a) to (e) various personal details of the deceased as well as of other beneficiaries, including “identification number (if applicable)”. So clients should make sure their heirs will find all these details for all persons to be named.
[1] Recital 9
[2] Recital 42
[3] Arts.23 para.2, 26, 1 para. 2 lit. b
[4] Recital 13 sentence 3
[5] Art. 38
[6] Recital 10
[7] Recital 10
[8] Recital 41
[9] Art. 1 para. 2 lit. a
[10] Art. 1 para. 2 lit. b
[11] Art. 1 para. 2 lit. d;life partnership of German law, but not PACS under French law
[12] Recital 12
[13] Recital 12
[14] Art. 1 para. 2 lit. g; recital 14
[15] Art. 1 para. 2 lit. g
[16] Art. 1 para. 2 lit. h and i
[17] Art. 1 para. 2 lit. k
[18] Art. 1 para. 2 lit. j; Recital 13 sentence 1
[19] Recital 54
[20] Art. 75 (1) para. 2; up-dated list of signatories available at www.hcch.net
[21] Recital 83
[22] Recital 82
[23] Art. 75 para. 3; recital 74
[24] Art. 83 para. 3
[25] Art. 83 para.2, eventually also under para. 3
[26] Art. 83 para. 4
[27] Recital 57 sentence 3: referral to the material law; renvois are not accepted
[28] Recital 38
[29] Recitals 26, 52 sentence 2
[30] Art. 21 para. 1
[31] And interlocal rules of countries with more than one legal system (Art. 36): e.g. Spain and United Kingdom, as well as inter-personal rules (Art. 37): e.g. Lebanon, Pakistan
[32] Art. 34; recital 57 sentences 1 and 2
[33] Recital 37
[34] Recital 34
[35] Re Ross, Ross v. Waterfield [1930] 1 Ch 377; Re Duke of Wellington, Glentanar v. Wellington [1947] Ch 506, [1947] 2 All ER 854 (the CA did not refer to this point); Halsbury’s Laws of England, vol. 19 (2011) 5th edition, paras. 311, 741; special thanks to Rupert Lescher of Laytons in London for the input
[36] Recital 26, 52 sentence 2
[37] Recitals 23 to 25
[38] Art. 21 para.2
[39] Art. 30
[40] Art. 35
[41] These rules are aimed to be consistent with those of the Hague Convention of 5 October 1961 on the Conflicts of Laws Relating to the Form of Testamentary Dispositions, recital 52
[42] Art. 27 para. 1 (a)
[43] Art. 25
[44] See recital 12!
[45] Art. 24