The EU Succession Regulation

Habitual residence, not nationality and not location

Where you were living when you died decides which country's law governs the estate, not where the assets sit and not what passport you held. Article 21 sets the general rule: unless the Regulation provides otherwise, the law applicable to the succession as a whole is the law of the State in which the deceased had his habitual residence at the time of death.

Two words in that sentence do most of the work. As a whole means one law governs the entire estate rather than the estate being split between the laws of each country where an asset happens to sit. Habitual residence is a factual question about where a person's life was actually centred, not a matter of registration, and it is capable of being genuinely uncertain for someone who divided their year between two countries.

Article 4 deals with jurisdiction on the same basis: the courts of the Member State in which the deceased had his habitual residence at the time of death have jurisdiction to rule on the succession as a whole.

A British couple who retired to Paphos twenty years ago may well be habitually resident in Cyprus, in which case Cyprus succession law governs their estates by default, including their assets in England.

You may choose the law of your nationality, and it has to be done in the will

You can override that by choosing the law of the country whose nationality you hold. Article 22 allows a person to choose, as the law governing the succession to their estate as a whole, the law of the State whose nationality they possess at the time of making the choice or at the time of death. A person with more than one nationality may choose the law of any of them.

This is the single most useful provision in the Regulation for the firm's clients, and it is useless unless it is exercised. The choice is made in the will. It is not made by filing something, by telling the family, or by intending it. A will drafted without regard to the Regulation, by someone who assumed their national law would apply anyway, is precisely the will that does not make the choice.

It matters in Cyprus for a concrete reason. Under the Wills and Succession Law, Cap. 195, a reserved portion can arise, so that part of the estate is distributed by law whatever the will says. Whether it arises, and in what proportion, depends on which close relatives survive. Choosing the law of a nationality that does not impose a reserved portion, or choosing a law that does when the default would not, changes who inherits. The analysis runs in both directions and it is set out under making a will in Cyprus and wills made abroad and Cyprus property.

The Regulation applies even when the other country is outside the EU

This is the point most often missed, and it is the one that matters most to clients from outside Europe.

Article 20 provides that any law specified by the Regulation is to be applied whether or not it is the law of a Member State. The Regulation is universal in that sense: it is a set of rules that a Cyprus court uses to identify the governing law, and the law it identifies may perfectly well be that of a country that has nothing to do with the European Union.

So an Australian national habitually resident in Cyprus is within the Regulation as applied here, and may choose Australian law under Article 22. An American who dies habitually resident in Cyprus has an estate governed by Cyprus law unless a choice was made. Being a national of a non-member State does not put a person outside the system. It only changes which law the system points to.

The United Kingdom never took part, and that cuts one way only

The United Kingdom and Ireland did not take part in the adoption of the Regulation and are not bound by it, and Denmark likewise did not take part. That is recorded in recitals 82 and 83.

The conclusion many people draw from this is the wrong one. Non participation means the courts of those countries do not apply the Regulation. It does not take a British national outside it when the estate is being dealt with in Cyprus, because Cyprus is bound by the Regulation and a Cyprus court applies it. Read with Article 20, the result is that a Cyprus court uses the Regulation to identify the governing law and may perfectly well identify the law of a part of the United Kingdom.

A British national habitually resident in Cyprus who makes no choice will have Cyprus law applied to the succession, reserved portion included, by a Cyprus court applying an instrument the United Kingdom never joined.

The practical consequence is that the choice under Article 22 deserves more attention from British clients rather than less, and that the two sides of the estate have to be planned together. What a grant obtained in England does and does not achieve here is a separate question, dealt with under administering a Cyprus estate from abroad.

What the governing law actually decides

Article 23 provides that the law determined under the Regulation governs the succession as a whole, and it sets out what that covers. It includes who the beneficiaries are and their shares, the capacity to inherit, the transfer of the assets to the beneficiaries, the powers of executors and administrators, liability for the debts of the estate, and the distribution of the estate.

That is a wide list, and it is worth reading it as an answer to a common assumption. People frequently expect the law where the flat is to decide who gets the flat. Under the Regulation it does not. The governing law decides, and the role of Cyprus procedure is to give effect to that outcome on the register here.

The Regulation also introduced the European Certificate of Succession, a certificate for use by heirs, legatees, executors and administrators who need to invoke their status or exercise their rights in another Member State. It is presumed to demonstrate accurately the elements established under the law applicable to the succession, and it exists to spare families the repetition of the same proof in each country. It operates between Member States, so it does not answer the question of what is required in a country that did not take part.

The work is done while the person is alive

Almost everything the Regulation makes possible has to be arranged in advance. After a death the position is what the documents made it, and the only remaining questions are evidential and procedural.

In practice that means establishing where habitual residence is likely to be found, and being candid about the cases where it is genuinely arguable. It means deciding whether a choice of national law improves or worsens the position, which depends on which relatives survive and on what the chosen law does about forced shares. It means making that choice expressly in the will rather than assuming it. And where there are assets in more than one country, it means one will per jurisdiction, drafted so that they do not revoke each other, which is a drafting trap rather than a theoretical risk.

Where the estate includes Cyprus immovable property, the practical steps that follow a death are set out under estate administration and, for property specifically, under inheriting property in Cyprus from abroad.