Owners of holiday homes abroad face post-Brexit estate planning risk

News Article

Overseas property owners may not be able to rely on agreements which currently allow estates spread across multiple jurisdictions to be dealt with under English law, after the UK leaves the EU in two years’ time.

Tim Steele, a Partner with Palmers, who specialises in Wills, Probate and Estate Planning, says concerns are growing, regarding whether the ‘Brussels IV’ regulation will continue after the UK leaves the EU.

Brussels IV is European legislation which determines, on the basis of ‘habitual residence’, the jurisdiction in which a deceased person’s estate will be dealt with. Although it does not apply to property owned in the UK, Ireland and Denmark, it will affect anyone in the UK who has bought property in another EU country.

Tim Steele explained: “Currently, if a person is normally resident in the UK but, for example, owns a second home in France, that property can be dealt with under English law following their death, providing their Will makes it clear which legal jurisdiction is elected.

“However, it remains to be seen how Brussels IV will operate in respect of UK residents following Brexit, and people who own second homes abroad may find that this element of their estate will be dealt with under local laws, which sometimes include ‘forced heirship’ provisions.

“Preparing Wills in two different jurisdictions might be the only solution, although it has to be done carefully as it risks unintentionally revoking the Will made in the UK.”

Estimates from the European Commission suggest that around 450,000 cross-border successions take place across the EU annually and these are worth a combined €120 billion.

Tim continued: “As part of the Brexit negotiations, we hope a satisfactory agreement will be reached which will allay the fears of many who own homes abroad and find themselves affected.

“I would encourage anyone who is concerned to seek specialist legal advice.”

For help with drafting Wills and estate planning including cross-border legal issues, please contact us.