Irish Succession Law can now apply to your foreign property in the EU

The EU Succession Regulation (EU No. 650/2012)  (the "Regulation") came into force on Monday the 17th of August 2015 and clarifies inheritance of foreign properties.  The Regulation will allow individuals with property assets in EU states who have signed up to the Regulation, to apply their own national laws to their succession assets, thus avoiding the potential inheritance rules which may apply within the EU state where the property is situated.

EU countries where the Regulation applies are as follows: Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Finland, France, Germany, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

It is advised that Irish citizens who own properties in any of these countries review both their Irish and foreign Wills in light of the changes contained in the Regulation.

Purpose of the Regulation

If you have properties in any of the countries listed above you need to know which country's law will govern who inherits your estate.  This is relevant in countries where there are forced heirship rules (i.e. regardless of what is contained in your Will, certain shares of your estate are reserved for close family members, e.g. France).  

Each country has its own rules to decide which law applies which can lead to complications. The Regulation aims to reduce this uncertainty by introducing common conflict of laws rules.

Which country’s laws apply to my estate under the Regulation

In countries where the Regulation applies, the default position is that the law of the country where you are habitually resident when you die governs succession to your whole estate.  As Ireland has opted out of the Regulation, this default position is not applicable to Irish residents with lands and buildings in the countries covered by the Regulation.  As such the succession laws of the country where the assets are located will be the laws applied unless you choose to apply the law of your nationality instead by making this choice in your Will made in the relevant country.

Advantages of making a choice of law

Choosing to apply the law of your nationality will ensure that your estate is governed by the law with which you are most familiar.

Next Steps

If you are an Irish resident who owns land or buildings in any of the countries covered by the Regulation, you should review your Will both in Ireland and the country where the land or buildings are situated to ensure that your estate will pass to your chosen beneficiaries in the most tax-efficient way and to minimise the risks of disputes.

For advice on estate planning and further information on the Regulation, please contact Orlaith McCarthy or William Christopher from our Private Client Team.