New EU regulation ... yawn .....but unfortunately all lawyers who draft wills must be aware of EU Succession Regulation No. 650/2012 which comes into force fully in August 2015.
What is EU Succession Regulation No. 650/2012? (Yes, you do need to keep reading)
Different member states of the EU have different private international law rules and for some time the EU has been working on regulating the succession rules across the EU without altering the individual succession laws of member states. Hmmm how can something be regulated but not significantly affected? With the snappily entitled “Regulation (EU) 650/2012” that’s how.
Now this regulation is somewhat dry to read and runs to 28 pages so I cannot pretend to have embraced every letter of the regulation but my understanding of the terms of the regulation, until further information and guidance becomes available over the next year, is as follows:
• Regulation (EU) 650/2012 provides that a person may choose either the law of the country in which they are habitually resident when they die or the law of their nationality to apply to their succession as a whole.
• This will help to ensure the simplification of administration of cross border estates and avoid conflicts between the private international law rules of different member states.
• As mentioned, the intention of the changes is not to infringe on the internal laws of EU countries, so aspects of succession such as who the beneficiaries are and the taxation of estates will remain within the jurisdiction of the relevant country.
• The regulation also creates a European Certificate of Succession to enable a person to prove his or her status and rights as heir or his or her powers as administrator of the estate or executor of the will without further formalities in member states. It is unclear as to how much use this will be to UK practitioners but it will certainly have some value in that it will be a uniform document that can be presented in cases of a deceased who resided in another EU country but held assets in the UK.
Although the UK and Irish Governments have not opted in to this regulation, the estates of UK nationals who live anywhere in the EU (except Ireland and Denmark who also opted out) will be subject to the succession laws in the country in which they are habitually resident unless they choose otherwise. When drafting wills for such clients, therefore, one will need to ensure that careful instructions are taken and incorporated into the will on this point.
It is therefore essential for Private Client practitioners to understand the new regulation that will be fully applicable from August 2015.
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