Cross border successions

13 Nov 2015, Legal, by Athina Ledaki, Lawyer/Accredited Mediator (CEDR)

European citizens’ choice to buy property in Greece has undoubtedly increased mobility of individuals within the limits of the European Union and has created several queries when it comes to the settlement of cross-borders inheritances as the application of multiple inheritance laws can create conflicts of law.


 

In response, EU Regulation 650/2012 on “jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of o European Certificate of Succession”, also referred to as “Brussels IV” was originally adopted on the 4th of August 2012, but came into force on 16 August 2012, only applies to successions opened from 17 August 2015, aiming to define which law should apply in governing a succession, simplify the rules and give each citizen the possibility to choose the legislation he wishes to be applied when the time comes.

       Roughly:

  • Pursuant the provisions of the Regulation, it provides a general rule that the “law applicable to the succession in its entirety, shall be the law of the State in which the deceased had his habitual residence at the time of death” even if this is the law of a State that is not a member of the European Union. There is no definition of “habitual residence” in the Regulation, however Recital 23 of the Regulation states: “In order to determine the habitual residence, the authority dealing with the succession should make an overall assessment of the circumstances of the life of the deceased during the years preceding his death and at the time of his death, taking into account of all relevant factual elements, in particular the duration and regularity of the deceased’s presence in the State concerned and the reasons for that presence. The habitual residence thus determined should reveal a close and stable connection with the State concerned taking into account the specific aims of this Regulation”.
  • Exceptionally, when the circumstances present a situation whereby, at the time of death, the deceased had manifestly closer connections with another state, the prevailing law will be that of this state. If, for instance, the deceased had moved to the State of his habitual residence fairly recently before his death and all the circumstances of the case indicate that he was manifestly more closely connected with another State, we arrive at the conclusion that the law applicable to the succession should not be the law of the State of the habitual residence of the deceased but rather the law of the State with which the deceased was manifestly more closely connected.
  • The choice: The innovation in the provisions of the Regulation is that individuals can elect for their country’s of origin succession laws to apply, a choice limited to the law of the State of their nationality in order to ensure a connection between the deceased and the law chosen, which must be necessarily made before death. If not, then restrictive Greek succession law will apply and the deceased person’s family cannot opt for another inheritance law in respect of his assets after his death. The choice of law should be made expressly in a declaration in the form of a disposition of property upon death or be demonstrated by the terms of such a disposition. So, practically, it should be made clear in your will if you wish that the law of your country of nationality applies with regard to your inheritance issues or not.

The European Certificate of Succession: Fully recognized in all Member States, the European Certificate of Succession (ECS) enables the interested parties to assert their status as heir or administrator of a succession without any other formalities in all EU countries, defines the law applicable to the succession and the circumstances in fact and in law used to determine this law, the rights of each heir and the list of assets and rights for each heir. Pursuant the Commission Implementing Regulation 1329/2014/09-12-2014 the Forms referred to in Regulation were established, to be drawn up by the local authority with regard to the formalities required for the registration of immovable property in the Member State in which the register is kept. The application form is attached below. The use of the Certificate is not mandatory.

       Note that:

  • Although the regulation applies to all aspects of a succession Brussels IV regulations do not apply to tax, so each country in which either the deceased or one of the heirs resides, in addition to each country in which an element of the estate can be found, maintains the right to tax the transfer, therefore e.g. UK nationals cannot opt for UK inheritance tax rates to apply instead of Greek succession tax. So, it is advisable before deciding to opt for Greek or your country’s succession law, to get some legal advice on both Greek and your country’s tax rates and allowances which may vary according to who the beneficiary is.
  • As Denmark, Ireland and the United Kingdom do not participate in the Regulation, succession procedures handled by the authorities of these three EU countries will continue to be governed by their national rules.

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