STEP BeNeLux (the Society of Trust and Estate Practitioners) organised a lunch event at the Cercle Munster in Luxembourg-Grund on Monday lunchtime on the topic of Preparing for the EU Succession Regulation.
Over 30 members attended the event at which Dr Daniel Lehmann, Partner at Baker Tilly Roelfs in Munich, delivered the presentation which had a particular focus on forced heirship rights and foreign property involving succession cases in Luxembourg & Germany.
Luca Tomasi and Louise Benjamin of STEP BeNeLux introduced the speaker who founded STEP in Germany and which now has 95 members.
He explained that the EU Regulation No. 650/2012 dated 4 July 2012 is to come into force and be appicable from 17 August 2015. It covers four areas: determination of applicable law, determination of jurisdiction, recognition and enforcement of foreign decisions in succession matters, and the european certificate of succession. What it does not cover is gift and inheritance, as well as non-double taxation treaties. Also, matrimonial property regimes are also not covered, which he explained as being a large issue for intestate shares of surviving spouses.
The EU regulation will determine which civil court has jurisdiction to take action regardingestate distribution, etc. So, midnight on 16-17 August 2015, the regulation will apply to determine the applicable succession law.
In Luxembourg fixed assets are governed by the Situs Law and movable assets are governed by the last residence (country) of the deceased. The connecting factor between countries, such as Luxembourg and Germany, shall be one’s habitual residence, although the factual description of such is not clearly defined where week-day/week-end residence and language skills can all be taken into account to determine habitual residence. In the case of dual or triple nationality, one is free to choose which to apply.
Illustrating the example of a German national with habitual residence in Luxembourg; this could lead to forced hesirship entitlements, but he acknowledged that the European Court of Justice could be ruling on such cases for many years to come.
Another example cited was the advantages that can be gained by UK or US nationals owning property elsewhere in Europe, in realtion to which they can specify their choice of jurisdiction – in relation to wills covering fixed assets in both jurisdictions.
He explained too that the concept of the European Certificate of Succession is new to most jurisdictions. A single certificate can be used across dufferent jurisdictions. He concluded by stating that he envisages a lot of confusion in this area over the coming years.
In realtion to a question from those attending, concerning UK nationals currently being advised to write a second will in relation to foreign property, he warned about potential confusion arising out of different terminologies and concepts in different jurisdictions. He advised about setting up two wills in such circumstances, and acknowledged that the current practice of drawing up a main will in one jurisdiction, and a secondary will in a second jurisdiction where the sole assets are fixed assets (e.g. a property), will continue.
STEP (The Society of Estate and Trust Practitioners is the premier global trust and estate planning organisation dedicated to informing and educating estate planning and administration professionals. STEP has nearly 18,000 members in 80 jurisdictions and provides its worldwide members with international learning and a business network focusing on the responsible stewardship of assets today and across the generations. See www.step.org and www.stepbenelux.org
Photo by Geoff Thompson (L-R): Luca Tomasi, STEP Benelux; Daniel Lehmann, STEP Germany; Louise Benjamin, STEP BeNeLux