Property lawyers in Spain

viernes, 8 de mayo de 2015

The New European Inheritance Regulation




The new regulation about succession is going to be in force on August 2015, there are questions to take into account in order to arrange the inheritance processes since then.


1. Implementation of the European Rules of Inheritance.
2. Habitual residence. Determination.
3. How does the legal operator determines the habitual residence?
4. The link manifestly closer
5. Foreign retirees living in Spain whose social circle is limited to its nationals.
6. The habitual residence of the Regulation is NOT the "domicile" Common Law.
7. Choice of applicable law.
8. The Scope of the Applicable law.
9. Eligible Laws.
10. Several nationalities.
11. Form of the election.
12. Amendment or revocation of election law.
13. Capacity and consent of the dispatcher to choose

 



1. Implementation of the European Rules of Succession.



August 17 2015, the Spanish Codigo Civil art. 9.8 that atests: The generally applicable law governing succession with cross-border implications shall be the State in which the deceased had his habitual residence at the time of his death; will be surpased by the content of REGULATION (EU) No 650/2012 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 4 July 2012 that shall apply to the succession of persons who die on August 17, 2015 or after that date.


2. Determination of the habitual residence.

Art.21 Regulation

The European legislator does not establish an independent and autonomous definition of this connection point. Tries to guide the applicator, establishing guidelines that have to take into account in determining the habitual residence. In the Regulation Whereas 23 says:


"In order to determine the habitual residence, the authority dealing with the succession should make an overall assessment of the circumstances of the life of the deceased during the years preceding his death and at the time of his death, taking account of all relevant factual elements, in particular the duration and regularity of the deceased’s presence in the State concerned and the conditions and reasons for that presence. The habitual residence thus determined should reveal a close and stable connection with the State concerned taking into account the specific aims of this Regulation".

There must be physical presence of the deceased in a particular State.


It is not imposed a minimum to be considered "normal" a residence. However, it should be assessed the duration; The Whereas 23 refers to this by saying that "the authority dealing with the succession should take into consideration ... particularly ... .in the duration of the presence of the deceased in the State concerned".


The presence must be stable, Regulation speaks of "habitual residence" and that regularity is marked by the physical link from a person to a State because that State has the center of his interests, it refers to Whereas 23 when says, "the authority dealing with the succession should take into consideration ... particularly ... .in the regularity of the deceased's presence in the State concerned, and the terms" of this presence ... " .

It is to live in a country.

Habitual residence involves a will element that is always present. Therefore, the authority dealing with the succession should take into consideration, in particular, the reasons for this presence.




3. How to determine the habitual residence


What has to do the legal operator to determine the habitual residence of the deceased in a succession with cross-border implications?

First of all, he will need to make an overall assessment about the circumstances of the deceased life.

2nd. When? During the years preceding the death and at the very time that occurs.

 3rd. What to consider? The duration and regularity of the deceased's presence in the State concerned, and the conditions and reasons for that presence.

The habitual residence thus determined should reveal a close and stable link with the State concerned.

 The European legislator, knowing that these guidelines are not sufficient to solve complex cases, provides, as an example, Whereas 24, an accurate answer to certain issues, As is the case of:

Example One.- The deceased for professional or economic reasons moves his residence to another country to work there, sometimes for a long time, but maintains a close and stable link to his State of origin. In this case, depending on the circumstances, it might be considered that the deceased had his habitual residence in his State of origin, which was located the center of interest of his family and his social life.

For instance, the case of a Spanish national that moves abroad for working reasons and leaves his  family, friends and social life in Spain.

In this case, depending on the circumstances, it could be considered that he has his habitual residence in his country of origin (Spain); in this example, we deduce an important fact: the Regulation prioritizes the family and social interest over the professional or economic.

Example Two.- The deceased has lived in several States alternately or traveled from one State to another without settling permanently in any of them. If the deceased was a national of one of those States or had all his main assets in one of them, the nationality or the location of those assets could be a special factor in the overall assessment of the all objective circumstances.

Here is possible fit the common case of people that spend some time in a country and partly in another; foreign retirees that basically divide the year between his country and Spain. In these cases some special factors, as nationality, status of their assets and nature of them, may be taken into account.

It's necessary make a general evaluation of the circumstances of the life of the deceased.







4. The Link manifestly closer



The Art.21.2 : "Where, by way of exception, it is clear from all the circumstances of the case that, at the time of death, the deceased was manifestly more closely connected with a State other than the State whose law would be applicable under paragraph 1 (HABITUAL RESIDENCE), the law applicable to the succession shall be the law of that other State."  This can not be applied when determining the habitual residence is complex. Neither can be applied when the deceased had chosen the law regulating the succession (Article 22.1 Regulation).

After determining the habitual residence, in clearly exceptional cases, we will decide whether there is a more binding law.

Whereas 25 gives us an example: A decedent who has changed the State of habitual residence shortly before his death. In such a case all the circumstances indicate that the deceased had a manifestly closer connection with another State, which will normally be the State of origin.

Stay with the key words of Article 21.2 Regulation: exceptionally, clearly resulted from all the circumstances that, at the time of death the deceased kept a manifestly closer connection with a State other than the State whose law would be applicable under the Art 21.1 (HABITUAL RESIDENCE), the law applicable to the succession will be the other State law.




5. foreign retirees living in Spain whose social circle is limited to their nationals.


The connection point of which the Regulation talks about is the state (territory) in which the deceased had his habitual residence at the time of death; what matters is the state where the deceased has his life centered, even though his social circle is limited to nationals of his home country.

For example, an English resident in the Canary Islands, although not Spanish speaker and relates almost exclusively to nationals of his country, even keeping intact his customs and buys and eats in establishments run by britishers ... He has habitual residence in Spain.



6. Habitual Residence (European Regulation) vs "domicile" (Common Law). 


The domicile of origin in the UK, is a strong bond that unites the person with the legal system of a State or of a territorial unit within a State; To break this bond and be replaced by a domicile of choice, it is necessary that the person make of the residence in the new country his only or main residence, with the intention that this is permanent or indefinite residence; It must be proved the free and clear intention of not returning. Therefore, a British can have his habitual residence in Spain and preserve his original domicile in England, Scotland, Wales or Northern Ireland. There is a strong presumption of conservation of the old domicile in case of doubt of which is the domicile of the deceased. [In Agulian vs Cyganik 2006]

The Whereas 32  of the Regulation warned that when the concept of "nationality" is used to determine the applicable law should take into account the fact that certain States whose legal systems are based on common law use the concept of "home" (domicile) and not "nationality" as a criterion for equivalent link on succession.



7. Choice of applicable law. 


The regulation allows the choice of the law applicable to the whole succession.


 "Article 22. Choice of law1.   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.A person possessing multiple nationalities may choose the law of any of the States whose nationality he possesses at the time of making the choice or at the time of death.2.   The choice shall be made expressly in a declaration in the form of a disposition of property upon death or shall be demonstrated by the terms of such a disposition.3.   The substantive validity of the act whereby the choice of law was made shall be governed by the chosen law.4.   Any modification or revocation of the choice of law shall meet the requirements as to form for the modification or revocation of a disposition of property upon death.".



8. The Scope of the applicable Law


Article 20 establishes the universality of the applicable law. The law specified by the regulation applies even if not that of a Member State; This is applicable to the succession of persons who die on August 17, 2015 or after that date.
Regulation introduces a universal rule in case of conflict of laws, it is applicable to all successions with cross-border implications, whatever the nationality, domicile, residence or location of the assets.

It is possible to choose the law of a third State. A person resident in a member State of the Regulation may choose the his own national law to be applied to his whole succession even though it is a non-Member State .




9. Eligible Laws. 


Article 22 of the Regulation states that any person may choose as the governing law of all the succession, the law of the State whose nationality he possesses at the time of making the choice or at the time of death, and the chosen law will govern the whole succession; in particular the matters listed in Article 23, among them highlights the determination of the beneficiaries, of their respective shares and of the obligations which may be imposed on them by the deceased, and the determination of other succession rights, including the succession rights of the surviving spouse or partner;



10. Several nationalities. 


A person possessing multiple nationalities may choose the law of any State whose nationality he possesses. The person has his "operational" nationalities for these purposes. The determination of nationality or multiple nationality of a person should be resolved as a preliminary question.

The issue of considering a person as a national of a State falls outside the scope of the Regulation and is subject to national legislation including, where applicable, international Treaties, in full respect of the general principles of the European Union.

If the deceased choose the law of the State whose nationality he possesses at the time of granting the will, the choice remains valid even if the deceased changed his nationality later.



11. Form of the election. 


The number 2 of art. 22 adds that the choice should be made expressly in a will or be demonstrated by the terms of the content of the will itself.

We find the following possibilities:

That the election is made expressly, by inserting in the will something similar to this clause: "This provision is perfectly feasible under the Nationality Law (can be specified within the nationality, the domicile of origin civil) of the testator that is chosen as the one governing the whole of the succession, whatever the nature of the goods and the country where they are "

The election is tacit, that is, resulting from the terms of the will,  as in case of a grantor is making use of a particular institution of a specific law, one legal speciality typical of one single national law. All these data could be considered sufficient to understand that the will of the deceased was use one specific regulation for his succession, which would entail the full effectiveness of the provisions of the testator.




12. Amendment or revocation of election law.


Any modification or revocation of the chosen law shall meet the formal requirements for the modification or revocation of a disposition of property upon death.

Generally, the choice of law clause is inserted into the Will; however, changing the content of the will deciding issues as the distribution of the assets don't implies changing the chosen law. So, it must be carefully treated when there are several successive wills.




13. Capacity and consent of the testator to choose 


The chosen national law is covering the entire succession.  The choice of law made under the new Regulation is valid even if the chosen law does not provide for choice of law in matters of succession.

The fact that the chosen law does not permit such choice is irrelevant. As states the Article 20 of Regulation , the chosen law may be that of a Member State or of a third State.

However, the validity of the act that manifests the choice of law, shall be governed by the chosen law. So, ability and consent will be determined by the chosen law