- the action or process of referring a case or dispute to the jurisdiction of another country.
Written by Sarah Ahchoon, Wealth Planning Solicitor at Rooks Rider
“Renvoi”, my favourite word of the week! You’d be excused if your first reaction to the word was not in fact “ooh la la”, but instead it had you reaching for the aspirin!
I recently had a case which required me to spend some time delving into the EU Succession Regulation (EU) No 650/2012 (“Brussels IV” or “SR”). Specifically, looking into the question of which laws of succession would apply to the estate of our clients who are:
- originally from South Africa,
- habitually resident and domiciled in the UK (but not yet nationals of the UK),
- with real estate in France.
Yikes! And further,
- whether they could make an election under Article 22(1) of the Succession Regulation in their Wills for English laws to apply to their estate.
Whilst I share my findings with you here, I add the caveat that one should not under-estimate the complexities of geographically diversified estates on wealth, estate and succession planning, and expert legal advice should always be sought when dealing with an estate exposed to multiple jurisdictions.
First, let us consider Brexit:
Regardless of Brexit, the regulations are going to continue to be relevant to clients who have assets in a SR state (i.e. those EU countries who have opted into the regulations) whether they are EU nationals, UK nationals or even non-EU nationals. If anything, Brexit makes it clear that the UK is a “third state” and renvoi will continue to be relevant, as I explain in further detail below.
What do the Regulations say?
The Succession Regulation allows for the laws of one country to apply to the whole estate of a deceased person. It applies to deaths after 17 August 2015, and applies to nationals or residents of SR States, and anyone with assets in a SR State.
The default position under the regulations is that the law of the country in which the deceased was habitually resident at the time of death will apply to their whole estate.
For our clients who are from South Africa but habitually resident in the UK with property in France, the regulations state that the laws of England and Wales will apply to their whole estate.
However, and this is where my favourite word of the week comes in, as the UK is a third state, reference is made to the English Private International Law Rules (“English PIL Rules”). These rules provide that immoveable property (such as a villa in the Alps) is governed by the lex situs – the laws of the country in which the property is situated.
In the case of our client, the property is situated in France, and therefore under English PIL Rules, the laws of succession that will govern the asset is the laws of France. And so, there is a reference back (renvoi) to France, which would be accepted by them under the Succession Regulation.
Therefore, in our clients’ case, forced heirship rules may apply to the succession of their French property and this may not be desirable.
Election and the exclusion of renvoi
Under Article 22(1) of the regulations, our clients can choose the law of any nationality that they have at the time of the election or at the time of death to apply to their estate. This would then exclude renvoi and would override the default provision.
However, as our clients do not hold British nationality, they cannot elect for the laws of England and Wales to apply to their estate. They can however elect for the laws of South Africa to apply to their estate if they so choose.
This would depend on a number of factors, such as their domicile, the placements of their other assets, and their plans for the future.
Some concluding advice
Clients who own assets in one or more EU countries are advised to review their Wills in light of the Succession Regulation.
Any election under Article 22 will require careful drafting.
Many clients will hold a number of different nationalities during the course of their lives.
The interplay between those nationalities and the laws of succession of those countries, as well as the client’s current circumstances, will be key in determining which nationality is elected to apply to their estate as a whole.
For advice on this matter and assistance in reviewing and drafting your Will to ensure that your estate is protected according to the laws applied to the jurisdiction of your wishes, please get in touch.