Law Times

Page 10 OctOber 26, 2015 • Law times www.lawtimesnews.com FOCUS Lawyers taking note of new EU succession rules BY JUDY VAN RHIJN For Law Times anadians with ties to the European Union are taking note of their ability to choose the law that will govern their estate litigation following the implementation of new succes- sion regulations in most coun- tries there. The succession regulations are an effort to simplify suc- cession conf licts between Eu- ropean member states, includ- ing disparate forced-heirship schemes. "The new regulation tries to resolve some issues in cross-border inheritance cases," says Matthias Duensing, a To- ronto lawyer who has clients who share his German back- ground. "They are trying to unify the concepts of laws in the member states so there is only one succession law that applies. Under the regulation, the law of the last habitual residence is applicable unless the testa- tor makes a choice of law. Such choice of law is restricted to the nationality of the testator." Eric Polten of Polten & Asso- ciates in Toronto says the regu- lation came into force in 2012 but it only applies where death occurs after Aug. 17, 2015. "It applies to all 28 countries ex- cept the United Kingdom and the Republic of Ireland, which have opted out for the moment, and Denmark, which has opted out permanently. The interest- ing thing for Canadians is that, although we are not signatories, they will apply it to us." Sébastien Desmarais of Tierney Stauffer LLP in Ottawa believes the regulation will be particularly relevant to Cana- dian nationals residing in a Eu- ropean member state and those who own immovable assets situ- ated there. "We lawyers with clients with assets in the European Union have a duty to inform ourselves of this regulation and possibly take advantage of it. It's a good thing that the law of one juris- diction will apply to an estate." Polten speaks of the problems he and his colleagues encoun- ter almost daily. "When a client has assets in more jurisdictions than one, it's unclear whether the other jurisdiction will accept the will. Having specific provisions that say it should accept it will be advantageous when the will is probated. It avoids litigation and increases certainty." Duensing notes a Canadian will need to specify the law of the particular province that will apply. He expects Canadians will use the new regulation to try to avoid the forced-heirship rules. "In a lot of European countries, a child or spouse has a right to a certain share of the estate and you can't contract out of that. Forced heirship re- ally handcuffs you in terms of who you leave your property to. For example, in Spain, your children get a two-thirds share. This is completely in contradic- tion with the ability to provide it to whoever you wish subject to dependants." He's quick to warn of the downside of this election. "The choice of law does not equal a choice of court. People can make an agreement on the choice of court but it only ap- plies to courts within the Eu- ropean Union. Even if the last habitual residence is in Canada but the assets are in the member state, it can claim jurisdiction." Desmarais confirms that any dispute will still proceed in the European Union but the court will apply the other law. "This was drafted to facilitate succes- sion within EU countries, which are all civil law systems. If a Ca- nadian chooses Canadian law, then you have a scenario where the member state is applying Canadian law. They don't have any experience in common law; they don't know the juris- prudence. There are additional expenses for legal opinions and experts and you don't know if they will decide it the same way. With a civil law background, they could understand the con- cepts differently." The choice of law doesn't affect the taxation of estates, and many European countries have an inheritance tax. It also doesn't alter the procedure for dealing with property, includ- ing the relevant forms. "Some states require certain forms with respect to immovables," says Duensing. "The regulation does not affect the regulation of property rights." Duensing also raises the possibility that countries with forced heirship might find it ab- horrent to avoid the obligations. "The regulation provides that a court can decline to apply the provisions of the law of a foreign country if they are averse to pub- lic policy," says Duensing. "We don't know whether the courts will say it's against public policy not to have forced heirship." Desmarais believes the draft- ers of the regulation recognized that not all jurisdictions have those provisions and expects rulings on public-policy issues to be more in line with the Ca- nadian understanding of such matters. Until the jurisprudence unfolds, Desmarais believes clear drafting is the best prepa- ration. "The key is to have docu- ments drafted properly so that someone who reads the will, who is in a position to interpret it, can interpret it." He hopes the regulation will end the practice of needing a will in each jurisdiction where property is situated. "I think if lawyers draft the will properly, you should be able to accomplish having the immovable pass according to the will and Canadian law. Two wills may no longer be neces- sary." Polten believes the tradi- tional approach to solving cross-border problems could continue. "It's not inconsistent with the regulation, but there is substantially less need," he says. He points out that while On- tario has a specific provision, the use of multiple wills hasn't gained complete acceptance even in Canada. "For provinces that haven't followed suit, the problem is solved by the regu- lation. This is important with increased mobility between Ca- nadian provinces." In the meantime, Duensing continues to recommend that people have a will for each coun- try. "There are so many uncer- tainties. We don't know how it will develop. This might change in a few years when it is clearer how the regulation is dealt with by the courts." LT and it's available to you 24 hours a day. s available y availabl y legal expertise? Looking for Find exactly what you need at www.CanadianLawList.com Starting a business, making a will or buying a house? Declaring bankruptcy, dealing with a personal injury, insurance claim or job loss? If you're in the midst of one of life's big events, help is as close as your smartphone, tablet or computer. Simply go to www.CanadianLawList.com to find the right lawyer for your particular legal need. www.CanadianLawList.com is Canada's most comprehensive online directory of lawyers and law firms. And it's easy to use! You can search by city, legal specialty, or name for listings and contact information. Find the legal expertise you need at www.CanadianLawList.com. Untitled-5 1 2015-10-20 2:39 PM Whether the issue is competing claims to maritime resources, navigational freedoms, or coastal waters jurisdiction, you'll find the most up-to-date information explained in a geopolitical context in International Law of the Sea. For the first time, all types of States are compared and discussed in one place - land-locked, geographically disadvantaged, transit, archipelagic, coastal, and island States. This comprehensive work provides you with: • Detailed and expert analysis of all key principles and legal concepts relating to international maritime boundaries, the use and access to international waters, and the resources therein • A thorough overview of the mechanisms available to settle maritime disputes • Case law with references to all necessary international treaties, conventions and International Court decisions on the topic over the last 300 plus years Detailed maps and tables illustrate complex and particular boundary issues and claims throughout the world. New Publication International Law of the Sea Georges Labrecque Available risk-free for 30 days Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # 986706-65203 $305 Hardcover 620 pages October 2015 978-0-7798-6706-6 Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. 00233EV-A51319 Get fully briefed on current international law of the sea C

• Cover