Wills – A Time for Review with Foreign Property.

Owners of French gites, Spanish poolside villas and Italian ski Chalets are now finally able to decide who inherits their getaways. From August 2015 a new European Agreement came into effect which changes the law.

In the UK we have what is known as ‘freedom of testamentary capacity’ this means that a Testator the person making the will can leave his or her assets to whom they wish. Nobody under UK law where a will is concerned is entitled to anything. That is the general rule.

However, this is subject to certain legislation and case law. There has been a number of cases in which the courts have seen fit to interfere in the above. Careful planning and will drafting is required in such circumstances.

However in Europe this is not the general rule and many UK citizens with holiday homes are unaware that so called ‘forced heirship’ rules means they cannot freely choose who inherits properties in most European countries, with local laws usually stipulating that a certain share of a property must pass onto particular family members.

But now with new European regulations on cross-border legacies allow people to specify that a property be bequeathed under the law of their country of nationality or ‘habitual residence’, opening up new options for whom they wish to leave that property to.

Forced heirship rules are widespread across Europe and normally say that the children must receive a specific share. There are people who are not aware of this. But you can now elect to have a different law applied.

Legacies have increasingly been caught in a web of contradictory inheritance laws across Europe as people mover across borders more often. The new regulations are an attempt to streamline these and reduce prolonged and very expensive disputes.

Owners of assets elsewhere in the EU should now review their wills.

The change does not affect tax rules, which are applied in the country where a property is located.

These can be particularly onerous where the property is left to an unmarried partner.

The new succession rules are further complicated as the UK, Ireland and Denmark have opted out, meaning overseas owners of properties in these countries cannot choose to invoke laws from elsewhere.

The UK and Ireland largely allow people to choose who inherits their property, but Denmark implements some forced heirship rules.

Owners with properties abroad should now review their wills.