New EU Succession Regulations come into force on 17 August 2015 with the intention of harmonising the differing, and sometimes conflicting, laws of the EU countries in relation to the succession of assets.

The regulations have been established to make things less complicated, but it remains to be seen whether they will in practice. The plan is that rather than different laws of different countries applying to different assets, just one country’s laws will govern the succession of all the assets in the deceased’s estate.

The new rules allow people to state in their Wills whether they would like the law of their nationality (or one of their nationalities) to apply to their estate. If no declaration is made then the default position will apply; generally being the laws of the country in which the individual is habitually resident. It should be noted that habitual residence is not defined.

The regulations only deal with the laws of succession and not tax matters, including Inheritance Tax.

The UK, Denmark and Ireland have opted out of the regulations. Despite this, the new legislation will be relevant to individuals with assets in participating EU countries including UK residents and nationals.

This is a developing area and some of the finer details of the impact this will have on individuals with assets in Europe are unlikely to be clear for some months, perhaps years. Until case law is established the waters will stay muddy and there must be doubt as to who would risk the Court costs to find out. However between the nationals and residents of EU members who are participating fully, it is likely to bring a big improvement.

The regulations also provide for the issue of European Certificates of Succession (ECS) although the timetable is not yet clear. This is a document similar to a Grant of Probate and provides proof of who is entitled to the assets of the estate. The ECS will be issued by the authorities of the participating Member State in which the deceased was resident and will be recognised by all of the participating Member States.

Caution may be needed though; as the UK has not signed up to the regulations, a UK national living in France, for example, will still need to obtain a UK Grant of Probate to deal with assets in the UK.

For more information or advice on estate planning please contact Terry Hill on + 44 (0)1903 222277 or email terry.hill@thefrygroup.co.uk

This entry was posted on Tuesday, 16th June 2015 at 4:25 pm and is filed under Financial Planning, News. You can follow any responses to this entry through the RSS 2.0 feed.

Tags: expatriate, Financial, uk