A Swiss citizen living in the EU area with assets in various states must take into account the provisions of the EU Inheritance Regulation (and his or her domestic law) when planning his or her estate. In particular, he should be aware of the possibility of a choice of law.
International wealth interdependencies make inheritance planning complex. You want to ensure that your own will as a future testator can actually be implemented.
If, for example, the future testator is a Swiss citizen, lives in France and owns assets in various member states of the European Union (EU) as well as in Switzerland, the following questions arise: The authorities of which state will be responsible for the inheritance (international jurisdiction)? Which legal system will apply at all (applicable law) and is it possible to choose it oneself (choice of law)? The choice of law is of central importance, because the applicable law determines in particular who and how much someone will or can inherit. Depending on the national substantive law of succession, the scope for design varies considerably.
Inheritance planning (estate planning) is complicated by the fact that, in the case of married testators, the first step is to settle the matrimonial property regime, i.e. to dissolve the intertwining of assets according to the rules of the chosen matrimonial property regime. If the spouses also change their place of residence during the marriage, questions also arise regarding international jurisdiction and the applicable law. If there is a point of contact with the EU, the EU Regulation on matrimonial property regimes contains rules on this. In the case of testators who lived in a registered partnership, a corresponding EU regulation also regulates these questions. Only after the matrimonial property regime has been settled can the inheritance regime be settled.
If no international treaty regulates the question of jurisdiction and/or the applicable law, the so-called EU Inheritance Regulation must be observed in the case of points of contact with the European Union.
In principle, according to the EU Inheritance Regulation, the authorities of the EU member state in which the deceased had his last habitual residence are competent. The authorities apply the law of that state. The connecting factor is therefore the habitual residence. It is determined by the deceased’s overall circumstances in the years before death and at the time of death. The duration and regularity of residence in the respective state as well as family, social and professional circumstances play a role. The applicable law need not be the law of an EU member state. If the deceased obviously had a closer connection to a third country at the time of death, this law is applicable. In order to avoid uncertainties in this overall assessment, the testator should urgently choose the law applicable to his or her succession. The EU Inheritance Regulation gives the testator the possibility to choose the law of the state of which he or she is a national at the time of death. A Swiss citizen living in France can therefore also choose Swiss law. Accordingly, multiple citizens have several choices. The choice of law may also affect the jurisdiction of the authorities after death.
If the testator’s last domicile is in Switzerland and he has assets in various EU member states, the situation is different again (this constellation is dealt with in more detail in a separate blog).
Prudent inheritance planning considers various scenarios as to how the will of the future testator can be implemented as well as possible and free of conflicts of jurisdiction. This involves more than just the – supposedly most important – question of who should inherit and how much. Whenever possible, the future testator should make a choice of law. The matrimonial property law or the property law in registered partnerships should not be disregarded.
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