Wills Dealing with Property Abroad
| Author | Lesley King/Peter Gausden |
| Pages | 101-109 |
It is becoming much more common for individuals to own foreign property. The property may be investments or land and is typically a holiday home. The problem is knowing whether a will executed here under the law of England and Wales is going to be effective to deal with assets located outside the jurisdiction; similarly, whether a will executed abroad is capable of dealing with assets here. Whether or not the will is effective may depend on a number of factors, not least:
(a) the location and status of the testator, in the sense of domicile, nationality or degree of residence, at the date of either the will, or death or both;
(b) the nature of the property as to whether it is classified as ‘movable’ – broadly equivalent to ‘personalty’, or ‘immovable’ – broadly meaning an interests in freehold or leasehold land;
(c) the domestic law and the private international law of the country or state seeking jurisdiction and its interaction with the law of any other country or state, such as that where the will was made, where the property is located or with which the testator had a connection as in
(a) above.
(d) the extent, if at all, to which the EU Succession Regulation (EU/650/2012) (also known as Brussels IV) applies (see para 9.4).
Dealing with such issues is far beyond the scope of this book and the reader must refer to a specialist work. However, this chapter can offer some guidance as to the issues that can be encountered.
9.1 Problems caused by owning foreign property
Subject to the EU Succession Regulation (see para 9.4) and limited areas covered by international treaties, there is no internationally agreed form of private international law. In addition to its own domestic legal system, each country also has its own system of private international law. Different countries have different ways of connecting the individual to the legal system.
102 Wills: A Practical Guide
For example:
(a) domicile (the country or state in which the individual regards himself as permanently based and having his ‘centre of operations’);
(b) nationality;
(c) location of assets;
(d) habitual residence.
The result is there may be more than one country claiming jurisdiction over an estate because one country uses domicile, another nationality and another location of assets, and this will inevitably cause difficulties.
Problems also arise because some jurisdictions, like England and Wales, use a common law system normally starting from the premise that testators should be free to dispose of their assets as they wish. Other jurisdictions including many in continental Europe and South America use a civil law system or civil code conferring fixed inheritance rights on certain family members – usually spouses and children. This is referred to as ‘forced heirship’ (see para 9.2).
Furthermore, civil law systems often have a matrimonial property regime so each spouse is treated as owning 50% of all assets acquired after marriage. Therefore, each spouse is able to deal with only his or her interest in the matrimonial assets, irrespective of who provided the funds. This is referred to as ‘community of property’ (see para 9.3).
Inevitably, therefore, there are conflicts when trying to decide what is to happen to assets in cross-border estates.
9.2 Forced heirship
The principle that certain relatives must receive a fixed proportion of the assets can extend even to lifetime gifts. For example, a child may be able to recover assets given away by the deceased before death.
Some countries, for example Italy (before it accepted the EU Succession Regulation), refer back to the country of nationality for the law relating to succession for all types of property. Thus, Italian forced heirship rules would not apply to any assets left by UK citizens, no matter where they were domiciled. However, other countries do not refer back to nationality and so forced heirship rules may apply to non-nationals.
While many cases that would have been subject to forced heirship may now escape due to the effect of the EU Succession Regulation (see para 9.4), in most countries, these forced inheritance rules do extend to
non-nationals. Commonly, the domestic...
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