New EU rules give UK families more freedom over legacies

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The EU Succession Regulation comes into force today, giving much more freedom to families as to how they pass on assets they own in the EU in their wills.

This could be particularly important for UK families with holiday homes in the EU or for those with parents and grandparents living in the EU.

George Hodgson, Deputy CEO of STEP, the professional body for specialists in family inheritance and related areas commented: “Many European countries have so-called ‘forced heirship’ rules, where the law lays down precisely how someone’s assets have to be passed on within the family after death. Until now, for example, a UK family with a holiday home in France had very limited options as to how that could be passed on through the family. The new regulations change that, and should be a prompt to everyone with EU assets to review their inheritance plans”.

Mr Hodgson cautioned that the new rules are complex, but even though the UK itself has opted out of the Succession Regulation, they still give potentially valuable new rights to those with property or other assets in the EU. Given the complexity, however, it would be wise to seek specialist advice as to how to change any inheritance plans.

The EU Succession Regulation comes into force today, Monday 17 August. It has the potential to affect the estates of any individuals with any connection to any EU Member State in which the Succession Regulation has direct application.

The UK has opted out of the EU Succession Regulation, but British owners of holiday homes in EU member states such as France should update their wills and draw up French ones to avoid the country’s forced heirship rules.

Details on the new regulation can be found at http://ec.europa.eu/justice/civil/family-matters/successions/index_en.htm and an example of how the new rules might work is attached.

An example:

Clare is a British citizen who is resident in England but has a French holiday home she uses a few weeks each year. French forced heirship rules would oblige her to leave her holiday home to her husband and children, with clear rules as to how it would be divided. She would like instead to leave it to her brother, since it was bought with money from their grandparents.

Until today, the law governing who receives the French house on Clare’s death was generally French law. But as of 17 August 2015, this need no longer be the case.

The new regulations say that someone can generally choose the law applicable to their inheritance. This can either be the law applying where the deceased had their ‘habitual residence’ at the time of death, or the law of the state of nationality at the time of making the choice, or at the time of death.

As a British citizen, therefore,  Clare can now opt to have her French holiday home treated under English law and leave it to her brother.

George Hodgson is STEP Deputy Chief Executive

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