Since August 17th, 2015, all countries of the European Union (except for Denmark and Ireland) apply the rules of the European Succession Regulation. The Regulation ensures unity and easier settlement of cross-border successions and avoids the complications and conflicts of law that would arise in cross-border successions with each country applying its own rules. The Regulation contains inter alia rules about jurisdiction, applicable law, the scope of the applicable law, and renvoi. This memo explains in highlights how the Regulation indicates which law is applicable and its scope.
Unity of Estate
The Regulation states that any law specified by the Regulation shall be applied whether it’s the law of a member state or not. This means that even when the Regulation appoints the law of a third state, the law of that third state applies to the succession.
The Regulation continues to state that the applicable law governs the succession as a whole. The Regulation as a starting point applies a system of unity, which means that all the property forming part of the estate, irrespective of the nature of the assets and regardless of whether the assets are located in another member state or in a third state, are governed by one law. This is for reasons of legal certainty and to avoid fragmentation of the succession.
For example:
If based on the Regulation Dutch law applies and the deceased owned an immovable or movable asset in Spain or South Africa, Dutch law also governs the succession of that asset.
Habitual Residence
So which law is applicable according to the Regulation? Article 21 of the Regulation explains that as a starting point, the law of the country where the deceased had his last habitual residence is the law that governs the succession. It’s not always easy to establish what the deceased’s last habitual residence was. There are several criteria to establish the habitual residence, in particular the duration and regularity of the deceased’s presence in the state and the conditions and reasons for that presence. The habitual residence should reveal a close and stable connection with the country.
For example:
If a Dutch national was habitually resident in France at the time of death, French succession law is applicable.
If a French national was habitually resident in the Netherlands at the time of death, Dutch succession law is applicable.
Choice of Law
A person may also choose the law that governs his succession. The Regulation states that a person can choose the law of the state whose nationality he possesses at the time of making the choice or at the time of death. If the person possesses multiple nationalities, they may choose the law of any state whose nationality he possesses at the time of making the choice or at the time of death. So, if a person possesses Dutch and American nationality, he can choose either of those laws to govern the succession.
A choice of law can be made explicitly in the form of a disposition of property or can be demonstrated by the terms of such a disposition.
For example:
A Dutch national living in France wants his succession to be governed by Dutch succession law and not by French succession law. This person needs to make a choice of law in favor of Dutch law.
Renvoi
If the last habitual residence applies to the succession, the private international law of that jurisdiction is taken into account and renvoi may apply. This is a deviation from the starting point of the system of unity. This deviation and therefore renvoi does not apply in case a choice of law has been made by the deceased.
For example:
If the law of England and Wales applies based on the last habitual residence and the deceased owned an immovable asset in the Netherlands, the law of England and Wales applies to the succession of that Dutch asset unless the law of England and Wales refers back to Dutch law, in which case Dutch law applies to the Dutch asset.
The Scope of the Applicable Law
Article 23 explains the scope of the Regulation. In the context of this memo, the following is relevant. The applicable law governs in particular:
- The transfer of (assets of) the estate to the beneficiaries, including the conditions and effects of the acceptance or waiver of the succession or of a legacy;
- 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;
- The sharing-out of the estate.
Examples:
- If the deceased lived in the United States of America and made a choice for the law of (a state of) the US to be applicable to the succession and if the deceased owned a house in the Netherlands, the law of the relevant state governs the transfer of the house to the beneficiaries.
- The powers of a personal representative (e.g., an executor or administrator) are also governed by the law of that relevant state. The powers the personal representative has in the relevant state of the US are also the powers the personal representative can exercise in the Netherlands.
