European Commission clarifies rules for owners of French houses with English-law wills

To the relief of many who own property in France and hold an English-law will, the European Commission has issued a clarification on the interaction between EU Succession Regulation and the French Civil Code.

Under the EU Succession Regulation, an individual has the right to choose the law of their nationality to govern their succession when they die. Due to the greater flexibility available under English law, many British nationals owning assets in France have elected for English law to apply to their estate, in order to avoid the French forced heirship rules.

However, in 2021, Article 913, paragraph 3 was introduced into the French Civil Code, which instituted a compensatory clawback right.

Deborah Vaysse, Avocat at law firm Furley Page, explains: “The 2021 amendment to the French Civil Code created significant disruption for many British nationals who had made English-law wills, relying on the freedom offered by the EU Succession Regulation. It introduced a mechanism allowing children, in certain circumstances, to claim compensation from French assets where they have been excluded from the will and the foreign law governing the succession does not offer protection comparable to the French forced heirship rules. This left French notaires in the difficult position of having to inform disinherited children despite the clear terms of the English-law will. This created obvious tension with some families facing unexpected financial claims and highly sensitive succession disputes.”

Debate surrounding the position has continued to grow over the past five years, leading to many complaints to the European Commission arguing that Article 913, paragraph 3 of the French Civil code was contrary to the EU Succession Regulation, and in particular to the right to choose the law of one’s nationality to govern the succession as a whole.

The good news for British owners of French properties is that the European Commission has now issued a pre-closure letter in relation to the complaints and appears minded to close the case following clarifications provided by the French authorities.

Deborah continued: “The French authorities have confirmed that the purpose of Article 913, paragraph 3 is not to impose French forced heirship rules whenever a foreign law is chosen, but only where the foreign law contains no mechanism for protecting children.

“As English law contains a protective mechanism through the family provision rules, the compensatory clawback mechanism should not apply as the French authorities accept that these rules are a ‘functional equivalent’.

“This is very positive news for British nationals with French assets and should provide reassurance to those who have relied on English-law wills as part of their estate planning. The position is now more reassuring than it has been for some time but some caution is still required. At this stage, there remains uncertainty as to whether this position will have retrospective effect and how quickly and consistently this clarification will be applied by notaires in ongoing French estate administrations.

Every family situation remains different, and this clarification does not remove the need for proper cross-border estate planning, a choice of applicable law is an important tool but it is not a complete estate plan in itself.”

For advice on cross-border estate planning or other French legal issues, contact Deborah Vaysse on 01227 763939.