STEP Welcomes European Proposals To Clarify Succession Rules

by Ulrika Lomas, for LawAndTax-News.com, Brussels

16 October 2009

The Society of Trust and Estate Practitioners (STEP) has welcomed the publication of European Commission proposals to harmonize European law on succession and wills.

The aim of the proposed regulation is to make life easier for citizens by laying down common rules enabling the competent authority and law applicable to the body of assets making up a succession, wherever they may be, to be easily identified. In addition to providing more effective guarantees for the rights of heirs, legatees and other interested parties, the proposed regulation will enable people to choose the law that will govern the transmission of all their assets. The Commission is also proposing the creation of a European Certificate of Succession enabling an heir or the administrator of a succession to prove their capacity easily throughout the EU.

"Many European families and their assets are now spread across several member states, and national rules governing succession and wills do not fit together well," states STEP in response to the publication of the proposed changes. "The new regulation seeks to solve this, not by imposing a single succession regime, but rather by supplying an agreed mechanism for determining which state's succession law will apply in each case."

Richard Frimston, Chair of STEP's Cross-border Estates Group, adds: "As international mobility increases, it is increasingly common for family members to live in a range of European countries. This can cause real problems when, for example, someone wants to leave their French retirement home to their children who still live in England because the applicable laws in the two countries are not consistent. We believe that some areas of the Commission's proposals need further discussion, but we welcome the fact that these proposals for harmonization have now been brought forward and look forward to working closely with the Commission and EU member states over the coming months as the Commission's recommendations are refined."

The 450,000 international successions opened in the EU every year represent a considerable legacy, estimated by some to be worth more than EUR120bn. The rules applicable to these successions are, however, highly complex and difficult to predict.

The proposal provides for the application of a single criterion for determining both the jurisdiction of the authorities and the law applicable to a cross-border succession: the deceased's habitual place of residence. People living abroad will, however, be able to opt to have the law of their country of nationality apply to the entirety of their succession. All assets making up a succession will thus be governed by one and the same law, thereby reducing the risk that different member states will issue contradictory decisions. Likewise, a single authority – that of the country of habitual residence – will be competent for settling the succession. It will, however, be able to refer the matter to the competent authority of the country of nationality where the latter is better placed to hear the case. Lastly, there will be full mutual recognition of decisions and authentic acts in succession matters.

A European Certificate of Succession will also be created to enable a person to prove their capacity as heir or their powers as administrator or executor of a succession without further formalities.

Welcoming the proposal's adoption, European Commission Vice-President Jacques Barrot, the Member of the Commission for Justice, Liberty and Security, said: "It is imperative that citizens and legal practitioners be able to understand and, to a certain extent, choose the rules applicable to the assets making up a succession, wherever they may be located. By proposing that the place of habitual residence determine the competent authority and the law applicable by default while allowing a person to opt to have their succession governed by the law of their country of nationality, we are offering greater legal certainty and greater flexibility, enabling people to contemplate the future more serenely. As for the European Certificate of Succession, it will enable people to prove that they are heirs or administrators of a succession without further formalities throughout the EU. It brings us one step closer to a genuine European Civil Judicial Area."

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