International Succession (fifth edition)

J.H.C Morris QC, in the preface to the first edition of The Conflict of Laws, wrote: ‘Law books are like babies: they are the greatest fun to conceive but very laborious to deliver’.

The 5th edition of International Succession was no doubt also fun to conceive, but in gathering together such a wide range of international perspectives, the editors must have been particularly stretched to compile this wealth of material. It covers numerous jurisdictions, ranging from the Russian Federation to Indonesia, along with chapters on each of the EU member countries, various states in the US and, perhaps with offshore lawyers in mind, the British Virgin Islands, among other offshore jurisdictions.

A distinguished lawyer practising in the relevant jurisdiction contributes to each chapter. This in itself makes the book well worth acquiring because it enables the busy practitioner to instantly reach out to an appropriately qualified specialist in a particular jurisdiction, should the need arise.

I have frequently advised on issues appertaining to the validity and recognition of foreign wills in this jurisdiction. It would no doubt surprise an English solicitor that many jurisdictions require far less formality than is required in England when determining the validity of a will. For example, in Liechtenstein (pictured above), a jurisdiction I have frequently interacted with, a holograph will can be executed without witnesses and does not even need to be dated. It does however need to be signed by the testator. An allographic will in Liechtenstein can be written by a third party but the testator must sign the will in front of three witnesses; however only two of the witnesses must be present at the same time. Liechtenstein also provides for emergency wills to be drawn up provided that the testator is at least 14 years old and that the will is witnessed by two witnesses. If there is ‘danger of contagion’ the witnesses do not need to be present at the same time. A Liechtenstein emergency will only endures for three months.

Contributors answer a similar set of questions in each case to ensure that all issues are tackled for each jurisdiction. This work is an invaluable reference source for those advising on matters of international succession, especially where cross-border issues need to be determined.

Practitioners will appreciate the complexities that arise in merely interpreting an English will. A myriad of possibilities needs to be factored in when considering a will valid in a different jurisdiction that affects assets in England and Wales, bearing in mind that the will may be in a foreign language. The questionnaires in this new edition have been expanded to encompass the effect of mutual wills, challenges to decisions taken in estate administration, and interaction between trusts and forced heirship.

The gulf between wills executed in common law jurisdictions and those in civil law jurisdictions is significant. Common law jurisdictions permit the testator more or less freedom when determining the contents of his or her will. Those civil law jurisdictions following effectively the Code Napoléon take an extremely different approach to both probate procedures and vesting of title on death. Civil law jurisdictions require compliance with strict forced heirship rules.

To further complicate matters, there are also issues concerning private foundations and their impact on estates. Liechtenstein and Austria are two ‘classic’ private foundation jurisdictions. The Austrian civil code, in force since January 1812 (Allgemeines Bürgerliches Gesetzbuch, ABGB), still broadly governs forced heirship rules. The forced heirship regime allows the forced heirs (the founder’s spouse and children) to set aside some of the gifts made by the deceased during his or her lifetime. This may also apply to a disposition of assets to a private foundation.

It may surprise people to know that the Channel Islands are effectively civil law jurisdictions because their primary source of law is Norman customary law. They also rely on a forced heirship system (légitime). To confuse matters further, the relevant provisions under Jersey and Guernsey foundation law correspond to the approach followed in common law private foundation jurisdictions.

In Panama, unlike in most civil law jurisdictions, there are no forced heirship rules in its civil law code. There is an effective ‘firewall’ around the foundation’s assets preventing the application of any forced heirship rules and the enforcement of any claims brought on the grounds of a personal relationship to the founder or beneficiary.

Panama also recognises the concept of a nuncupative will, also known as an open will. A nuncupative will must be executed before a notary public, and three qualifying witnesses who understand the language of the testator/trix, but surprisingly only one of them must be able to read and write. The testator/trix will indicate to the notary and the witnesses that this is his/her last will. Upon termination of the act, it must be read to the testator/trix so that he or she may confirm they agree with it. It is then signed by the testator/trix and the witnesses. Panama recognises a ‘mystic’ will, which is a closed last will and testament that may be handwritten by the testator or by another person on his/her behalf. The provisions of the will are kept secret until after the testator’s demise.

The section on wills in England and Wales is admirably dealt with and includes a succinct but helpful summary of the Inheritance (Provision for Family and Dependants) Act 1975 as amended. The act sets out the court’s powers and the matters to which the court should have regard when exercising its discretion. It is pointed out that the limitation period for claiming pursuant to the act is short (six months from the date at which a grant on the estate is first taken out), unless the court grants permission to extend the time to make such a claim.

It is the domicile of the deceased at the date of his death that governs the devolution of his or her estate in England. It is the domicile of the deceased that also triggers UK inheritance tax rather than the domicile of the beneficiaries. The determination of a deceased’s domicile can have very significant tax consequences. In the context of a recent instruction, I successfully persuaded HMRC that the deceased had abandoned his domicile of origin in England and had subsequently acquired a domicile of choice in Austria. Austria abolished inheritance tax for deaths occurring after 31 July 2008. Accordingly, as a result of my research into the deceased’s lifestyle, their estate was not liable to pay any inheritance tax in either the UK or Austria. This case illustrates the importance of works such as International Succession.

I would recommend this book to any practitioner with an international client base, and in particular to lawyers who may require an expert witness or expert opinion on issues appertaining to foreign succession law.

Stephen D. Sutton is principal at Suttons Solicitors & International Lawyers, London