Your inheritance!

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The European Union news agency ‘Eur-Active’ on March 1st. announced an important new item of legislation which might (or might not!) affect the hundreds of thousands of British citizens in Europe. It concerns inheritance. The item is produced verbatim below.


This piece of legislation brings into sharp focus why the British citizen needs some form of representation at Westminster!


Britain has opted out of this legislation.


Queries?? Has it thereby opted out every Briton in Europe? Or not?


Can a Briton in France in future choose which inheritance rule his inheritance will follow? French or British?


Can a Frenchman dying in Britain choose? Or must he follow British Law?


Is someone with dual nationality stuck with French law?


Can you choose that your property is inherited under the law of Britain?


But who speaks for us the British Expatriate in these matters? No one!



European Certificate of Succession inheritances


To view the original
http://www.euractiv.com/justice/meps-back-new-rules-ease-cross-border-inheritances-news-511230



EU citizens living in a different country than their own will be able to choose which legislation applies when their heirs settle legal inheritance matters, effectively preventing legal disputes between courts.


The legislation represents big progress for European citizens, said centre-right German MEP Kurt Lechner, in charge of the report, which was adopted unanimously by the European Parliament’s legal affairs committee.


”It’s a big step forward for the testator, who will be able to exercise his freedom to deal with his succession, and a huge simplification for the heirs,” said Lechner.
In a nutshell, citizens living in another EU member state will be able to state in a so-called European Certificate of Succession which national system they want their inheritance to go through in order to safeguard the rights of heirs, as well as other parties, such as creditors.


For example, an Italian woman married to a Briton and living in Belgium will have the option to choose whether her heirs inherit assets under Italian or Belgian law, avoiding jurisdictional legal disputes.


The use of the certificate is not mandatory. If the person who dies does not draw up a will or a certificate, his or her succession will be dealt with under the law of the member state where he/she had her residence.


The European certificate avoids conflicts that could otherwise come up if several courts in different member states declared themselves competent to handle the inheritance.
”The death of a family member is a sad and traumatic event, without additional legal headaches,” said EU Justice Commissioner Viviane Reding, the Commission’s vice president.

The new law on international successions affects millions of citizens. In 2010 more than 12 million people lived in an EU member state other than their own, an increase of 3 million compared to 2005.


The trend in cross-border ownership of assets is also growing massively. It is therefore likely that more assets may be inherited across borders than in the past and that this trend will continue in the future, with consequent tax problems. Potential cross-border inheritance cases range from 290,000 to 360,000 per year.
“I hope that Parliament and Council will be able to come to a final agreement soon. Notably, the European Certificate of Succession would substantially facilitate the legal formalities for successions in cross-border situations,” said Reding.

The regulation would not apply in UK and Ireland, as their respective governments decided to exercise their right to opt out.



EurActiv.com


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Thanks to Guillaume and Shirley for their additions. I will write to both privately. Reading my document, it would seem that it is worded more in the form of a 'will'. It was written ten years ago and of course costs have risen since then. They were written under a notaire who has 'passed on'. A second notaire has since read them and confirmed that they are OK. The wording is very simple - I had little command of French 10 years ago - Now it is relatively easy to understand. The base line remains - it is essential that everyone completes a will in French.

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Advice on inheritance is a complicated and therefore, naturally, a confusing matter.

It is always difficult to provide any answer without having a fair assessment of one’s situation and the rules that applies to him/her.

I have read your comment Brian and you may find that you entangled the concepts of handwritten French will and gift between spouses (donation entre époux). The cost of the first one is €10.70 (although a notaire will usually charge €30 to €40 but sometimes over €100!) and the cost of the second one is much higher and depends on many elements. As a matter of fact, a donation entre époux is usually not necessary and the same effects can be met with a French will or even by doing nothing! It is always useful to know first “what happens if I do nothing?” and compare any options to this basis.

It may be useful for you to revisit your notaire or seek advice with someone else to provide you with a detailed explanation of the document you signed and of the effects of a usufruit (which does not give the usufruit holder absolute powers on the property or a share of the property, and the heirs can interfere in certain cases). If the document is indeed a donation entre époux, the effects are determined within the deed and can differ from one person to the other depending on what they have decided.

But I suspect that in fact you have signed a handwritten will, which is not necessarily a bad thing at all (even if it is not always making a difference from a legal perspective, at least it allows to have clear and retrievable instructions to deal with the estate which can make you gain several months of lengthy procedure) but I am not entirely sure its effects have been correctly explained to you.

In any case, prior to going into solution mode, it is always prudent to check which law (e.g. French, English or other) applies. Then only can a set of options be determined. The notaire’s solutions are often overlooking this paramount first step as they always expect French law to apply (this is after all the way they are trained). Unfortunately, this is not always the case.

I am happy to discuss this further if you require further assistance.

I hope this helps.

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To Shirley,

I am not a notaire but here is my advice.

I am assuming that you and your husband are joint owners of your property.

Go to a notaire and get a French will made. The form is that of a 'don entre époux'

This needs be just one paragraph long and has to be written freehand in French. Such a short document written by both you and your husband separately will ensure that if one of you dies the survivor can enjoy the total benefits of all your property without interference from your sons. You will have total 'usufruit' or 'the rights to the fruits' of the property. I believe that on the death of one of you, the survivor would possess 50% of the property outright and the other 50% would be split between the survivor and your two sons. BUT your sons cannot enter onto the property nor interfere with the survivors enjoyment of the total property .

The cost of making a visit to a notoire to do this was for us some few years ago about 25 euros.

If you send me your email address I would be happy to send you a copy of my 'don entre époux' so that you can see how simple it is. Such an action is absolutely essential. ( my address -- lefourquet@gmail.com)

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You are absolutely right Brian. UK domicile of birth is somewhat a "sticky" status. This simply means that in case of contradiction between French and UK domestic law, one should revert to the bilateral treaty signed in that respect between the two countries.

Incidentally, apart from the implementation of a certificate of succession, most of the questions dealt with in the new European text were already addressed in the treaty so it is not surprising that the UK opted out.

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Thank you Guillaume for this information. It is obvious that one must apply oneself for some time to understand it.

What immediately is of interest is the law on domicility through birth in the UK. As the UK has opted out of this regulation then it might seem that an expatriate could well be subject to that law although otherwise he would come under (say) French law. As this regulation will be law in France then theoretically he could choose but as the UK has opted out we have a lovely legal tangle. It makes it dodgy what happens to property and assets kept in the UK???

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Well the European Parliament has officially adopted this text: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2012-0068+0+DOC+XML+V0//EN&language=EN

Confirmation that the UK has opted out of it.

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We are resident in France, and have been for 23 years. We have no property and hardly any pension rights in the UK. We have given each other the usufruit on our house here. Does anyone know where we can get good advice about inheriting from the UK? We have elderly parents in the UK and are not keen to pay inheritance tax twice, once in the UK and then again when we bring anything over here.....

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thanks guillaume, guess we shall stick with the swiss for prosperity

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Bonjour,

I have (quickly) read the proposal (this is still only a proposal so not enforceable as yet) of regulation which is very limited and overall falls short of the expectations raised by the Green Paper from which this piece of legislation stems.

In effect, the proposal is rife with restrictions to its application. This regulation:

- does not cover tax matters: the only question (partially) covered is therefore, “who receives the estate and in which proportion?” and not “who pays inheritance tax and in which proportion?”

- does not cover matrimonial property regimes (marriage settlements) so this would have to be dealt with first before applying the rules set out in the regulation (which is a bit pointless if the marriage settlement contradicts wishes conveyed by the Certificate mentioned in the proposal).

- does not cover questions relating to the creation, administration and dissolution of trusts so, like the marriage settlements, the consequences of a trust would have to be dealt with first which makes the use of a Certificate irrelevant or very limited at best.

- does not cover immovable property (i.e. houses and equivalent assets).

- does not cover gifts including lifetime gifts: this is a very sensitive area as many bilateral treaties do not cover this topic either, leaving the subject in legal and tax limbo.

Considering the above limitations (only the main ones have been mentioned but many others are included in the proposal) and since the UK and Ireland opted out, it is very difficult to see when this regulation would be efficiently applicable without incurring additional formalities and costs. The regulation mentions the determination of the applicable law is usually made according to the concept of habitual residence whereas the concept of domicile is retained from a UK perspective. The addition of a Certificate in the procedure when an individual is deemed UK domiciled will only increase the possibilities of dispute which is the opposite goal of the regulation.

I know the original intentions were honourable but I would be very surprised if (like many elements of European legislation on succession matters) this regulation will be in any way applicable in practice.

I hope this helps.

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I'm sure Guillaume will be able to offer some clarification here. However, under Irish law (and I imagine it is not too dissimilar to UK law), you have the right to leave both "personal" (i.e., money, shares, assets, etc.) and "real" estate (i.e., land, property, etc.) to whomsoever you wish. There is a tax issue for any beneficiaries who are not your children - the tax threshold is much lower.

My understanding of French inheritance laws is that regardless of whether you make a will, any "real" property is automatically bequeathed to your children - this can become an issue for couples who were married before and with children from the prior relationship.

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Steve, it sounds as though you have made a will, but was it made in England or France?

We have not altered our English will as it is very straightforward, it leaves everyting to our daughters and neither of us has been married before or have other children.

If you are concerned, why not have a french will made.

The only inheritance conditions which may affect us are proposed changes to the assurances vies.

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go with celeste all the way there. because I am a couple of decades older than my OH we have habitually made her own everything, nonetheless 'things' occasionally come to me which despite carefully explained phone conversations we are told I must deal with. my OH is swiss and children dual uk/swiss so all doubled up testaments, etc are fr and ch. the two countries are very different and actually ch from canton to canton that we have been unscrupulously thorough. however, we have avoided uk anything because of the good old phenomenon of all strands leading back to the inland revenue... if the uk is out of the european certificate then my sniffly little scots nose says stick with the french and one lot of tax. anyway, nice as it seems for those we leave behind, does it really matter once we have shaken off the mortal coil? as long as tax people can be deprived, fine by me.

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Will the French tax authorities really accept that I leave everything I have here to someone in the UK to whom I'm not married without trying to grab their share ??

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If the UK's decision to opt-out of the European Certificate of Succession Inheritances means that a British expat resident in France but still domiciled in Britain is not able to use this certificate to avoid UK inheritance tax, it makes a mockery of the government's claim that after 15 years away the expat has essentially severed all links with his/her country of birth and has thereby lost the right to vote in UK national elections.

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Good idea Brian. I have no idea who they are as I wasn't in Ireland for the last elections! Must look up on t'internet. We used to live in a 5-seater constituency, so will find who got elected by the least votes - in the vain hope he or she will be hoping to improve relations with the voters for next time, which of course could be sooner than we think!

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I have written to Mark Harper (my MP representative) asking him to get clarification from the Minister for Europe (David Lidington). You may desire to write to 'your' MP.

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I'd like to know more. If Britain and Ireland have opted out, can British and Irish citizens resident in France still use this legislation? It would be far easier for us to draft our wills, knowing they would be probated in Ireland and thus avoiding the ridiculous inheritance laws that exist in France!