By Carolyn Bagley, partner at Hewitsons LLP
Brexit will have multiple legal effects upon us, including the use of passports to visit the EU, which will now need six months unexpired, your free health cover while you’re there and maybe your liability to foreign wealth taxes.
For those who own a holiday home in the EU, there also be a change in the law concerning their wills?
Here at Hewitsons, we’ve had several enquiries from people concerned that once we are no longer an EU member state, protection against forced heirship, commonplace in many European countries, won’t apply to us and this opportunity for testamentary freedom – our freedom to leave in our will what we want to whom we want – will be lost.
Until 2015, there was a problem for anyone who died owning an asset in the EU, or rather a problem for their heirs, which arose from the difference in how our countries view families and, in particular, their ownership of land.
In England, we have ‘testamentary freedom’, which means we can write our wills to leave our assets as we please. This has only been limited at all since 1975, when a law was enacted, amongst much publicity, to provide protection for both ‘wives and mistresses’, although it also protects other family and dependents.
The 1975 act allows certain disappointed persons to go to court to ask for a review of the will, but doesn’t remove the basic freedom. The will is still valid until it is challenged – and often even afterwards.
It is the opposite in most other countries, including most of the EU. In those countries, ‘forced heirship’ applies, which means that your will is effectively written for you – whether you like the terms or not.
In some countries, there is no freedom at all. In others there is limited freedom, for example you could decide, in respect of a one-third share only, who inherits, but with the potential group being only your children.
Typically, under forced heirship, the foreign assets might all go the children or there might be a partial life interest for the surviving spouse, although rarely anything outright. Spouses receive less protection in foreign countries than in England, whereas children from previous relationships receive far more protection and it’s often impossible to disinherit offspring.
The EU enacted regulations in 2012, which came into effect in 2015, concerning succession generally, including rules about wills by those not resident in the EU.
Since 2015 it has been possible for carefully written wills to override forced heirship for English people in respect of their EU assets. Using that power needs consideration because overriding those rules, by itself, may cause other problems.
There is no simplicity with the ownership of foreign assets and the price for that is often paid by the heirs. However, the 2015 EU regulation does give a great freedom to the English and can make life a lot easier for the heirs, especially spouses, civil partners or children from a second marriage. It should be noted that this protection never applied to foreign assets outside the EU.
Fortunately, the wording of the EU regulations means that this opportunity to avoid foreign forced heirship in respect of your EU holiday home won’t be lost. You can still protect your family from forced heirship – the only catch is that, as before, you still need to ‘get around to it!
To find out more, contact Carolyn Bagley on 01908 247015.