The EU Succession Regulation (EU Regulation 650/2012, also known as the Brussels IV) governs cross-border issues of succession within the European Union.
It aims to simplify cross border inheritance where multiple succession laws apply and resolve complex conflict of laws issues among European Union member states. It also seeks to streamline the law of succession across the European Union. In addition, Brussels IV aims to remove obstacles to the free movement of persons in relation to cross-border estates, to allow EU citizens to organise succession matters in advance and to effectively guarantee the rights of beneficiaries and of other persons who are close to the deceased and creditors. Such rules are increasingly necessary as European Union citizens take advantage of their free movement rights and choose to live and work in countries other than their place of birth.
Brussels IV entered into force on 17 August 2015 and applies to the estates of individuals who die on or after this date. Although the UK, Ireland and Denmark opted out, it is still relevant to any residents of these member states who own assets in any other EU member state, including Cyprus.
Basic definitions
Under the Brussels IV, succession is meant as the transfer upon death of the estate — rights and obligations — of the deceased. Rights can be, for example, the ownership of a house, a vehicle or a bank account; obligations can include debts, for example. By contrast, a cross-border (or international) succession is a succession with elements from different countries: for example, the deceased lived in a country other than that of his/her origin, the heirs of the deceased live in a different country or the deceased owned assets in several countries.
Applicability
Brussels IV applies to succession to the estates of deceased persons (Article 1). The term “succession” covers all forms of transfer of assets, rights and obligations by reason of death, whether by testate or intestate succession (Article 3(1)(a)). Matters expressly excluded from the scope of Brussels IV include property rights, interests and assets created or transferred otherwise than by succession (for example, those passing by way of gifts or survivorship, or under pension plans or insurance contracts) and the creation, administration and dissolution of trusts. However, Brussels IV does apply to the devolution of assets and determination of beneficiaries under will trusts and statutory trusts on intestacy (recital 13).
Jurisdiction on succession issues under Brussels IV
The default position is that the court of the member state in which the deceased was habitually resident at the time of death (court of habitual residence) has jurisdiction to rule on all succession matters (Article 4). Thus, the Cypriot courts acquire jurisdiction over foreign assets and similarly other Member States to property located in Cyprus. This contradicts and therefore changes the previously applicable Cypriot regulations on jurisdiction, since until the Regulation such a possibility was not provided for by the Cypriot legal system. However, this general rule can be displaced. If the deceased had chosen the law of his nationality as the applicable law, and that law is the law of a member state, the court of that member state (court of nationality) will have jurisdiction in certain circumstances. This is the case if, for example, the parties to the proceedings have expressly accepted the jurisdiction of the court of nationality.
Furthermore, if the deceased was not habitually resident in any member state at the time of death, the court of a member state in which assets of the estate are located has jurisdiction to rule on all succession matters in certain circumstances. For example, if the deceased was a national of that member state at death, or the deceased had his previous habitual residence in that member state, provided that the change of habitual residence was not more than five years before the court is seised. If no court of a member state has jurisdiction under this rule, the court of a member state in which the assets are located has jurisdiction only to rule on those assets (Article 10).
Applicable law on succession issues under Brussels
According to Article 21 of Brussels IV, the general rule is that the law that applies to succession matters is the law of the state in which the deceased was habitually resident at death. However, this can be changed. If it is clear from all the circumstances of the case that the deceased was manifestly more closely connected at death with another state, the law of that state applies by default instead. Another way to override the general rule is by choice (Article 22). A person can choose the law of any nationality that he has at the time of making the choice or at the time of death to govern succession to his estate as a whole. This choice must be detailed in a written document. Any modification or revocation of the choice must meet formality requirements.
Mutual recognition of judgments in cross-border succession issues
EU laws governing the recognition of a judgment from one EU member state in another EU member state are important in cross-border succession issues because such judgments determine how an asset in Cyprus will be dealt with. Under the same regime, a judgment in one EU country can be enforced in another EU country. For example, if a person is owed money can have the judgment recognised and enforced in the country where the debtor has assets without any intermediary procedure. The above is all made possible largely by the 2001 Brussels Recast (Council Regulation (EC) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters). The Brussels Recast, which applies to judgments in proceedings instituted on or after 10 January 2015, introduced a simplified mechanism for the recognition and enforcement of judgments of courts in EU member states making the enforcement procedure, in principle, less time-consuming and costly. Judgments may be recognised and enforced in other member states without the need to follow special procedures, such as obtaining a declaration of enforceability in the courts of the member state in which enforcement is sought.