Does your Will cover your wishes?

I don’t profess for one moment to fully understand the following except to believe that it is something we should all be aware of.  I would suggest as difficult as it may be to read you bear with it –  it does become a little clearer especially in the section that advises ‘What to do now’.

The European Council have been discussing improving the status quo and on the 4th July 2012 a new legislation was passed, colloquially known as the Brussels IV. The new European Union rules now known as EU 650/2012 regulations are applicable to successions to all member states (ECS state) as of August 17th 2015. The UK, Eire and Denmark have opted out suggesting incompatibility between the differing legal procedures.

The new regulation will be applicable to all assets in the EU. Mutual recognition of decisions relating to succession in the EU is ensured. Important to note that the regulation is binding and directly applicable in the Member States. This means that there is no need for legislation passed in a Member state. Spain for example will be subject to these EU regulations.

Regulation on jurisdiction, applicable law, recognition, enforcement of decisions to include enforcement of authentic instruments in matters of succession will include a creation of an ECS (European Certificate of Succession) ensuring that a given problem on succession will be treated under a single law and by one single authority.

Though not obligatory this can protect heirs in complex situations to avoid judicial and parallel conflicting decisions. This certificate enables a person to prove his rights as heir or his administrative powers as administrator of an estate or executer of a will with no further formalities.

Expats in Spain can and this has been the case to date (this is where one may wonder why it takes 84 articles to explain such a simple regulation) have the choice to apply either the law of nationality or the law of habitual residence to their succession. The habitual residency choice leaves many inconsistencies as to whether your habitual residence is in the country of residence or the country you were most associated with at time of death. In the latter case the law of succession of that country will govern the succession. Interesting to note that those of multiple nationalities will be able to choose the law of any of these nationalities.

Take note that the EU regulations will not interfere in the national rules on succession such as taxes etc. It is important to note that the default position is that the law of the state in which the deceased was “habitually resident” applies to succession to assets. The State of habitual residence need not be and ECS state but what is known as a third state such as to give an example, the US.

Selection of the law of nationality should be made expressly in a will or analogous document. This will ensure that the law of nationality will be applied to assets in the ECS.
Complexities which may occur in Spain or France which may not recognise trusts and the devolution of assets, and that the regulations does not apply to lifetime gifts. For those concerned about these matters, should seek the advice of a lawyer with expertise on EU successions.

What should I do now? Although the Regulation came into force in 2012, the provisions will not apply until 17th August 2015. That said, Wills can be prepared and executed now, but do take note that up to that date you will draft your will stating that you wish for the law of your birth country or nationality to govern your succession. Your present will remains valid if death occurs before midnight of the 16th of August of 2015. There is no guarantee that your wishes will be respected even if the clause is added.

Important note: if a partner shows signs of any illness such as Alzheimer’s or any other types of senility or dementia, a new will should be made immediately. Once diagnosed, they are not able to make a will and testament. Not saying some have not as the notary may not be aware of any of the signs. There would be concerns in these cases if the will was ever contested and medical records were available showing the commencement of the affliction.

The law does go on to say that ‘A disposition of property upon death made prior to 17 August 2015 shall be admissible and valid in substantive terms and as regards form if it meets the conditions laid down in Chapter III or if it is admissible and valid in substantive terms and as regards form in application of the rules of private international law which were in force, at the time the disposition was made, in the State in which the deceased had his habitual residence or in any of the States whose nationality he possessed or in the Member State of the authority dealing with the succession.’ (As stated in the paragraph above, there is still open debate as a notary or registrar may opt to use the Spanish civil code.

For those who die intestate in Spain wills will be executed under Spanish law.

UPDATE 18/05/2015. THE ARTICLES TO NOTE:

There has been much confusion relating to the new EU regulations on succession applicable from midnight on the 16th of August 2015. Hoping to simplify this, published below are the two main articles to be aware of. For those who find legalise complicated, please just note down the main parts of articles 21 and 22 posted in bold below.

Please focus mainly on; ARTICLE 22. Nº 1 AND 2. CHOICE OF LAW.

Article 21 General rule

  1. Unless otherwise provided for in this Regulation, 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.
  2. Where, by way of exception, it is clear from all the circumstances of the case that, at the time of death, the deceased was manifestly more closely connected with a State other than the State whose law would be applicable under paragraph 1, the law applicable to the succession shall be the law of that other State.

Article 22  Choice of law

  1. A person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death.
    A person possessing multiple nationalities may choose the law of any of the States whose nationality he possesses at the time of making the choice or at the time of death.
  1. The choice shall be made expressly in a declaration in the form of a disposition of property upon death or shall be demonstrated by the terms of such a disposition.
  2. The substantive validity of the act whereby the choice of law was made shall be governed by the chosen law.
  3. Any modification or revocation of the choice of law shall meet the requirements as to form for the modification or revocation of a disposition of property upon death.

Article 23 The scope of the applicable law
1. The law determined pursuant to Article 21 or Article 22 shall govern the succession as a whole.
2. That law shall govern in particular:
(a) the causes, time and place of the opening of the succession;
(b) the determination of the beneficiaries, of their respective shares and of the obligations which may be imposed on them by the deceased, and the determination of other succession rights, including the succession rights of the surviving spouse or partner;
(c) the capacity to inherit;
(d) disinheritance and disqualification by conduct;
(e) the transfer to the heirs and, as the case may be, to the legatees of the assets, rights and obligations forming part of the estate, including the conditions and effects of the acceptance or waiver of the succession or of a legacy;
(f) the powers of the heirs, the executors of the wills and other administrators of the estate, in particular as regards the sale of property and the payment of creditors, without prejudice to the powers referred to in Article 29(2) and (3);
(g) liability for the debts under the succession;
(h) the disposable part of the estate, the reserved shares and other restrictions on the disposal of property upon death as well as claims which persons close to the deceased may have against the estate or the heirs;
(i) any obligation to restore or account for gifts, advancements or legacies when determining the shares of the different beneficiaries; and
(j) the sharing-out of the estate.

For further information about drafting your will there is information HERE

Souce: Citizens Advice Spain

Step Through the Looking Glass and read the  Red Queen Musings

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