How is Brussels IV likely to apply in practice?
The practical implications can be summarised as follows.
UK habitual residents with property in other EU states
For individuals habitually resident in the UK but with property in another EU state the relevant law of succession will be of their habitual residence i.e. English, Scottish etc. However, if an Englishman dies with property in France, but with the rest of his estate in England, the French property will pass in accordance with English law.
However, under English law, the French property in accordance with the doctorine known as renvoi, will, at present, pass in accordance with French succession rules. Therefore forced heirship rules have not been avoided as one may have expected. The only way to ensure that these forced heirship rules are avoided, is to opt for, via his or her Will, English law to apply to his worldwide estate.
There are, of course, many more regulations that will apply in different EU states and individuals with assets in more than one country will always need to obtain advice. Furthermore, there are also a number of exceptions that will apply. One such principle is that of ‘public policy’ in accordance with which it is always possible to set aside a provision of a separate applicable law, if it is incompatible with a public policy of a relevant state.
UK expatriates resident in other EU states
For UK expatriates habitually resident in other EU states, in absence of any election, the local laws will apply to the succession of their estate in the event of their death. This is, of course, very significant given that these countries impose local forced heirship rules.
English nationals, who would prefer English laws to apply to succession on their death, should elect in their Will for English law to apply. It should be noted that while this is the theory it does assume that local notaries will be aware of the new rules, which sadly will not always be the c ase.
What action should I take?
In practice where you have any clients who either live in, own property in, or are moving to or from a Brussels IV state they should consider the following:
– Obtain advice on how Brussels IV and the laws of the relevant states may impact upon their succession planning. In general terms, we would recommend that UK nationals make elections in their Will that their assets located in Brussels IV states pass according to English law.
– Consider electing that English law should govern succession to assets located in Brussel IV states, where an individual is a resident of a Brussels IV state but is also a British national. This would then provide freedom for individuals to decide how assets should pass.
Ultimately, the unknown factor at present is the attitude of continental Europe to these new rules. Brussels IV is undoubtedly good news for UK nationals living in or owning assets in the Brussels IV states, however this is a complex piece of international law, and its implementation is unlikely to be smooth, certainly in the short term.
