The EU Succession Regulation more commonly known as the Brussels IV (the Regulation) came into force in 2015. The main objective of the Regulation is to simplify cross-border estates and succession planning which is particularly important with more geographic mobility in the world today than ever before.
Position prior to the Regulation
Prior to the introduction of the Regulation, if an individual had connections to the UK and more than one EU member state, each state had its own rules to determine which court had jurisdiction. This in turn lead to uncertainty and complications in the estate administration.
Position after the Regulation
The key provision of the Regulation is that the court in which the deceased died habitually resident have jurisdiction in succession matters. The Regulation also does not distinguish between property that is movable or immovable.
The default position under the Regulation may, however, be overridden in two circumstances:
- Habitual residence can be displaced by an election made in an individual’s Will for the law of their nationality to apply; or
- The individual is manifestly more closely connected with another jurisdiction at the date of their death.
For example, if an individual is habitually resident in a jurisdiction subject to the Regulation, but their Will contains an election for English law to apply to their estate as this is their nationality, this could effectively apply English law to their estate across not just the UK but also other member states in which they hold assets.
How does an EU regulation effect the UK?
Despite the UK not being part of the EU, the Regulation is important for individuals who have assets and connections to the UK and an EU Member State.
In 2015, the UK was one of the few Member States to opt out of the Regulation and considered a “third state”. Practically, this means that whilst the UK is not bound by the Regulation or subject to its application, it does affect the way in which conflict of law rules in the UK interact with the EU Member States where the Regulation does apply.
It is important to add that there has been no change in how the Regulation affects the UK since Brexit.
The importance of making an election and a practical example
Rose is a UK national, who has lived in Spain for the last 15 years. She still has a property in the UK that her husband lives in, but they are separated, and she has two estranged children she has not seen for 20 years. Spain has forced heirship rules and Rose does not wish for her children or husband to benefit from her estate and instead wishes for her estate to pass to her nephews.
Rose could therefore put in place a worldwide Will that includes an election for the law of her nationality to apply to the succession of her estate therefore disapplying forced heirship. She would therefore have testamentary freedom under English law to leave her estate to her nephews regardless of the fact she is habitually resident in Spain.
A nationality election also gives greater certainty than relying on habitual residence as a default. This is particularly relevant for internationally mobile individuals who move around regularly therefore meaning that their habitual residence is changing constantly. By electing for the law of their nationality to apply to their estate, this gives them certainty of the succession of their estate in relation to their assets within the EU. Rose in this circumstance would therefore also have certainty that this will remain the position even if she moves in the future.
If you have any queries relating to cross-border estate planning, please contact Ben Rosen or Eleanor Catling at Quastels LLP.
