Wills, Inheritance and of course Inheritance Taxes are important matters that greatly concern our readers. In this respect we will focus on the EU Proposal for European Regulation on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession and on the effect that this proposal could have on those Wills already made.

The first thing that we must make clear is that this Regulation HAS NOT yet been approved by the European Union; thus we do not know exactly what the final wording will be when it is approved, but we must consider some very important facts.

1. The proposal does not try to unify all the Inheritance Laws of all the countries members of the EU into one Law; neither does it try to make one single European Inheritance Law for all these countries. But it does propose to establish the criteria that should determine which Law (if English, Spanish, Dutch Law, etc) would govern over the succession in each different case.

2. The draft of this regulation favours one uniform unique law for all the assets, which means that the same Law, whatever it is, would apply to ALL of the estate of the deceased, which of course does not coincide with the Inheritance rules of countries like France, the UK or Ireland where one law applies to movable assets (bank accounts etc) and another different law could apply to immovable assets (real estate, houses etc).

3. One of the most striking facts of this potential legislation is that the main criteria to determine which Law should be applied to the Inheritance is the deceased’s habitual (i.e. normal) residence at the time of death. At this point the interpretation of the concept habitual residence is under discussion, as in the UK and Ireland this concept is understood as domicile but it does not necessarily mean the place where you normally live.

This is a very important change because as of today, for example in Spain, the law that applies to a succession is the Law of the nationality of the deceased BUT if this potential legislation passes then the law that will apply, as said, will be the law of the habitual residence. It is also a feature that this potential legislation foresees the possibility of the testator to expressly choose his national law, by stating so on his Will.

As an example, let’s take the case of a British man living permanently in Spain who has assets in both England and Spain. He makes a Spanish Will in the year 2000 leaving everything to his wife, substituting her (in the case she is not able to inherit e.g. if she dies before him) by 1 of their 3 children.

If this man passed away NOW (when the regulation is not approved) his Will in principle will be perfectly valid and enforceable, as the applicable law would be the national law of the deceased/testator (English Law) which allows him to leave all assets to his wife. But if the same gentlemen passes away AFTER the potential referred regulation is approved (if it is approved) the Will would not be directly enforceable, as in principle, the applicable Law to his succession would be the law of his habitual residence i.e. in this case Spanish Law, and according to this law, at least 2/3rds of the deceased’s assets should go to his children (and thus not to his wife).

In summary we advise you to review your Wills regularly to see if they could be affected by this proposal and please keep in mind that a proper Spanish Will should consider your National Law, Spanish Law and also European Laws and their possible future modifications. Please remember that in order to make sure that your national law will apply to your Will and succession, this must be expressly and correctly stated within your Will.

If you need our assistance in this regards please do not hesitate to contact us.

The information provided on this article is not intended to be legal advice, but merely conveys general information related to legal issues.

White & Baos
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