Seems so but as always the devils in the detail.
It seems rhat French notaires are generally taking that approach but that doesn’t close the door to a disgruntled offspring that a parent might have excluded from the french part of their inheritance.
Sorry Jane, I think this subject will be relevant to many on SF and I will not be the first to share an article from behind a pay wall so for those who have an interest here you are, make your own mind up.
Pay wall prison he I come!
The European Court of Justice has made a ruling on the right of third country nationals to choose the law that applies to their succession.
Since 2015, under European Union law (Regulation No 650/2012), any person residing in a Member State has the right to elect for the law (but not taxes) of their nationality to apply to their estate. The law is known as ‘Brussels IV’.
The aim of the law is to reduce conflict and introduce greater certainty to the administration of an estate by the harmonisation of the different laws that applied across Europe.
Henceforth, the applicable law would be the country where the person was habitually resident at the time of death, except where they had elected by a will to adopt the law of their nationality. In either case, the succession would be dealt with by the jurisdiction of one country.
The option to do so is particularly important for many international property owners in France who could then use the law to get around French forced heirship laws, which grant children an automatic right to at least part of the estate (réserve héréditaire).
However, in 2019 the French government passed a law providing that where a foreign law was applied to the succession and made no proper provision for children, any of the deceased’s children or heirs or beneficiaries are entitled to claim compensation (prélèvement compensatoire) on assets located in France on the day of the death.
So, for example, when a succession is governed by a law in the USA and the deceased made a will for their estate to pass entirely to their surviving spouse, their child who has their habitual residence in an EU Member State would be entitled to claim a compensation on assets located in France.
Conversely, if the deceased and their entire family are English nationals and reside in England, no child will be able to invoke the right of exclusion, even though property is located in France. On the other hand, if one of the children resided in Germany at the time of the death, the right to compensation operates.
As a result of the French law, many complaints were made to the European Commission, who are investigating the matter.
In the meantime, the European Court of Justice (CJEU) has recently heard a case, involving the countries of Poland and Ukraine, where a Ukrainian national residing in Poland, with real estate in the country, sought by a will to apply Ukrainian law to the to the disposal of real estate located in Poland.
However, the notary refused to process her wishes as they considered it conflicted with a bilateral agreement between Poland and Ukraine which specified that the law that was to apply for real estate was the country in which it was located.
As a result the case ended up in the CJEU who recently gave their ruling on the matter.
The conclusion reached was to draw on Article 75 of Regulation 650/2012, which grants an exemption from the regulation where a Member State was already party to a bilateral agreement with a third-party country prior to the introduction of the law. This regulation states:
‘This Regulation shall not affect the application of international conventions to which one or more Member States are party at the time of adoption of this Regulation and which concern matters covered by this Regulation.’
On those grounds, the CJEU ruled that:
‘Article 75 of Regulation No 650/2012, read in conjunction with Article 22 of that regulation, must be interpreted as not precluding – where a Member State of the European Union has concluded, before the adoption of that regulation, a bilateral agreement with a third State which designates the law applicable to succession and does not expressly provide for the possibility of choosing another law – a national of that third State, residing in the Member State in question, cannot choose the law of that third State to govern his or her succession as a whole.’
We have spoken to several international solicitors about this decision, all of whom to one degree or another expressed bewilderment about it. Indeed, the French and English language versions of the ruling appear to come to different conclusions. The above is taken from the French version.
Although the decision will obviously be a setback for international property owners in France, the ruling cannot be considered the end of the matter, as the CJEU has yet to consider a case being brought under French law.
International lawyers also advise us that, in practice, notaires in France are granting the choice of nationality to those who wish it, albeit that does not resolve potential legal battles about such wills.
In addition, insofar as UK nationals are concerned, there is no bilateral agreement concerning inheritance, other than taxation, which is not relevant for the purposes of the EU regulation.
In the same case the court also considered the question of whether Regulation 650/2012 applied to nationals of a third country who lived in France, granting them the right to choose the country for their succession, in the same manner as nationals of Europe. The court ruled in the affirmative, stating:
‘Article 22 of Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession`must be interpreted as meaning that a third-country national residing in a Member State of the European Union may choose the law of that third State as the law governing his or her succession as a whole.’
Nevertheless, this interpretation may well only apply where under any bilateral agreement between the country of their nationality and the Member State where they reside, they have the choice of which law to adopt. Until there is further clarification it may well depend on the circumstances of each case.
1 Like