New EU rules affecting how families pass on assets they own in the EU in their wills come into force today.

The EU Succession Regulation could be particularly important for UK families with holiday homes in the EU or for those with parents and grandparents living in the EU, according to STEP.

It has the potential to affect the estates of any individuals with any connection to any EU Member State in which the Succession Regulation has direct application.

The UK has opted out of the EU Succession Regulation, but British owners of holiday homes in EU member states such as France have been advised to update their wills and draw up French ones to avoid the country's forced heirship rules.

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George Hodgson, deputy chief executive of STEP, said: “Many European countries have so-called ‘forced heirship’ rules, where the law lays down precisely how someone’s assets have to be passed on within the family after death.

“At present, for example, a UK family with a holiday home in France has very limited options as to how that can be passed on through the family. The new regulations change that, and should be a prompt to everyone with EU assets to review their inheritance plans.”

Mr Hodgson cautioned that the new rules are complex, but even though the UK itself has opted out of the Succession Regulation, they still give potentially valuable new rights to those with property or other assets in the EU.

STEP provided the following example of how the rule change works:

Clare is a British citizen who is resident in England but has a French holiday home she uses a few weeks each year. French forced heirship rules would oblige her to leave her holiday home to her husband and children, with clear rules as to how it would be divided. She would like instead to leave it to her brother, since it was bought with money from their grandparents.

At present the law governing who receives the French house on Clare’s death is generally French law. For a death after 17 August 2015, this need no longer be the case.
The new regulations say that someone can generally choose the law applicable to their inheritance.

This can either be the law applying where the deceased had their ‘habitual residence’ at the time of death, or the law of the state of nationality at the time of making the choice, or at the time of death.

As a British citizen, therefore, after 17 August 2015 Clare can opt to have her French holiday home treated under English law and leave it to her brother.