Succession issues for the modern family with estates with cross-border elements

Delegates from across the world attended STEP’s Special Interest Spotlight Sessions in London, UK on 9 December. Expert panellists discussed the latest issues affecting philanthropic giving, cross-border estates, international clients, business families, contentious trusts and estates, mental incapacity and digital assets.

This is the first in a series of blogs capturing the sessions and the expertise shared. It focuses on the discussion during the session presented by the Cross-Border Estates SIG: New departures: Succession issues for the modern family. Speakers in the session looked how the law in different jurisdictions views cohabitation and defines what a child is and the impact of those legal viewpoints in terms of succession and estates with cross-border elements.

How family is defined in multiple jurisdictions

In England and Wales, there is no specific regime for the unmarried, with claims often made under the Inheritance (Provision for Family and Dependants) Act 1975, whereas married couples and civil partners have certain legal rights and responsibilities upon divorce or death.

In Spain, however, regional differences are significant: the order of succession itself can vary between them. The Civil Code itself doesn’t refer to cohabitating couples. Regulation is regional.

The US is similar to Spain: 50 states means that matrimonial law variation is wide ranging. The federal laws bear mainly on taxation; yet DC has its own matrimonial law, with county laws further deviating from federal principles.

Cohabitation, often referred to as ‘common law’ marriage, is only legally recognised in eight US states. Most US states will respect cohabitants, bar 14 states that actively deny their recognition. At a state level, and in a state that recognises civil partnerships, a relationship is recognised and tax relief is applicable. At federal level, however, it is still not recognised. Marriage is a necessity for these reliefs. Ultimately, for unmarried partners, their rights are not the same as married partners.

In Italy, registering a civil partnership is recognised under the Civil Code. The same treatments as a marriage are generally applied. However, for cohabitating couples, the same rights are not afforded: the ‘Cirinnà’ law does not provide any succession rights. Continuing to inhabit the property the cohabitating couple shared during their lifetime together is not a certainty.

In Poland, family law and succession is much more traditional. Same-sex marriage is not legally recognised, and neither are registered or non-registered ‘partnerships’. There is no statutory right to heirship. Despite this, the percentage of children born out of wedlock is growing. Planning is very important as inheritance by will takes precedence over statutory inheritance.

In France, the legal definition of marriage, union libre, came about in 1999. The Civil Code recognises both same and different sex couples, with marriage itself being considered a form of civil partnership. They are, however, treated differently, especially in relation to the maintenance and dissolution of the relationship, children’s legitimacy status and succession rights. Marriage is dealt with by case law under general tort law: it is not a legal framework.

What is the definition of a child?

Across England and Wales, France, Italy, Poland, Spain and the US, the answer to this question is more complex than one might expect. Italy’s approach is that ‘a child is a child’, though their treatment depends on the status of the parents’ civil partnership or marriage. Succession rights are the same, however. Adoption is not open to same-sex couples, and surrogacy is illegal.

Poland also does not legally recognise surrogacy, though it’s not considered strictly illegal. As same-sex marriages are not recognised, this can create further issues as only one parent can make medical and care decisions for their child. There is a case going through the courts that may change perspectives, however. Only married couples may adopt.

In the US, states individually govern laws around surrogacy, adopted children, step children and children of same-sex couples. Almost no state recognises stepchildren’s right to inherit, with California being the only exception, under certain conditions.

In France, medically assisted reproduction (MAR) has been extended to same-sex female couples. In terms of legitimacy, a notaire must be informed before the conception of the child. Children born from MAR have a right of access to the details of their origin. Surrogacy is still prohibited in France. Adoption is open to same-sex spouses and civil partnerships (with consent).

The session concluded with a case study involving the US, UK, Poland and France. With property dotted all over the world, a child by surrogacy, a non-married partner and a biological child, the panel disentangled the treatment of the succession arrangements, jurisdiction by jurisdiction. They also provided suggestions as to how the deceased could have been advised during their lifetime to achieve their aims in each jurisdiction. Ultimately, the session highlighted how important in-life planning is for those with cross-border estates, and the damage that can be done if it is neglected.

Liz Skinner, Communications Manager at STEP

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