Brussels, 13/10/2009 (Agence Europe) - After postponing the issue several times, the European Commission is expected to adopt a draft regulation on Wednesday 14 October 2009 on inheritance to make it easier to execute wills for Europeans involving more than one country. Initially designed to ensure better protection for beneficiaries by avoiding complex procedures, the draft legislation will introduce an EU beneficiaries' certificate to allow beneficiaries to proved across the EU their rights to inherit. The legislation will be adopted using the codecision procedure with the European Parliament, and talks will begin under the Swedish Presidency. It is estimated that some 4.5 million wills are executed each year in the EU, some 10% of which involve assets abroad. The value of the international inheritance is estimated at €123 billion a year
The draft regulation foresees that all the assets left in a will should be governed by a single legal system, thereby cutting the risk of contradictory decisions being made by different Member States. In order to enable people to plan their wills better, people living in another EU Member State may decide to place all their assets under the laws of the country where they habitually reside (the default criterion) rather than the country of their nationality. Likewise, a single legal system would have power to settle the will, the legal system where the deceased habitually resided, with the option of changing this to make it the country of his or her nationality if required. The draft law will therefore make it possible to deal with a will in a coherent manner throughout the EU; provide legal certainty as to the applicable law and the competent legal system; avoid having to run cases in separate legal systems and therefore run the risk of contradictory decisions being reached; and ensure mutual recognitions of inheritance decisions and legislation throughout the EU without any further criteria being required for the mutual recognition and execution of legal decisions. The new rules will not harmonise legal rules on inheritance or Member States' ownership laws. In order to reassure Ireland, the new rules will not cover inheritance tax, which will remain a matter for the law of the country in question (fiscal neutrality). Inheritance tax would therefore legally still have to be paid in more than one country. The Commission is planning to publish a report to clarify these issues in 2010. The draft regulation would also introduce an EU inheritance certificate to demonstrate eligibility to administer or execute a will. The certificate would not replace national certificates but would be automatically recognised across the EU. At present, the procedures for probate documents and proving entitlement in another Member State, in order for example to get access to a bank account or cash in a life insurance policy, can be very lengthy, costly and often puts people off. They often require not only the official translation and certification of a range of documents but also require proof of the content of the law on wills and one's eligibility to inherit. The new certificate should simplify and speed up the procedures and thereby cut costs.
To reassure the United Kingdom, which has been trying to ensure the new rules are not too detrimental to it, the Commission has made several changes to its initial proposal. Firstly, the draft regulation states that gifts while people are still alive can become irrevocable once the testator confirms their validity by choosing the law that shall apply to the will. Under English and Welsh law, gifts made in a person's lifetime cannot be challenged at a later date. Likewise, the concept of 'legal system' used in the regulation is interpreted widely so that it will enable notaries (under Napoleonic law) and solicitors (under Anglo-Saxon law) to settle cross-border inheritance issues. Despite these concessions, the UK may will be reluctant to agree to the draft rules. The question of country of habitual residence of the deceased would cause problems in the UK, for example, because it prefers the Anglo-Saxon concept of where one is domiciled, but the Commission says this is too similar to the idea of 'nationality' set out in the draft legislation. If the UK and Ireland are not happy with the draft rules, then they could opt out under the Lisbon Treaty. (B.C. trans fl)