All is well a year on from EU inheritance changes

This October Paris hosts the International Congress of Notaries for the first time since 1979. The Connexion speaks to the event’s president Lionel Galliez about a key topic - the EU
inheritance regulation

A year on from the implementation of ‘Brussels IV’ – the new EU regulation on inheritance – on August 17, 2015, a leading lawyer specialising in international issues says its arrival in France has been smooth.

  Notaire Lionel Galliez, from Paris, told Connexion there have been no unforeseen controversies relating to the regulation, which notably allows expats to bypass strict French rules governing to whom they may leave property by opting for the law of their country of nationality to govern their whole estate.

This choice is possible for Britons despite the fact that the UK opted out of the regulation. It is also possible for people from other countries around the world whether EU states or not.

In addition, as the regulation is not limited to nationalities that signed up to it, Britain’s intention to leave the EU should have no impact, Mr Galliez said.

He said the regulation and its impacts will be one of the main agenda items at the International Congress of Notaries, which brings together notaires from some 86 nations, on October 19-22. He is its president.

“As the congress is not only for Europeans we will be finding out how non-European countries see the regulation,” he said.

“Canada, Australia, the USA etc. We will have specialists from all over the world.”

One of the question marks surrounding the regulation was how the

UK would interpret it in the case of Britons resident in the UK owning French property.Due to the British opt-out, in theory it was possible that the UK would continue to operate according to the default international succession rules, in other words that property in France is subject to French law, including rules requiring you to leave part of your inheritance to your children, with fixed minimum portions.

However Mr Galliez was not aware of any difficulties arising over this. “English law doesn’t have any problem with letting French property follow English law rules,” he said. “All you have to remember is that the principle is that you choose one system of law for the whole of your estate.

“You can’t say part will be dealt with under French inheritance law and part under English law. But if you draw up a will saying English law will apply, then any French homes will equally be dealt with under English law.”

He was also not aware of any attempts to contest the use of the regulation. “Our role is precisely to avoid things having to go to court – to give legal security and an absence of conflict,” he said.

He added: “In a situation where a British person has property in both France and the UK, I advise preparing a will so as to be clear about the law which applies but also to have it drawn up in a team by a French notaire and a British solicitor, who can consult each other and iron out problems.”

Notaires who are used to dealing with British clients are likely to already have appropriate UK contacts, he said.

When it comes to such estates, some experts consider it is best to have two wills, one in French for French property and one in English for English property.

“It may simplify matters,” Mr Gal­liez said. “However in this case it is best for the notaire and solicitor to check that there is nothing in one will that will prevent the execution of the other.

“Another school of thought is to have one single will, which makes certain that there are no contradictions, but it must be drawn up with the help of the two parties to make sure it is in a format that will be effective in the two countries.”

One grey area last year was whether or not a ‘grant of probate’ – a court document confirming the validity of the will and allowing it to be executed – would be needed to make use of English law. Mr Galliez said: “If an English court is applied to to deal with the estate then it will be necessary to follow English procedure, including a grant of probate. This will be the case for assets located in England - especially if there is real estate invol­ved. However for an English resident who has a French home –in France we don’t need a grant of probate to transfer the ownership of a property under a will.

“If an English court is involved and the will doesn’t respect the format required to be executed there, there will be a problem, which again is one reason I recommend having a notaire and a solicitor involved.”

Mr Galliez said all notaires should now be capable of drawing up a will making use of the EU regulation, however ones with a certificat en droit international privé (certificate in international private law) are especially expert at such matters and ideal for dealing with more complex estates. It is worth asking notaires directly if they have such a qualification.

In any case, all notaires have access to centres called Cridons, run by the profession, which all have specialists in international private law. A notaire who is not a specialist can contact his or her Cridon to check the fine points of the law as appropriate.

Mr Galliez said: “Notaires had intensive training in applying the regulation so the great majority were well-prepared, in good conditions.”

It remains true that for a French notaire it is simpler to make use of French legal strategies to achieve a client’s wishes rather than to choose English law. However, invoking the regulation does not necessarily make matters “much more complex” but it does cost more, he said.

“If it’s a question of an English person living in France, who only has possessions in France, they can, of course, opt to do everything under French law.

“Plenty of people have two children and just want each to inherit a half for example. In such cases French law works fine, even without a will.”

As expected, nationals of non-EU countries have been able to make use of the regulation.

“A non-European can for example - and I’ve had clients do this – designate the law of an American state which they have links to, or where they live.”

Problems have not been encountered with double nationality. “It simply gives more choice. For example an English/Australian person living in France has a choice of opting for Australian or English law.”

Mr Galliez said British people had made use of the regulation to have more freedom than the French law allows.

“For example, as French law requires set portions, if you want to give a lot more to one child than another – say three-quarters to one and a quarter to the other – you may use English law to make this possible.

“Or you might want to give more to the children of a second marriage than to those of the first, or to give more to your partner in a situation where you have a child from a first marriage [who would otherwise receive a set share under French law].

“English law in such cases gives more freedom while French law protects the children. Others may want to give to stepchildren.”

You should note though that choosing the regulation does not change the tax system and people who are not legally related still have to pay a steep 60% inheritance tax.

While the regulation will be an important item at October’s conference, notaires will also be reviewing the use of digital documents and techniques for signing at a distance.

“For now this is not possible between two countries but no doubt that will change in the future,” Mr Galliez said.

They will also look at the notaire tiers de confiance (“trusted third party notary”), a recent development allowing notaires to help people complete tax returns, especially with regard to allowable deductions such as tax credits. The notaire attests to the deductions and retains documents giving evidence of them.

Send your queries about inheritance to news@connexionfrance.com. We will do our best to provide answers in future editions.

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