European Certificate of Succession in France
Thursday 03 December 2015
The French government have published a decree to bring into operation in France the European Certificate of Succession.
Since last August a new legal and administrative framework applies to successions in Europe, with the estate of all decedents now operating under a single European law.
The aim of the new law is to make the whole process simpler, quicker and easier. It is also to be hoped that it will also make it more secure as only one jurisdiction will apply.
Previously, individuals could be subject to inheritance laws in more than one country, leading to substantial delays and confusion in winding up an estate.
Although the original aim of the new regulations was to deal with 'cross-border' successions (where individuals had assets in more than one country), in practice the scope is broader, encompassing all successions.
In essence the new regulation provides that the "law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death.”
That being the case, a person who is habitually resident in France will have their worldwide estate administered by the inheritance laws applicable in France.
However, the law also provides that "a person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death.”
Accordingly, whether or not an expatriate living in France has assets outside of the country, they can elect that their inheritance be governed by the rules of their native country. This would enable an expatriate in France to escape French forced heirship rules.
This applies even though that person may not be a European national. So, in theory, an Australian living in France can elect for the laws of their nationality to apply to their inheritance.
The position of second home owners from the UK (as well as Denmark and Ireland) with property in France is a matter of some debate in legal circles, as these countries have opted out of signing up to the agreement. The legal advice we have received is that, whilst it is entirely possible they might be able to use the new law, it is too early to be definitive on the issue.
The new legal framework leaves untouched the fiscal arrangements, which remain the prerogative of the country where the person is habitually resident.
So although the new legal framework offers testamentary freedom, it comes at a price, for if you wish to leave assets outside of your immediate family your inheritors could face a substantial inheritance tax bill. There are also limits in France on just how much you can leave a family member before they become liable to inheritance tax.
To give effect to the new provisions the regulations introduce a supranational 'European Certificate of Succession' (ECS).
This certificate is designed to enable heirs, legatees, executors or administrators to prove their legal status and/or rights in any country.
The decree now published by the French government gives operational effect to this new certificate, with the role of administration granted to the notaires, who are the only persons authorised to issue one.
The decree also reaffirms that the notaires are responsible for processing the estate of those with assets in France with a certificate issued by a relevant authority outside of France.
The government have even stipulated the fee payable, which will be the sum of €117.
Where there is a dispute about the content of the certificate the decree gives power to the French courts to adjudicate on the matter.
The certificate does not replace the need for a Will or other inheritance planning steps to be taken; it merely serves as proof of the distribution of the estate and how it will be administered.
The document can also be used for those estates which are intestate, and where therefore the habitual residence rule will be applied.
If you wish to make use of the right to opt out of being obliged to adopt French inheritance laws you need to make a Will.
Once issued, the ECS is recognised by all Member States without the need for further formality, although it will still be necessary to undertake the normal conveyance of real estate to the heirs.
However, the certificate is not mandatory, so if you consider you have adequate other means to prove your inheritance or rights of administration then you can dispense with the form.
In addition, the certificate has no validity in non-Member states outside of the EU, who may choose to ignore it. In the case of the UK, a grant of probate will still be necessary for UK assets.
You can read more in our FREE Guide to Inheritance Laws and Taxes in France