Changes to European inheritance rules
If you own a holiday home in France, changes last month now mean you can leave the home to your chosen beneficiaries rather than having to comply with the heirship rules in France.
Previously, local laws dictated who could inherit and in what proportions. This has affected many people, including the turkey mogul Bernard Matthews – when he died in 2010 he owned a £12million villa near St Tropez. His wishes were to leave the property to his long-term partner but his three children used French law to claim a 75% share of the property for themselves. French law had dictated that up to 75% was to be left to children regardless of whether the deceased had left a Will or not. Under the new EU succession regulation known as Brussels IV, the law of the deceased’s home country will apply if a Will has been drawn up. However, if there is no Will, French law will continue to dictate who inherits.
So it is even more imperative now that a Will is drawn up than it was before. The situation in Spain has, for some time, been that Britons have been able to use the inheritance laws of the UK when leaving property to beneficiaries. However, under Brussels IV, if there is no Will in place the local laws will now apply and, as a result, two-thirds of any asset must go to children and one-third to a spouse. This is also the case for other European countries such as Greece, Portugal and Italy. In Greece, 25% of property is usually inherited by a spouse and the rest goes to children. In Europe the local laws focus heavily on protecting and supporting children. However, most people wish to leave any property to their spouses initially. The situation now is that if you have no Will in place your wishes are unlikely to be met, as the local laws in the country of your property will apply and these differ from the Rules of Intestacy that apply in the UK.
Most of you reading this Update have a Will in place, so your wishes have already been addressed; but consider your friends and family who have foreign assets – are their Wills and affairs in order, so that they too can benefit from UK law on their foreign assets? Or will their property still fall under local succession rules?