UK nationals with cross-border estates often require careful succession planning. Estate planning is particularly important with assets in countries such as France, which applies forced heirship rules on death.
French law dictates that children are entitled to a share of any French property owned by the deceased, even if there is a surviving spouse. Conversely, under English law (if applicable), the testator would have testamentary freedom to choose to whom their personal death estate will devolve.
Introduced in 2015, the European Succession Regulation (the Regulation) sought to simplify matters. Broadly, it enables UK nationals to elect that English law (or the law of their nationality/habitual residence) should apply to the administration of their death estates.
While the UK has left the EU, the Regulation remains relevant for UK nationals living in the EU, as well as those living in the UK with assets in the EU.
However, French law introduced Article 913 of the Civil Code (the "Code") in November 2021. Article 913 overrides the Regulation so that heirs who do not inherit what they expect to under the forced heirship regime in France – due to the Regulation, or otherwise – are entitled to compensation for their disinherited share.
The Code applies where French property forms part of the estate and either:
- The deceased was habitually resident in the EU, or an EU national; or
- At least one child of the deceased is habitually resident in the EU, or an EU national.
This means, if the deceased and their children are all UK nationals living in the UK, the Regulation continues to apply. By contrast if the deceased lived in France or another EU member state, or even lived in the UK but their UK national child lives in the EU, then the Code applies – making forced heirship applicable instead.
The Code runs counter to the Regulation. It is therefore likely to be challenged, but unless and until a successful challenge is mounted, UK nationals who live in the EU and own French property should be wary of the Code and its implications in relation to estate planning.