Your will – your choice
The UK has recently opted out of EU succession rules — how will this impact your clients with assets abroad?
The 17th of August this year marked a significant change in succession rules for those with assets in Europe. The European Succession Regulations, referred to as Brussells IV, state that a person’s assets will be governed by the law of their ‘habitual state’. Partly due to the ambiguousness of this statement, the UK decided to opt out, along with Ireland and Denmark.
Was this the right decision for British people?
The matter becomes complicated when a client’s assets, such as a holiday home, are situated abroad and may be subjected to the national law of the country in which the property is based.
In the majority of EU countries, strict succession laws are in place to govern the distribution of a person’s estate after death. Since British inheritance laws allow a person to pass on their estate to whomever (or whatever!) they wish, it would appear that opting out of this new ruling maintains the current freedoms.
Ireland-based solicitor, Aileen Keogan, who specialises in succession planning heralds the new regulations for their clarification. However, other solicitors have argued that the area of succession continues to be a legal minefield for those with assets in other countries.
Where do clients currently stand in relation to assets abroad and their succession?
Previously, assets held outside of the UK at the time of a UK citizen’s death would have been subject to the national law of the country the asset is situated, rather than English law. Even if assets were stated to be distributed in a specific way according to the client’s will, the foreign law would prevail.
Since the decision to opt out, people in the UK can now change their wills to reflect their wishes regarding assets overseas. Coined as making a ‘choice of law’, the new rules allow Britons to add a clause to their will in order to accomplish their succession wishes.
George Hodgson of STEP, a body who specialise inheritance, has warned of the risk clients face if they do not update their wills following the recent changes. Without making a clear choice for national law dictating the distribution of their estate, clients will still risk their assets abroad being subjected to the sterner laws of another country.
The key advice for wills and probate solicitors is to be aware of the issues facing those with foreign assets when advising clients, who may not be aware of the impact of recent changes.
What do you think about the changes to succession rules? Do you think that the rules are clearer for advising your clients about their estate abroad?