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Europeans abroad beware! Inheritance Laws will be EU-regulated from 2015.

(Dubai & Berlin, 30/09/2014) The increasing “European-ization” of all areas will now also make no longer halt before inheritance. At least, once international background is concerned. The main changes with validity for successions from 17/08/2015 – an overview.

Inheritance LawOn 17/08/2012 already, the new European Inheritance Regulation (Regulation EU No. 650/2012) entered into force across the EU – with the exception of the United Kingdom, Ireland and Denmark. The new rule will be applied to succession cases that occur after 17/08/2015. For expatriate EU citizens who have already created a will based on the “laws of their home country”, this basically means:

An amendment of the will should be examined urgently!

 

The Law of the Habitual Residence is ruling!

The new regulation relates not any longer to the nationality of the deceased, but to the place of “Habitual Residence” (cf. Art. 21). This applies both, to the jurisdiction of authorities and courts as well as to the application of substantive succession law!

For EU expatriates with focal residence in the United Arab Emirates, this means: In case of death, automatically” UAE Inheritance Law = Sharia Law becomes applicable. Foreign Inheritance Laws differ considerably from European legal norms in general. There are not only in procedural law, but also and especially in compulsory part-definitions, determination of heirs, etc. enormous differences between different legal systems!

 

“Habitual Residence” – what does this mean?

“Habitual Residence” is not clearly defined by law. The Probate Court, “activated” by an existing testament, examines always on individual basis all circumstances of the testator as an overall assessment. As a determination criteria, all circumstances have to be evaluated to indicate that a stay abroad was not temporary. The focus of the social environment, including family and professional relationships plays here a large role. “Habitual Residence”, thus determined by the Probate Court, shall indicate a strong bond with the concerned State.

 

You should select the Law of your Inheritance!

Any legal uncertainty, incurring from August 2015 onwards through the connection with the law of “Habitual Residence”, should be eliminated immediately with a so-called Law Choiceespecially by Europeans, living abroad. In case of different “Habitual Residencies” from the individual nationality, the testator may determine that the law of the country of his nationality shall be applicable to his succession. Result is a precedence over the law of the “Habitual Residence”.

Attention! This Law Choice can only be declared in a “Testamentary Disposition” (i.e. usually only in the will itself)! Either through a Law Choice clause in the will or by “Other Provisions” of the “Testamentary Disposition”. If you want to reach legal certainty, always an explicit statement should be included in the will.

The Law Choice can also already now be included in wills: According to Art. 83 para 2 of the EU Regulation, such inclusions have to be acknowledged – if made before 17/08/2015.

 

Next Obstacle – Inheritance Unity!

Both, the link to the “Habitual Residence” as well as the Law Choice must follow the Principle of Inheritance Unity, according to the new regulation. So far, Art. 25 para 2 EGBGB gave a limited Law Choice: For example related to individual plots situated in a specific country, or, the entire domestic real assets. Under the new EU Regulation, these so-called Inheritance Divisions are no longer permitted! Exceptions: Inheritance Divisions, declared before 17/08/2015, remain as per Art 83 para 2 of the EU Regulation effective only, if the testator was habitually resident in the country of his nationality at the time of determining the Law Choice.

 

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