Freedom of choice: forced heirship or testamentary freedom

England and Wales form a single common law jurisdiction, and a key feature of common law jurisdictions is testamentary freedom. 
This means is that there is no obligation to leave your assets to your immediate family when you die. You can, if you wish, leave your estate to the proverbial cats’ home.

There is one caveat, and that is that a close relative who has been excluded from your will, or whose share of your estate is less than they might have expected, may be able to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975.

Most of continental Europe operates under a civil law system, whereby many countries impose some form of forced heirship.  This means that a proportion of the estate is reserved, usually for any children and often the spouse. 

France

In France the ‘réserve héréditaire’ means that the proportion of the estate that is reserved for the children of the deceased can be up to 75 per cent. 

Italy 

In other jurisdictions, such as Italy, only one third of the estate can usually be disposed of freely, the rest will be divided between the spouse and children.

Private International Law (PIL)

Under the rules of Private International Law (PIL) an individual’s movable assets will follow the law of their domicile, and their immovable assets (such as a holiday home abroad) will follow the law of situs  - meaning the law of the country in which the property was located. Historically, therefore, where UK nationals have owned homes abroad, those homes would have been subject to forced heirship on death.

EU Succession Regulation 

That all changed when the EU Succession Regulation (Regulation 650/2012 or Brussels IV) came into force in August 2015. The goal of Brussels IV was to simplify cross-border successions. The law of the habitual residence of an individual would apply to their worldwide estate, unless they made an election for the law of their nationality to apply. The UK was never a signatory of the Regulation, even pre-Brexit. However, the Regulation can affect UK nationals with assets in the European Union. All EU member states, bar Ireland and Denmark, are subject to the Regulation.

What this means is that a UK national who owns a holiday home in France can elect for English law to apply to the French property overriding forced heirship rules. This means that an individual who owns a house in their sole name can leave that property to their spouse, or unmarried partner, rather than their children, should they so wish.  

However, an amendment to the French Civil Code in November 2021 has complicated matters somewhat. This amendment specifically impacts estates administered under foreign laws lacking an equivalent forced heirship provision by allowing those who have been disinherited to claim compensation ‘droit de prélèvement compensatoire’ if either they or the deceased are EU nationals or live in an EU state. There have been a number of complaints about this change and the EU Commission is currently considering whether by making this amendment, France has breached EU law.

This, together with a case in Germany (Case No. IV ZR 110/21), where UK national tried to disinherit his son by electing English law, and where the German Federal Court rejected the choice of English succession law as it was contrary to German public policy, means that avoiding forced heirship may not always be straightforward, which is why it is vital to take specialist advice from our cross-border experts.

Angharad Lynn is a partner in the private client team with deep expertise in cross-border estate planning, particularly involving Anglo-French estates. Fluent in French and Welsh, she also has a good knowledge of Italian.