New European Union rules make inheritance choice easier for expats

by Ray Clancy on September 1, 2015

New rules introduced by the European Commission should make it easier for expats to choose whether their foreign assets are subject to local inheritance law or laws from their native country.

But, as with many things within the EU, it is not likely to be plain sailing. For example, Denmark, Ireland and the UK are not participating which means that they will still apply their own succession procedures as governed by their rules.

EUflagDealing with inheritance is never easy and can be complex wherever you live and the EU has tried to streamline these issues but member countries can opt out.

The idea behind the change is that expats will no longer be obliged to meet local ‘forced heirship’ rules that dictate who must inherit their foreign investments.

So, apart from in the countries which have opted out, expats will have more flexibility in how they distribute your estate and assets when they die. An EU spokesman said that the new rules should also help with the speed with which estates can be dealt with, and reduce the expense of cross border succession.

But the situation is still complex. In the UK, for example, individuals are free to leave their assets to whomever they wish, as long as this is clearly drawn up in a valid will. But most EU member states have had some form of forced heirship, where at least a share of property and other assets must be left to certain members of the immediate family, usually a child or spouse.

So British expats should, under the new regulations, be able to apply the UK rules to foreign assets, as long as they are still a British citizen. Indeed, they are advised to make sure their will is up to date if this is what they want to do.

The change is likely to benefit home owners the most as this is often an expat’s main asset. So under the new rules the owner should be able to leave the property under the law of their native land.

According to George Hodgson, deputy chief executive of the Society of Trust and Estate Practitioners in the UK, said the owners should consider altering their will accordingly. While the UK and Ireland don’t have forced heirship rules, there are some in Denmark.

Some areas of the law are unclear, for example where someone lives in a second country and owns property in a third, or where a person moves country after making their will.

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