The European Commission has launched an investigation into a new French law which conflicts with European precepts on cross-border successions.

International successions in France are governed by European Succession Regulation 650/2012, which states that the inheritance law that applies in such cases is the country of the deceased. The law is known as 'Brussels IV'.

However, the Regulation also allows an individual, through a Will, to opt for the inheritance laws (but not the taxes) of their nationality.

This is a choice that has been adopted by many international property owners in France to get around French forced heirship laws (réserve héréditaire) which grant children an automatic right to at least part of the estate. It is normally done to give complete protection to the surviving spouse, although it does ultimately result in higher inheritances taxes being payable and it is not the only solution available.

Under the new French law, where the deceased or one of their children is resident in France or Europe at the time of their death no such testamentary freedom is permitted for assets located in France.

The law was introduced to protect Muslim women where Shariah law was to be used, but it has been drafted so widely that it applies to all international successions.

Henceforth, when a deceased person has made gifts and when a foreign law applies to a succession and provides no provision protecting children, then any of the deceased’s children or heirs or beneficiaries are entitled to claim a prélèvement compensatoire on assets located in France on the day of the death.

So, for example, when a succession is governed by a law in the USA and the deceased made a Will for their estate to pass entirely to their surviving spouse, their child who has their habitual residence in an EU Member State would be entitled to claim a compensation on assets located in France.

Similarly, if the deceased and their entire family are English nationals and reside in England, no child will be able to invoke the right of exclusion, even though property is located in France. On the other hand, if one of the children resides in Germany at the time of the death, the right to levy operates.

Specifically, Article 24 of the Loi 2021-1109 du 24-8-2021 states:

'Where the deceased or at least one of his children is, at the time of death, a national of a Member State of the European Union or is ordinarily resident there and where the foreign law applicable to the succession does not allow any reserved mechanism for the protection of children, each child or his heirs or successors in love may make a compensatory levy (prélèvement compensatoire) on existing property situated in France on the day of death, so as to be restored in the reserved rights granted to them by French law, within the limits thereof”

The law also imposes a legal obligation on notaires to examine all cases where the succession rules in France are not to be applied to provide disenfranchised beneficiaries the right to obtain their rights. To this end it states:

“Where the notary finds, during the settlement of the succession, that the reserved rights of an heir are likely to be affected by the gifts made by the deceased, he shall inform each heir concerned and known, individually and, where appropriate, before any division, of his right to request the reduction of gifts which exceed the available proportion”

However, the law does not require that French law is imposed; it merely requires that children of the deceased be advised of their right of compensation if French law it not adopted.

The law is operative from 1st November for all deaths since this date. Accordingly, even if you elected for the law of your nationality before this date, it will be set aside by the new law if it conflicts with the réserve héréditaire. Nevertheless, the law also provides that where the law of your nationality provides protection for children then the French law does not apply where you decide to opt for the law of your nationality.  Thus, even though your national law may provide a lower level of protection than French law, the law of your nationality applies. 

Matthew Cameron, of French property solicitors Heslop and Platt comments that: “This obligation on French notaires is likely to render the administration of a French estate even more burdensome, as they may require a full genealogist’s report on any relevant succession. This would increase the cost of the process, as well as the time it takes”.

During its passage through the French parliament, the proposed law was hotly contested, with a committee in the Senate stating that: "the article seems to miss the objective that the Government has set itself ("to put an end to the application of foreign inheritance rules on our territory that harm women") and could have significant side effects that have not been assessed, including with certainty all countries under Anglo-Saxon law. It is based on a position of principle whose actual benefit for women is also very uncertain".

Surprisingly, however, as part of the legislative process the Constitutional Court in France was not asked to give a judgement on it, so it passed through without a review.

Since publication of the law the European Commission has received complaints from legal practitioners and affected families to the extent that they have now launched an investigation. A spokesperson for the Commission advised us that: “The Commission is aware of the adoption of this French law and is examining its compatibility with the EU Succession Regulation (Regulation No 650/2012).”

Legal practitioners in France and those outside of France dealing in cross-border successions are clear that the new law conflicts with European law and that it will need to be repealed.

However, that might not be before the European Commission demands a change in the law, or it is imposed by a ruling in the European Court of Justice. In either case, it could be several years before there is a change, although cases are likely to brought in the French courts before too long.

Not only is the law clearly at odds with European law, which is supreme, but critics have questioned its practicality. David Boulanger a notaire in north-east France in a published note has stated that: "Over and above the fundamental dangers posed by this new rule, we can be concerned about the practical difficulties of implementation that it will create particularly for notaries. We will also note the lack of interest that our legislator has in the opinions of practitioners."

Angélique Devaux a notaire in Paris who is a specialist international successions has also commented publicly stating that: "The settlement of international successions will become more complex in France," as a result of which "it will now be necessary to review any estate planning in an international context."

One of those difficulties just might be how notaires and the courts are going to come to a judgement about the status of inheritance laws in other countries. Thus, although there may well be testamentary freedom in the UK, family law provisions allow relatives of the deceased who are injured in the succession to bring an action before the English courts to show that they were financially dependent on the deceased and to obtain a reasonable share of the estate. So does that mean that UK law makes sufficient provision for children? Who knows!