- 17 December 2018
- Posted by: Brendan Sharkey
- Category: Probate and Private Client
Making The Right Choice — Succession Law in Ireland in Light of Brussels IV
Overview of Brussels IV
EU Regulation 650/2012 on matters of succession (the “Regulation”) came into force on the 17 August 2015. The intention behind the Regulation is to harmonize European succession laws. Whilst Ireland, the UK and Denmark have opted out of the Regulation it is still of relevance to those with assets in countries that signed up to the Regulation.
What does it mean in practice?
Until this point a person making a Will in Ireland was concerned if such a Will could also successfully deal with foreign assets. It was best practice to make Wills in each country where assets were held. For example, France applies forced heirship rules and an Irish Will seeking to deal with French property may not be effective given such rules.
Now under the Regulation, a single Member State’s law can apply to a deceased’s estate. This law will govern the succession of the deceased’s estate as a whole and shall apply to all of the property forming part of the deceased estate as located in the Member States irrespective of the nature of the assets.
There are a number of important points to note:-
- Ireland, the United Kingdom and Denmark have opted out of the Regulation.
If, for example, a French national living in France and owning both French and Irish freehold property makes a Will in France directing that French law will apply to his entire estate then Ireland will not recognise this direction and will continue to apply Irish law to the Irish freehold property. On the other hand, an Irish national with property in France can specify in their Will that Irish law is to apply to their entire estate meaning that France will apply Irish law to the French assets as opposed to French law.
- The applicable law is dictated by the deceased’s habitual place of residence at the time of death unless the Will directs that the law of the deceased’s nationality is to apply.
Unless specifically provided for in a Will, the law of Ireland will not apply to a deceased person’s property in other Members States. However, if Irish law is designated as the applicable law in a Will then those Members States which adopted the Regulations are bound by them and Irish law will apply. This is not the case for those persons with property in the United Kingdom where the laws of the United Kingdom will apply regardless.
If there is no direction in a Will that the deceased’s state of nationality shall determine the applicable law, then the law which can be directed to apply is then limited by reference to the habitual place of residence of the deceased. A deceased habitual place of residence is determined in accordance with the Regulation which states that the duration and regularity of the deceased’s presence in the Member State concerned will be taken into account to determine their place of habitual residency. Accordingly, the choice of law is limited to the deceased’s state of nationality at the time of making the choice or place of habitual residence at the time of death. The purpose behind this is to avoid a law being chosen which might frustrate the legitimate expectations of persons entitled to a share in deceased’s estate. Accordingly, the Regulation will not support forum shopping.
- The Regulation will not apply to tax law, public administrative law, matrimonial property law or trusts law.
In effect, the Regulation should not apply to areas of civil law other than succession.
- This law is only applicable to deaths after 17 August 2015.
What should I do?
If you have property in any of the Member States except for the United Kingdom and Denmark, and you have made Wills in those Member States then you should consider revisiting your estate planning arrangements to ascertain if matters can now be simplified. For example, you may have been bound to allocate your estate in a particular fashion due to a Member States particular successions rules and you may now be able to overcome this by directing that Irish law applies to your entire estate.
One important point to note is that the Regulation does not affect a Member States tax treatment of a deceased’s estate. Accordingly, any intended revisions should only take place after having obtained relevant legal and tax advice. If you have not already made a Will of any kind and have property outside of Ireland and within one of the Member States, you should consider creating a Will.
These new Regulations are a positive step to harmonizing succession laws between European Members States. Although Ireland had opted out of the Regulations, Irish residents may still benefit from them and making the right choice now will assist in your estate and tax planning for the future.