Will and Testament for Expats in Madeira

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Will and Testament for Expats in Madeira

by | Tuesday, 2 February 2021 | Personal Income Tax

Will and Testament for Expats in Madeira
What is a ‘cross-border succession’?

A succession is the transfer upon death of the estate — rights and obligations — of the deceased. Rights can be, for example, the ownership of a house, a vehicle or a bank account; obligations can include debts, for example.A cross-border (or international) succession is a succession with elements from different countries: for example, the deceased lived in a country other than that of his/her origin, the heirs of the deceased live in a different country or the deceased owned assets in several countries

Why are EU rules on cross-border successions necessary?

Every year more citizens in the European Union move to another EU Member State to study, work or start a family. As a result, each year more than half a million families are involved in cross-border successions.In cross-border successions, the authorities of several countries may have legal authority to deal with the succession (for example the authorities of the deceased’s country of nationality and the authorities of the country in which the deceased last lived) and the laws of several countries may apply (for example the laws of all the countries where the deceased owned property). Citizens may therefore need to start succession proceedings in different countries and deal with the laws of various countries. This can be costly and may result in authorities issuing conflicting decisions.To make cross-border successions easier to plan and manage, the EU adopted legislation in 2012, the succession regulation (Regulation (EU) No 650/2012).

What does the EU regulation do?

The regulation lays down rules to determine which EU Member State’s authorities will deal with a cross-border succession and which national law will apply to that succession. In this way, a citizen or a testator (the person who makes a will) can plan their succession and heirs no longer need to deal with multiple national laws and authorities.The regulation also makes it easier for a court decision or a notarial document dealing with a succession matter issued in one EU Member State to have effects in another EU Member State. Finally, the regulation creates the European certificate of succession (ECS), a document that can be requested by heirs (as well as legatees, the executors of a will and the administrators of the assets of the deceased) to prove their status and exercise their rights in another EU Member State.

For the purposes of the regulation, the term ‘EU Member State’ should be understood as covering all EU Member States except Denmark, Ireland and the United Kingdom, as the latter countries do not participate in the regulation.

What is covered by the EU regulation? The regulation deals with certain procedural issues linked to a cross-border succession — that is, which EU Member State’s authorities will deal with the succession, which national law will apply to the succession, how court decisions and notarial documents on succession matters will produce effects in another EU Member State and how the ECS can be used.The regulation does not deal with the substantive issues of a cross-border succession, such as what share of the deceased’s assets should go to his/her children and spouse and how free the testator is to decide to whom he/she will leave his/her assets. These issues will continue to be governed by national law.The regulation does not govern certain matters that can be linked to a cross-border succession, for example:

  • he civil status of citizens (for example who was the last spouse of the deceased);
  • the property regime of a couple, whether in a marriage or a registered partnership (that is, how the couple’s assets should be distributed in case of the death of one of the spouses or partners);
  • maintenance obligations towards dependent persons (for example a former spouse or children following a divorce);
  • pension plans;
  • companies, including how the deceased’s shares in a company should be transferred;
  • the recording of inherited property in a register (for example the recording of the ownership of a house in the land register).

The regulation does not deal with tax law either. The national law of each EU Member State will determine which taxes on the succession should be paid and where.

The key principles of the EU regulation

The regulation makes cross-border successions simpler and cheaper.

Authorities and law of the deceased’s last country of residence: the authorities of the EU Member State where the deceased last lived will deal with the succession and, in principle, will apply the law of that EU Member State to the succession.

Choice of law possible: citizens, however, can choose that the law of their country of nationality should instead apply to their succession. This choice of law can be made in a will or in a separate declaration. The country whose law is chosen can be an EU Member State or a non-EU country.

Recognition, acceptance and enforcement in other EU Member States: court decisions on succession matters issued in one EU Member State will be automatically recognised in other EU Member States. If their recognition is opposed, they will be declared enforceable under simplified rules. Official documents (such as notarial documents) on succession matters (for example a will or a certificate of succession) drawn up in one EU Member State will also be accepted and declared enforceable in another EU Member State under simplified rules.

ECS (European Certificate of Succession): heirs can obtain such a certificate in an EU Member State to enable them to prove their status as heirs over assets located in other EU Member States.

Source: European Commission and European Judicial Network

MCS and its multi-disciplinary team, with more than 20 years of expertise, is ready to assist you in assuring that your will and testament meets complies with your wishes and preferred law. Feel free to contact us.

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