Although the UK opted out of Brussels IV, more ominously known as EU Regulation No 650/2012, it may well have implications for anyone who owns assets in an EU country which has opted in. Although the Regulation was passed in 2012 it only came into force on 17 August 2015.
The Regulation applies a single national law of succession to a person’s moveable and immoveable property upon death and applies to both testate and intestate succession. The applicable law is that of the country of the deceased’s habitual residence at the time of death, unless:
The deceased was manifestly more closely associated with another country; or
The deceased elected in their Will for their national law to apply, regardless of whether the state of their nationality is a Regulation country or not.
There is therefore an opportunity for people with property in a Regulation country to elect in their Wills that the law of their nationality should apply to the succession of their relevant EU property. This may avoid local forced heirship rules which would otherwise apply.
An election will only take effect if the person dies on or after 17 August 2015. It is also possible to make the election in a UK Will. There may, however, be other, more practical reasons to make an overseas Will and to include the election there and so both require careful consideration.
The Regulation does not apply to lifetime gifts and is predictably mostly silent on the subject of trusts. This may prove interesting where a person’s assets fall within a jurisdiction which does not fully recognise trusts and the devolution of assets under their terms, France being a case in point.
In some cases, where local laws of an EU country allow assets to pass in accordance with a deceased’s national law, the effect of the Regulation may be to impose local forced heirship rules that previously did not apply.
Given that the Brussels IV Regulation provides both opportunities and traps, those who could potentially be affected by it should take advice and revisit their Will.