However, persons who are considering planning their succession now should be fully reckoned with its contents.
1. SCOPE OF THE REGULATION
According to recital 7: “The proper functioning of the internal market should be facilitated by removing the obstacles to the free movement of persons who currently face difficulties in asserting their rights in the context of a succession having cross-border implications. In the European area of justice, citizens must be able to organise their succession in advance. The rights of heirs and legatees, of other persons close to the deceased and of creditors of the succession must be effectively guaranteed.”
Therefore, the purpose of the Regulation is to preserve and protect a person’s right to decide on the destiny of his assets upon his death in accordance with the law that he elects (that of his habitual residence or that of his nationality) and to ensure the execution of his will in accordance with the same law, irrespective of where he dies, where his estate is situated or where beneficiaries reside.
Therefore the Regulation is aimed at reinforcing trust and certainty in the execution of EU citizens’ last wills, when not all the elements of their succession are situated within the same country, in accordance with the principles of “unity and universality” of the succession. To ensure that a given succession is treated coherently, under a single law and by one single authority, avoiding parallel proceedings and conflicting judicial decisions.
(b) Relationship with other international private law rules on the matter
According to article 75.2 of the Regulation, between Member States this Regulation shall take precedence over conventions “concluded exclusively between two or more of them” (i.e. those conventions of a EU-scale, to which only Member States are party) insofar as such conventions concern matters governed by this Regulation.
However, under article 75.1, any such international conventions to which one or more Member States (and other third-States) are party at the time of adoption of the Regulation which concern matters covered by this Regulation (for instance the Hague Convention of 4 October 1961 on the Conflicts of Laws Relating to the Form of Testamentary Dispositions) will continue to be applied by Member States and will not be affected by this Regulation.
This is the case particularly as regards the question of formal validity of wills and joint wills, where that Convention will apply with preference over article 27 of the Regulation by those Member States which are party to it.
Also, article 75.3 provides that the Convention of 19 November 1934 between Denmark, Finland, Iceland, Norway and Sweden (comprising private international law provisions on succession and wills) will still apply with preference in certain aspects.
(c) Countries having “opted out”: UK, Ireland and Denmark
Finally, under Protocol no. 21 on the position of the UK and Ireland and under Protocol 22 on the position of Denmark in respect of the area of freedom, security and justice (annexed to the Treaty on European Union) those three Member States (UK, Ireland and Denmark) are not bound by this Regulation, but they have the possibility of notifying their intention of accepting this Regulation after its adoption.
(d) Matters not affected by the Regulation
As regards the matters which are not affected by the Regulation, article 1 excludes from the scope of the Regulation revenue, customs or other administrative matters (or of a public-law nature) related to succession, including taxation matters, which will continue to be regulated by national laws and/or other treaties or conventions entered into by Member States on the matter.
Also excluded are (inter-alia): status of natural persons, family relationships, legal capacity of natural persons, disappearance, absence presumed death, matrimonial property regimes, property (and other) rights on movable or immovable property, maintenance obligations (other than those arising by reason of death), formal (as opposed to substantive) validity of oral (as opposed to written) “dispositions of property upon death”, questions governed by the law of companies (e.g. provisions in the articles of association regarding “mortis causa” transfer of shares), the requirements for recording in a register any rights in immovable or movable property and the effects of recording those rights.
According to recital 13, questions relating to the creation, administration and dissolution of trusts are also excluded from the scope of this Regulation. However, when a trust is created, devolution of the assets and determination of beneficiaries will be treated in accordance with the law applicable to the succession under the Regulation.
In general the recitals of the Regulation are very helpful in understanding and interpreting the full scope of the Regulation and in applying many articles thereof. In case of doubt, guidance should be sought in those recitals.
2. LAW APPLICABLE TO A SUCCESSION
As regards the determination of applicable law, the Regulation has “universal application”, which means that the law designated by the Regulation will be applied, even if it happens to be the Law of a third (non-member) State (article 20).
(a) General rule (closest connection, irrespective of nationality)
The general rule will be that “the law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death” (article 21.1). Recitals 24, 24 and 25 provide insight into what must be understood as “habitual residence”.
This rule applies except where “it is clear that at the time of death the deceased was manifestly more closely connected with another State”, in which case the latter will apply (article 21.2).
This means that the deceased’s country of habitual residence is presumed by the Regulation to be the one with which he had his closest connection, except where there is proof to the contrary.
(b) Chosen law (option for the law of the country of nationality)
On the other hand, a person can choose as the law that regulates his succession (in the form of a “disposition of property upon death”) “the law of the State whose nationality he possesses at the time of making the choice or at the time of his death” (article 22.1).
The substantive validity of the act whereby the choice was made will be ascertained according to the chosen law (article 22.3).
If the deceased had several nationalities at either time (where double nationality is possible at all), then he can choose the law of either of those countries of nationality.
Under article 83.2, any choice of law expressively made prior to August 17th 2015 will have validity if it meets the conditions for validity under the Regulations (articles 20-38) or if it is valid under the rules of private international law that were in force at the time where the choice was made.
Choice of law
This provision aims to preserve the validity of any explicit choices of law made prior to August 17th 2015, and therefore that choice of law can be made in accordance with the Regulations or in accordance with international private law in force now.
The conclusion of the foregoing is that a French citizen having retired to Spain, but whose children are still living in France where most of his estate is situated, may, by granting a will before he dies, elect his succession to be subject to French law (nationality) instead of Spanish law (habitual residence).
If he makes no such choice of law before he dies, and he dies after August 17th 2015, then Spanish law (“habitual residence”) will apply even to assets that he has in France and even with regard to those of his successors still living in France. That choice of law can be made now according to the Regulation.
(c) Implicit choice of law made prior to August 17th 2015
Under article 83.4, if a “disposition of property upon death” is made prior to August 17th 2015 in accordance with the law of a State that the deceased could have chosen to apply to his succession in accordance with the Regulation, that law shall be deemed to have been chosen as the law applicable to the substantive aspects of that succession.
(d) Aspects of succession regulated by the applicable law
The Regulation enshrines the principles of unity and universality of succession, trying to avoid (with some exceptions) that the succession of the same person can be subject to several different legislations. However the Regulation differentiates between the law that applies, on the one hand, to the succession “as a whole” and the law that, on the other hand, applies to “dispositions of property upon death” or “declarations of acceptance or waiver”.
The applicable law designated by this Regulation will regulate all the most relevant aspects of the succession (article 23), including beneficiaries, their shares, succession rights of spouse or partner, capacity to inherit, disinheritance and disqualification by conduct, the transfer of the rights, conditions and effects of acceptance or waiver, powers of executors and administrators, liability for debts, disposable part of the estate, reserve shares and restrictions on disposal of property, restoration or account for gifts, advancements or legacies, sharing-out of the state, etc.
Specific aspects of the succession
However, there are particular rules on specific aspects of the succession:
- If the estate contains immovable property, enterprises or other special properties, then the provisions of the State in which they are situated that contain restrictions for their succession (for economic, social or family considerations) will have to be respected (article 30).
- If the testator attributes to the inheritor a certain “in rem” right that does exist in the State that governs the succession but doesn’t exist in the State where the right is invoked, then that right will have to be adapted to the closest equivalent right existing, in terms of aims and interests pursued (article 31).
Under article 34, if the Regulation designates the law of a third State (not a Member State) all the laws of that State will apply (including substantive and private international law ones), and any “renvois” made by its private international laws will be respected if they make a “renvoi” to the law of a Member State or to the law of another third State which would apply its own law (not making a second “renvoi”). However, in a few cases “renvois” are not permitted at all.
Under article 35 the application of a provision of the law of any State designated by the Regulation may be refused only if such application is “manifestly incompatible” with the public policy (“ordre public”) of the forum.
(e) The law that applies to “admissibility and substantive validity” of “dispositions of property upon death”
The “admissibility and substantive validity” (including capacity, admissibility, prohibitions, interpretation, vices of consent, etc.) of a “disposition of property upon death” (excluding “agreements as to succession”) as well as the modification and revocation thereof, shall be governed by either of (article 24):
- (i) the law that would have applied to the succession as a whole if the person(s) had died on the day that he made that disposition;
- (ii) the law chosen by the person to apply to that aspect of the disposition, in the same way as he can choose the law applicable to his succession as a whole in accordance with article 22.
Article 25 contains similar rules as regards “agreements as to succession”, distinguishing between those which regard the succession of one person and those that regard the succession of several persons.
(f) The law that applies to the “formal validity” of written “dispositions of property upon death“
Let us remind that under article 1 the formal validity of oral “dispositions of property upon death” will not be affected by the Regulation.
In respect of the form of written “dispositions of property upon death” (as well as their modification or revocation) the Regulation is very permissive and favorable to their formal validity, to the extent that it recognizes the validity of those that comply with the law of either one of several countries (article 27): (i) the country of formalization, (ii) of nationality of testator(s) or person(s) concerned by the agreement, (iii) of domicile of testator(s) or person(s) concerned by the agreement, (iv) of habitual residence of testator(s) or person(s) concerned by the agreement; or (v) of the country where immovable property is located.
For these purposes, will be considered to pertain to matters of form those provisions of law which limit the permitted forms of dispositions of property by reference to the age, nationality or other personal conditions of the testator or the person whose succession is concerned by an “agreement as to succession” or the qualifications to be possessed by witnesses of “dispositions of property upon death”.
However, let us remind that under article 75.1 as regards formal validity of wills and joint wills, those Member States which are Contracting Parties to the Hague Convention of 4 October 1961 on the Conflicts of Laws Relating to the Form of Testamentary Dispositions shall continue to apply that convention rather than the quoted article 27.
(g) Protection of formal and substantive validity of “dispositions of property upon death” made prior to August 17th 2015
In addition, according to article 83.3, any “disposition of property upon death” made before August 17th 2015 will be valid in form and substance if it meets the conditions of the Regulation (arts. 20-38) or if it was valid in form and substance under the rules of private international law in force at the time that the disposition was made (in the State where he had “habitual residence”, the State(s) whose nationality he possessed or Member State of authority dealing with the succession).
All these provisions pretend to protect the formal and substantive validity of “dispositions of property upon death” made before August 17th 2015, and they permit that testators make now their wills and elect the applicable law in accordance with the Regulation.
(h) The law that applies to the “formal validity” of declarations of acceptance or waiver
Such declarations of acceptance or waiver of successions, legacies or reserved shares, or intended to limit the liability of the person making the declaration shall be formally valid (article 28) if they conform to: (i) the law that regulates the succession as a whole under articles 21 and 22 or (ii) the law of the country of habitual residence of the person making the declaration.
2. JURISDICTION TO RULE ON THE SUCCESSION
As regards jurisdiction, the Regulation only distributes competence between courts inside of Member States, not beyond. Hence its reference to “Member States” not just to “States” as it does in connection with applicable law, where the designated law can be that of a third-State.
According to recitals 20-22 the definition of “court” also encompasses notaries or registry offices which in some Member States exercise judicial functions like courts or do so by delegation of power from courts.
(a) General rule: to make it coincident with the law that governs succession (residence at the time of decease)
As regards the jurisdiction for ruling on the succession “as a whole”, it will be the courts of the Member State of “habitual residence of the deceased at the time of death” (article 4).
The term “habitual residence” is again explained at length in recitals 24, 24 and 25 (also applicable for the purpose of designating applicable law).
This rule is intended to designate the courts of the Member State whose law is most likely to regulate the succession under article 21.
(b) Jurisdiction if the deceased chose the law of another Member State to apply to his succession
However, if (under article 22) the deceased chose the law of a Member State (not a third-State) to regulate his succession, the Regulation admits the jurisdiction of the courts of the Member State whose law was chosen under certain circumstances.
Those circumstances are the following:
- (i) where the “parties concerned by the succession” agree in writing to it (by means of a signed and dated document), in which case the court initially seised (in the Member State of habitual residence) shall decline jurisdiction (article 5); or
- (ii) where the court initially seised (in the Member State of habitual residence) declines jurisdiction (upon request of one of the parties) because it considers that the courts of the Member State of the chosen law are “better placed to rule on the succession” (e.g. taking account of the habitual residence of the parties or location of assets) (article 6).
(c) Subsidiary jurisdiction
However, it is possible that when he dies, the deceased was not a “habitual resident” of any Member State. In that case, the Regulation still favors the jurisdiction of the courts of a Member State.
Thus, under article 10 (“subsidiary jurisdiction”), “where the habitual residence of the deceased at the time of death is not located in a Member State, the courts of a Member State in which assets of the estate are located shall nevertheless have jurisdiction to rule on the succession as a whole” provided that the deceased also had a close personal connection with that Member State.
That close connection will consist of either of these two circumstances (by order of preference): (i) the deceased had nationality of that Member State at the moment of death; or (failing that) (ii) he has had in the past “habitual residence” in that Member State and at the time that the court is seised not more than 5 years have elapsed since he moved his “habitual residence” from that Member State.
If no such close personal connection of the deceased exists with any particular Member State (article 10.2), then the courts of the Member State “in which assets of the estate are located” will have jurisdiction to rule “on those assets” (not on the succession as a whole).
To the extent that this may entail the simultaneous jurisdiction of the courts of several Member States, this may signify a break-up of the unity and universality of succession in this particular case.
(d) “Forum necessitatis”
If no court in a Member State has jurisdiction under these Regulations, then the courts of a Member State with which the case has “sufficient connection” will have jurisdiction if proceedings “cannot reasonably be brought or conducted or would be impossible in a third State with which the case is closely connected” (“forum necessitatis”, contemplated in article 11).
(e) Limitation of proceedings
Even if in general the jurisdiction of a court designated by the Regulation will have jurisdiction to rule on the succession as a whole, there are exceptions.
Thus, if a court of a Member State is seised and there are assets located in a third (non Member) State, the court may (upon request of one of the parties) decide not to rule on those assets if it may be expected that its decision in respect thereof will not be recognized and declared enforceable in that third State (article 12, “limitation of proceedings”).
(f) Other courts with jurisdiction to receive declarations
As regards acceptance or waivers of succession, of legacies or of reserved shares (it they are possible under the law applicable to the succession) or a declaration designed to limit the liability of the person concerned in respect of the liabilities under the succession (article 13), the court with jurisdiction to receive the relevant declarations will be that of the Member State of habitual residence of the person making that declaration (in addition to the court having jurisdiction to rule on the succession as a whole in accordance with the Regulation, where such declarations can also be made).
3. “DECLARATION OF ENFORCEMENT” OF DECISIONS GIVEN BY THE COURTS OF MEMBER STATES
Under article 39, the principle is that any decision on the succession given in a Member State by a court with jurisdiction to rule in accordance with this Regulation, shall be automatically recognized in the other Member States without any special procedure being required.
However, when a decision given in a Member State (and enforceable in that State) has to be enforced in another Member State (article 43) or is raised as the “principal issue” in a dispute in another Member State (article 39.2), then a “declaration of enforceability” procedure (described in articles 45 et seq.) will have to be followed beforehand in the Member State of enforcement or where the dispute occurs.
The “declaration of enforceability” procedure shall be governed by the law of the Member State of enforcement (article 46) and the application shall be submitted with the court or authority designated for those purposes by each Member State to the EU Commission (article 45).
That “declaration of enforceability” shall be issued immediately after filing of the documents required (article 48), without any review (at that initial stage) as regards the presence of the exceptions mentioned in the following paragraphs.
Exceptions to enforceability
There is indeed a number of exceptions to enforceability (set out in article 40), but those exceptions shall only apply if the original favorable “declaration of enforceability” decision is appealed against (article 52).
Such exceptions to recognition include the following (article 40):
- (a) conflict with public policy (“ordre public”) in the Member State where recognition is sought;
- (b) in some circumstances where the defendant was not given the opportunity to challenge the decision;
- (c) where the decision is incompatible with another decision given between the same parties in the Member State where recognition is sought; or
- (d) where the decision is irreconcilable with another earlier decision given in another Member State or third State between the same parties and in the same cause of action, if that earlier decision fulfills the conditions necessary for recognition in the Member State where recognition is sought.
However, under no circumstances may a decision given in a Member State be reviewed as to its substance (article 41).
4. MUTUAL RECOGNITION OF AUTHENTIC DOCUMENTS AND COURT SETTLEMENTS
First of all, according to article 74 no legalization or other similar formality shall be required in respect of documents issued in a Member State for use in another Member State “in the context” of this Regulation.
This should be interpreted to refer not only to decisions or rulings on the succession but to documents to be used in connection therewith, such as wills, certificates of death, etc.
(a) Evidentiary effects
Under article 59 an “authentic instrument”3 established in a Member State shall have the same evidentiary effects (or the most comparable effects) in another Member State as it has in the Member State of origin, provided that this is not manifestly contrary to “public policy” (“ordre public”) in the Member State of recognition.
For that purpose, following an advisory procedure mentioned in article 81(2), a description of evidentiary effects can be obtained (under article 59.1) from the authority having issued the authentic instrument, so that such effects can be proved in another Member State for recognition.
According to articles 60 and 61, a declaration of enforceability of “authentic instruments” or court settlements that are enforceable in the Member State of origin can be sought in another Member State following the same procedure for the enforcement of decisions (“declaration of enforcement”) described in the previous section 3 (articles 45 to 58).
5. EUROPEAN CERTIFICATE OF SUCCESSION
This is perhaps one of the most important new elements introduced by the Regulation. In accordance with recital 69, use of the European Certificate of Succession will not be mandatory and persons should be free to use other instruments available under this Regulation, such as decisions, authentic instruments and court settlements.
However no authority or person presented with a Certificate issued in another Member State shall be entitled to request that such an alternative document be presented to them instead of the Certificate.
Under the principle of “subsidiarity”, a European Certificate of Succession shall not replace internal documents currently used for similar purposes in Member States (for instance, in Spain this will not replace the “declaration of inheritors”), but, once issued for use in another Member State, the Certificate of Succession will produce the same effects in the Member States where it was issued (article 62.3).
(a) Purpose served by a Certificate of Succession
The European Certificate of Succession is a document (whose use is not mandatory) issued for use in another Member State by the heirs and legatees with direct rights and by executors of wills or administrators of estates who need to invoke or prove their status or exercise their rights in another Member State (their shares in the estate, the attribution of specific assets, their powers or authority as executors or administrators, etc.) (article 63).
A Certificate of Succession will have the (mainly evidentiary and legitimatory) effects listed in article 69, and more precisely:
- (i) will have direct effect in all Member States without having to follow a recognition procedure in each one of them;
- (ii) will be presumed to accurately demonstrate the elements which have been established under the law applicable to the succession or under any other law applicable to specific elements thereof (e.g. the person mentioned in the certificate as being heir, legatee, executor or administrator of the estate, or having authority to perform certain transactions shall be presumed to have that status or hold those powers),
- (iii) any person who makes payments or passes on property to a person mentioned in the Certificate as being authorized to accept/receive any such property or payments, shall be considered to have dealt with a person authorized to receive them, unless he knows that the contents of the Certificate are not accurate or is unaware of such inaccuracy due to gross negligence; and
- (iv) it will constitute a valid document for the recording of succession property in the relevant register of a Member State (without prejudice to the fact that “in rem” rights and legal requirements for recording property and legal effects thereof will continue to be regulated by local laws).
(b) Issuing authority
The Certificate shall be issued by the Member State whose courts have jurisdiction under this Regulation (by a court or an authority designated by that Member State’s internal law to deal with the succession) (article 64).
According to recital 68, the authority which issues the Certificate should have regard to the formalities required for the registration of immovable property in the Member State in which the register is kept. For that purpose, this Regulation provides for an exchange of information of such formalities between the Member States.
(c) Procedure for obtaining a Certificate
The issue of a Certificate will require an application with the contents in article 65, including (among others) the elements on which the applicant founds his claimed rights to succession property as beneficiary and/or his right to execute the will or administer the estate, and all other relevant information and evidentiary documents which the applicant can provide for the purposes of the Certificate.
The issuing authority will then (article 66) of its own motion carry out additional enquiries for verification of the elements to be certified from third parties, from the applicant himself (including declarations on oath), inform other beneficiaries about the application (so that they can eventually invoke their rights) and request the collaboration of competent authority in other Member States to provide information held in land registers, civil status registers, etc…
Once that the elements to be certified have been established under the law applicable to the succession (and/or to specific elements) the Certificate shall be issued in a standard format and beneficiaries shall be informed of the issue (article 67).
The issuing authority will not issue a Certificate (i) if the elements to be certified are being challenged or (ii) it is not in conformity with a previous decision covering the same elements.
(d) Contents of a Certificate
Regarding the contents of the Certificate (article 68), among other details it may include (in accordance with the law applicable to the succession and the disposition of property upon death) the share for each heir, list of rights and assets allocated to a given heir or legatee, restrictions to their rights, powers of the executor of the will or administrator of the estate, etc.
(e) Validity of a Certificate
These Certificates will have a validity of 6 months (which validity can be extended, under article 70), and the Regulation contemplates a procedure to rectify, modify or withdraw the Certificate (article 71).
The contents of a Certificate (or subsequent rectifications, modifications or withdrawals thereof) can be challenged by any person entitled to apply for one before a judicial authority in the Member State of issuance in accordance with the law of that State (article 72). The validity of the Certificate can be suspended if it is challenged or is in the process of being rectified, modified or withdrawn.
If you need more information on this matter, please contact:
Juan Escudero Herreros, View Profile
Tel.: +34 91 745 40 10
Fax.: +34 91 411 70 00