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British citizens with foreign assets - does your will need updating?

View profile for Michael Dunville
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If you own property on mainland Europe, you need to make sure that your will includes appropriate provisions.

Since August 2015 the EU Succession Regulation (EU 650/2012), also known as Brussels IV, has been in force. Although the UK did not sign up to the Regulation, it still has an impact and potentially a great benefit for those UK citizens who have assets located abroad, such as a holiday home in continental Europe.

For UK citizens who own assets in an EU member state (with the exception of Denmark and Ireland), the default position is that the succession of those assets on death will be determined by the law of the country in which the deceased was habitually resident.  The Regulation also allows an individual to specify in their will that the law of the will maker’s nationality will apply to the succession and administration of their estate, rather than the law of the country of their habitual residence.

So why is this relevant and how can this benefit UK nationals? Well in the UK, there is testamentary freedom for someone to leave their assets to whoever they wish, subject to a few exceptions. This is not the case in countries such as France and Spain where forced heirship rules apply.

Forced heirship means that a certain part or certain amount of a deceased’s estate must be transferred to specific family members (normally children). This means a long-lost or estranged child will automatically benefit even where they have had no connection with the deceased parent for a long period of time. A parent in the UK would have the option to exclude or limit that particular child from benefitting from their estate.

Where previously UK citizens owning assets abroad in these forced heirship countries would be compelled to accept the forced heirship rules for the assets they had abroad, now they are able to elect that English law is to apply to the succession of their estate.

For example if a UK citizen owns a holiday home in Spain, he can elect in his will for English law to apply to the succession of his estate, circumventing the Spanish forced heirship rules, meaning he has testamentary freedom to leave his assets to whoever he wants, in accordance with English law.

If that UK citizen had moved abroad and was living in Spain instead and had assets in Spain and in the UK, despite the fact he is habitually resident in Spain, as he is a UK citizen he is able to elect in his will that English law applies to the succession and administration of both his UK and Spanish assets.

The ability now to be able to nominate the law of succession can be of great benefit for UK citizens, so it is a good opportunity for UK citizens and EU citizens alike to review their wills to ensure that the most appropriate law of succession applies to their estate. 

If you think this may affect you and you would like to discuss the changes in more detail or book a will review, please contact Ben Jones on 01923 650850. 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
 

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