Within the European Union, the EU Succession Regulation determines which national law applies to inheritance cases with an international context.
Many people fulfill their dream of a sunny residence in retirement with a holiday apartment in Tuscany or a finca in Mallorca. However, this can have implications in the event of inheritance. If the deceased owned a house in Germany and a condominium in Spain, the question arises as to which national inheritance law applies.
In cross-border inheritance cases within the European Union, the EU Succession Regulation decides which national inheritance law is to be applied. As the law firm MTR Legal explains, the law of the country where the deceased had their last habitual residence applies. With the introduction of the EU Succession Regulation, the residence principle has replaced the nationality principle. If the last habitual residence is, for example, in Spain, Spanish inheritance law applies. If it is in Germany, German inheritance law applies.
Within the EU, around 500,000 cross-border inheritance cases are counted annually. The heirs may live, for instance, in a different country than the deceased, or the deceased also has a residence abroad in the EU. The Succession Regulation now stipulates that in the event of inheritance, the national law applies in the country where the deceased had their last habitual residence.
Testators should consider that national inheritance regulations can differ significantly from each other and this can have an impact on statutory succession, inheritance shares, compulsory portion claims, gifts, usufruct claims, and other important aspects. It can also happen that dispositions in a will are not effective abroad in the EU. Existing wills should therefore be reviewed for the effectiveness of dispositions if the habitual residence is relocated to another country. For example, the popular ‘Berliner Testament’ or ‘spousal will’ in Germany is not known in every EU member state and could potentially be considered ineffective.
On the other hand, the Succession Regulation and the application of another state’s inheritance law also offer opportunities for arrangement that can be utilized if necessary. If the testator wants the national inheritance law of their home country to apply, they can stipulate this in a will.
Competent lawyers in international inheritance law can provide advice.
