Currently, in the European Union, one in ten estates is said to be “international”. In an area where people are increasingly mobile and where trade and investment no longer know borders, the trend is on the rise and is not about to decrease!
But what in an international succession?
In order to speak of an international succession, an estate only needs to contain one foreign element. The laws of the country concerned may then come into play when an estate is divided among the heirs. By foreign element (also called foreignness), we mean movable or immovable property, financial investments placed in another country, or the fact that the heir resides in a country of which he is not a native
Which law applies in case of international succession?
Since August 17, 2015, the EU Regulation n°650/2012 on international successions applies in France. It’s applicable throughout the European Union, except in Ireland and Denmark.
This regulation specifies that the law of the deceased’s country of residence determines his or her succession. Note that the term “residence” should not be misunderstood: it refers to the place where the deceased lived and not to his or her declared tax domicile. Thus, the assets will be divided among the heirs according to the law of the country concerned. For example, a Spanish resident who leaves property in France and Belgium will see the Spanish law define the division of his estate.
Attention, we are talking about the distribution of the assets and the management of the estate, not about the duties to be paid to the Treasury in order to enjoy the estate.
Can one avoid this regime?
Yes, if you are a multinational, you can choose to be subject to a law other than that of your country of residence. Thus, a European citizen has the possibility to write in his will that he places his succession under the law of his country of nationality. This European regulation has the force of law throughout the world, so that a French citizen living in Canada, for example, can opt for French law regarding his or her succession.
Does all this seem like a lot to ask? If you would like to take advantage of these specific arrangements, contact an expert from Virginie Laidet’s office now.
Unique tool: European Certificate of Succession
In order to allow heirs to enjoy their rights to an international succession, but also to legatees to organize it properly, the Member States of the European Union have introduced a single document: the European Certificate of Succession. This document harmonizes and simplifies the settlement of international successions within the EU.
Issued by the notary upon submission of all the required documents, the certificate of inheritance allows an executor, a legatee or the heir of an international succession opened since August 15, 2015 to assert their rights. This document is valid throughout European Union territory (except Denmark and Ireland). Its use produces legal effects that allow its possessor to avoid numerous procedures.
Rules of an international succession in terms of taxation?
As mentioned above, the European regulation n° 650/2012 “does not apply to tax, customs and administrative matters”. For details in this area, one must refer to any tax treaties signed between countries, which then take precedence over the European regulation. In the absence of tax treaties, the answers are to be found in the tax codes of the countries concerned.
Now you know the rules of an international succession! If you would like expert assistance in obtaining a European Certificate of Succession or in asserting your rights in an international succession, contact us now.