tying up loose ends
The mobility of European citizens across Europe has increased
the celebration of international marriages between people of
different nationalities but, inevitably, more of the divorces that
have taken place and more of the estates that have to be settled
involve two or more jurisdictions.
Most of us do not think of the legal implications of living with
somebody of a different nationality, living in a different European
country, getting married and the consequences of divorcing or
dying.
Suppose a German national, married to an Austrian national, has
a house in Oxford where he works for BMW. He has a holiday home in
the Czech Republic and plans to retire there, but his wife cannot
stand the cold and wants to retire to Spain, where they have a
joint bank account left over from years ago when the husband worked
for SEAT and where they married.
Dealing with multiple jurisdictions and the complexity of
different legal systems, such as French inheritance law and the
Napoleonic Civil Code, has been a problem for family lawyers in
Europe. In an attempt to remedy the problem, a few years ago the
European Commission started studying a single law and rules that
would apply to Europe and enable a person to sort out his affairs
during his lifetime. We know the “règlement de Bruxelles I and
II” dealing with divorce, but nothing has ever been achieved
to simplify our “day-to-day” legal concerns and notably the
settlement of an international estate. The European Commission has
recently approved two pieces of legislation: the “règlement de
ROME III”, dealing with the law applicable to a divorce, and
the “règlement europeen”, dealing with the settlement of an
estate.
Règlement de ROME III
The règlement was voted by the European Parliament in December
2010 and came into force on 21 June 2012. In accordance with this
new law, a couple will now be able to choose the law applicable to
their divorce. The aim of the rules is to reduce:
- 'Law Shopping' by a spouse to decide which law to choose
- 'racing' to start a procedure first and have the most
beneficial law applicable to a divorce in accordance with the
“règlement de Bruxelles II”.
However, the règlement is incomplete; it does not deal
with all the aspects of a divorce and is limited to the law
applicable for the divorce, especially if two spouses have
different nationalities, nor does not resolve the question of
capacity of each spouse, validity or cancellation of marriage, and
the effects of the divorce. In other words the rules seem
restricted to the choice of the law applicable to the divorce, but
not the consequences resulting from it.
In accordance with Article 5 of the règlement, the couple can
decide the law applicable to their divorce in an agreement. The
choice is between:
- their common and normal residence
- the last residence of the couple if one of them still lives
there
- the law of their common nationality
- the law of for the Court.
Article 8 of the règlement sets out options for those
who have not chosen a law. These include the law of habitual
residence of the spouses at the time when the court is seized of
legal proceedings, and the law of the last residence of the
spouses, subject to certain conditions.
European rules regarding succession
The règlement regarding the regulation on jurisdiction,
applicable law, recognition and enforcement of decisions and
authentic instruments in matters of succession and the creation of
a European Certificate of Succession was voted on the 7 June 2012.
. It will become effective in 2015 and be binding on all 27 EU
member states, except for Denmark and the UK and Ireland.
The purpose of the new “règlement” in Europe is to
harmonise the conflict rules regarding settlement of an
international estate. As we know, each country has different laws
regarding the settlement of an estate. Some, such as France and
England, will say that land, including a house or flat, must be
dealt with by the law of the place where the property is situated,
whereas other assets are dealt with by the law of his domicile or
habitual residence. Others, such as Italy or Germany, will apply a
unique law, generally the law of nationality.
Regarding the administration of an estate, countries like France
will leave the responsibility to the heirs, whereas Common Law
countries such as England will prefer a third party to deal with
the administration. The aim of the règlement is to allow a
person to identify and choose which law should govern his worldwide
estate without distinguishing immovable from movable. In accordance
with the règlement, the law applicable to an estate should
be the law of the habitual place of residence at the time of death.
However, the règlement has also provided an exception for
people who do not like the law of their place of residence, have no
fixed residence, or are temporarily in another country. With the
new règlement, any such person will be able to choose that
the law governing his estate will be the law of his
nationality.
The règlement has also created a European Certificate
that could circulate in different countries where the deceased has
assets. Again the purpose of this new certificate is to simplify
the settlement of an estate in another country and anticipate any
complicated formalities. The document can be provided by the Court
or an authority in the said country, such as notaire. It will set
out the names of the beneficiaries and will be a proof for the heir
of his entitlement and capacity to inherit. As far as French law is
concerned, this certificate could replace the “acte de
Notoriété”, which is prepared by a notaire and required by
banks to release and close bank accounts. With this certificate,
the heir could produce a copy that could be used in different
countries to comply with the local law. It is unfortunate that the
UK could not opt for the initial proposal, as doing so would have
allowed long-since completed lifetime gits to be cancelled, with
the charities or individuals concerned having to return the assets
concerned. However, the certificate should, in due course, speed up
the process and timescale of obtaining a Grant of Letters of
Administration from the Probate Registry for European residents
with assets in England.
The certificate is still being drafted by the
European authorities and it may be subject to amendments to adapt
to each European Country. It is expected to apply from
2015.
I think that lawyers will be extremely busy in
the next few years, dealing with international divorce and
settlement of estates and advising their clients how to structure
their estate to prevent any conflict when dealing with divorce or
settlement of estates. As far as we are concerned, French Courts
have recently commented on the “Hague Convention 1978” governing
the law applicable to marital regime and this is also something
that will need to be considered, especially with the current Euro
Crisis and the increase of immigration and emigration across Europe
to find a better life.
