European Union and inheritance law

As European Union citizens become more internationally mobile, legal difficulties frequently arise in regards to international inheritance. In order to address these issues, EU Regulation 650/2012 was adopted. This regulation, which applies only to wills drafted on or after August 17, 2015, have been put in place to harmonize the rules on jurisdiction and the applicable law governing inheritance matters. The purpose of the regulation is to establish new legislation for European and international inheritance in matters of conflicts of jurisdiction and conflict of laws. The principle of the law applicable to the entire estate remains that of the state in which the deceased resided at the time of their death. Nevertheless, European regulation innovates in the introduction of “professio juris” – the right to stipulate which law that will govern the will contract.

The law applicable to the estate can be decided by the testator

In order to avoid situations akin to French law, which distinguishes between the applicable law of the last domicile for the furniture and the law of the country in which the real estate is situated for the inheritance of land and buildings, the 2015 regulation seeks to establish a unified law of inheritance. Thus, as of August 17, 2015, French law provides, pursuant to said Regulation, that the applicable law to any estate will be that of last place of testator’s habitual residence. The purpose of this law is to regulate the disposal of the entire estate, both movable and immovable. This principle also applies to states that aren’t members of the European Union. Therefore it will apply to any deceased who had his last habitual residence in Israel. However, under article 21.2 of the Regulations, it is provided that where an inheritance is manifestly closer to another state than that of habitual residence, the applicable law is that of the other state.

Also, if at the time of death the deceased did not have his habitual residence in an EU country, the jurisdictions in which the estate is situated remain competent to rule on the whole estate under two conditions:

– If the deceased was a resident / citizen of that state at the time of death;
– If the deceased was previously a resident of this EU country and less than 5 years have elapsed since their change of residence. Consequently, a person who habitually resides in Israel but possesses property in France will have his estate be subject to French law if both conditions are met.

When the last domicile of the deceased is located in France at the time of their death, the law French law is applicable to movable property, since the right of the last domicile takes precedence.

The choice of applicable estate law: professio juris

The provisions of Article 22 of the Regulations state that a citizen residing abroad may choose to submit their entire estate to the the law of the country of which he is a national at the time writing their will or at the moment of their death. Thus this new regulation allows the testator to choose which law will be applicable to the disposal of his estate. However, as of August 17, 2015, the testator will no longer be able to enforce the law of the state in which they have a habitual residence at the time of writing their will. The designation of a law under which the testament will be adjudicated must be made expressly in the will, which must be valid according to the law of the chosen country.

This choice of national law has the advantage of stability, since the change of residence will not call into question the settlement of the estate. In this respect, the principle of liberty of inheritance is much more important in Israeli law than in French law. Israeli legislation grants the deceased much more liberty in the drafting of their will, removing any obligation of reservation of parts of the estate to the children or to the spouse of the testator.

Finally, it is important to point out that whichever country the deceased was a resident of at the time of their death will tax the estate.