So, the Euros are about to literally kick-off with Scotland in the opener… no Scotland, no party after all. It naturally means we must consider some European (and international) aspects of succession planning.
There are, for us, four critical points to consider when dealing with succession across borders. Domicile, land and buildings, will validity and the EU Succession Regulation. We also mentions a newer charities point.
Domicile
Very broadly, domicile is the country to which you are most legally connected. You start off with a domicile of origin but that might change. You must ‘lose’ that original domicile for a new one to be acquired.
Many legal points flow from domicile (or similar other concepts used in some countries). It will affect the validity of wills and decide which law governs succession to, at least, your moveable estate. Moveable estate being essentially all assets apart from land and buildings. We will return to land and buildings in a moment.
Domicile can also have an important role in the application of any forced heirship systems that determine that certain parts of an estate must go to certain family members irrespective of the terms of a will. One to watch.
For more on domicile (via Rod Stewart) click here.
Land and buildings
We just mentioned the role of domicile in succession to moveable assets. For many, many countries the law of the jurisdiction in which any land and buildings is physically situated will govern succession to such land and buildings. (We do English but those that like Latin call that the lex situs.) This role of that country’s law in personal estate planning with that foreign situated asset needs to be considered.
It means one might need a will in that other country. There might be forced heirship that applies to land to factor into thoughts and planning. The process and administration to transfer title following death requires attention. Getting good and reliable local advice that connects with your Scottish estate planning is the critical step to get this right. We can help on that to make the right connections to help create a coordinated international succession strategy.
Where do I sign up? Validity of wills
Domicile, habitual residence, the assets involved and physical location at the time of making a will can all affect how a will is validly signed. Getting a will validly signed is of critical importance. And might not always be straightforward as to what are the necessary signing requirements. Again, the right advice is important and can be the difference between a will that ‘works’ and one that is entirely ineffective and invalid.
Even after Brexit… the EU Succession Regulation
We have talked about this before in more detail (click here) but a reminder now about the role of the EU Succession Regulation. This can be very useful. It can affect will drafting in Scotland. It can affect the form of any will in the other relevant country. If there are to be two wills, they need to coordinate with each other.
Planning based on the EU Succession Regulation can also have a positive impact on the application of any forced heirship rules. Getting early advice on this can enable a plan to be created and also to be forearmed on how forced heirship regimes might work and interact.
Again, joined up Scottish and foreign advice is needed to navigate this. The way the regulation works can be a very useful. It can be critical to smooth succession and ensuring the ‘right’ people inherit your estate.
Charities and charitable bequests
New applications for charity tax recognition from 15 March 2023 must have met a new definition. The new definition would affect some legal drafting in documentation for charities. It should also serve as a reminder in charity and succession drafting that the tax definition of ‘charity’ and ‘charitable’ is critical.
These rules mean that donations to non-UK charities no longer benefit from tax reliefs after 5 April 2024. There had been transitional rules applicable up to that point.
For help on international succession and charities issues, get in touch with Alan Eccles: alaneccles@bkf.co.uk / 07359001038.
Alan is the Scottish author for the textbook, International Succession.
“Alan is a caring and empathetic private client solicitor who is dedicated to providing the best outcomes for clients. He has the technical knowledge and professionalism to meet client needs.” “Alan is a very articulate individual who is clearly an expert in his field.” Chambers High Net Worth 2023 directory
“Alan is a professional, dedicated and passionate private client lawyer.” Another interviewee enthuses: “Alan has excellent experience and technical knowledge, and he is very generous with his time.” Chambers High Net Worth 2022 directory
“Alan is highly experienced in advising third sector organisations on governance and constitutional issues, including charity establishment and modernisation… He blends excellent technical advice with both pragmatism and plain communication.” Chambers and Partners 2023
Scottish charity and wealth law 