Delchev & Partners

NEW EU REGULATION ON SUCCESSION 

GENERAL REMARKS 

Generally, succession is related to the transfer of assets, rights and obligations of a deceased person to their heir(s) by a reason of death. In their nature, the succession matters are entirely governed by the domestic legislation of each Member State. When the deceased’s habitual residence was in the same Member State as the habitual residence of the heir, the applicable law governing the succession would be the domestic law of that Member State.  On the other hand, successions with cross-border elements very often are more complex and controversial.

Approximately 450 000 cross-border successions occur in the European Union every year. First, it is hard to distinguish the applicable succession law. Second, due to the differences in the succession laws in the Member States and the conflicting legal rules, it is difficult to solve certain succession issues. A major step for the overcoming of these obstacles is the adoption of the new Regulation (EU) No 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (the “Regulation”).

The Regulation provides means by which citizens are able to choose whether the law applicable to their succession would be that of their habitual residence or that of their nationality. The Regulation also avoids parallel proceedings and ensures that a succession is treated under a single law and by a single authority.  At the same time, the Regulation does not make any attempt to alter the national rules on secession. The tax arrangements for assets making up a succession, as well as the property and family law, continue to be governed entirely by the national rules of each Member State.

APPLICABLE LAW TO SUCCESSION – GENERAL RULES 

The Regulation introduces the general rule 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”. However, by way of exception, if it is clear that the deceased by the time of his death was manifestly more closely connected with a State other than the State of his habitual residence, the law applicable to the succession shall be the law of that other State.

APPLICABLE LAW TO SUCCESSION – CHOICE OF LAW 

Along with the abovementioned general rules, the Regulation adopts a new approach regarding the choice of law. Article 22 of the Regulation provides EU citizens with the opportunity to make a declaration in the form of a disposition of property upon death and to choose the law governing their succession to be the law of the State whose nationality they posses “at the time of making the choice or at the time of death”.