Things have changed since 17 August 2015 specifically in the area of cross-border executorship. Although the EU inheritance regulation was passed more than three years ago (August 16, 2012), because of the conditions contained therein, the legal implications have only come into force for deaths occurring from mid-August 2015. If the nationality principle applied hitherto, the law of the State in which the deceased (the testator) had his last habitual resident will apply uniformly from that date. This is accompanied by a clear unification of private international law.
Challenges of international executorship
International executorship too is feeling the effects of globalisation. In addition, the execution of a Will, especially ongoing execution abroad, is often unknown. The result is that this will not be implemented if succession rules apply other than the German rules. The increasing mobility of the world’s population has contributed to executorship frequently operating on an international stage and often being confronted with cross-border situations. For example, it is nothing unusual if the deceased has a bank account at different locations in Europe, maybe a small holiday apartment in Austria, a finca on Mallorca or a small house in the hinterland of the Cote d’Azur! But what happens when earthly life suddenly comes to an abrupt end and the testator has not taken any decision as to what will happen to his assets ? Conflicting interests of heirs, and of course the states where the deceased at one time felt very happy, lead to often lengthy legal cases and disputes in court.
Decision-making powers of the testator
Let us take a look at some admittedly small and simplified examples. The estate of a permanent resident in Germany (regardless of nationality) is inherited under German inheritance law, which is still quite usual. But a Frenchman living in Germany dies and in his Will arranges for ongoing executorship – the permissibility and effects of executorship are then assessed under German law of succession. But there is a choice of law with respect to the applicable law. The testator may individually decide which law should apply. So the testator has a decision-making power. The result is that he may choose whether he selects the law of the state to which he belongs at the time of the choice of law or at the date of death, or the law of the state in which he has his habitual residence at the date of death. Another example: A German living permanently in France may select German law of succession through a Will or a contract of inheritance. The permissibility and effects of the execution of a Will are assessed subject to German inheritance law. Without choice of law, French law would be applicable. Here, too, the following applies: if a testator has more than one nationality, he may choose the law of one of those states. It is in the nature of things that for German testators, for Wills and contracts of inheritance drawn up before 17 August 2015, there is a presumed choice of law in favour of German law (Art. 83 Para. 4 of the regulation). But there is no choice of law presumption in legal succession. It should also be noted that the national substantive law of succession, tax law and property law of the Member States are not affected by the regulation. The positive result of the inheritance regulation also has an impact on international applicability – the inheritance decisions of participating Member States are recognised in the other Member States and can be enforced.
Form follows function
Specifically in German inheritance law strict procedural requirements have applied hitherto, such as handwritten composition of the Will (in the case of drafting by one’s own hand) or the possibility of the “Berliner Testament” or community testament of spouses. But the latter is completely unknown abroad, for example, and would be invalid in many countries due to the regulations applicable there For this reason, the form of testamentary dispositions of property upon death is not included in the succession rules but is regulated separately. The effectiveness of form is based on the Hague Convention on the law applicable to the form of Testamentary Dispositions (1961), which has been taken over almost verbatim into German law (see. Art. 26 EGBGB). The Convention provides for a variety of connecting criteria by which a Will is effective in form. Here the objective is the fulfillment of the intention of the testator – which is to be determined if in doubt. A small example of this would be where the German testator E draws up a typed Will during his holiday in India with the assistance of two witnesses and arranges the executorship. A typewritten Will is invalid under German law, but under Indian law, on the other hand, it would be effective in form. The Will could therefore possibly also be recognized in Germany as effective in form, although it does not satisfy the form requirements applicable in Germany (notarisation or written by hand and signed).
Challenges to customer-oriented consulting in financial services
The new inheritance regulation already has a severe impact on citizens in Germany, if there are foreign assets or the place of residence is abroad (at least for most of the year). It is a matter of well trained bank consultants and financial service providers approaching their customers promptly with current expertise. Based on service-oriented asset management, attention should be directed towards issues which are in the interest of the customer before it is too late, in the truest sense of the word. The demographic development in Germany in particular, with ever-aging post-war generations, brings the issue onto the agenda. Considerable assets will be inherited in some cases in the coming years. This contributes to executorship – whether with national or international legal aspects and problems – becoming increasingly important in the financial services industry. Frankfurt School offers comprehensive training for certified executors (8 days of attendance, total duration about 4 months). Among other things, a module on international executorship is also integrated. All modules can be booked individually.