In an increasingly globalised world, it is common to own property in several countries or to move abroad for retirement or a career. However, when a death occurs, this cross-border dimension transforms estate planning and settlement into a real legal and tax headache. Which law applies to the estate of a deceased person who lived between two countries, and how can you prevent the transfer of assets from becoming an obstacle course for heirs? This comprehensive guide, written by the experts at AvocatAI, provides you with all the keys to understanding and planning an international succession under French and European law.
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For several years now, the European Union has greatly simplified the rules governing conflicts of laws in inheritance matters. The central element of this harmonisation is the European Succession Regulation (No. 650/2012), which entered into force on 17 August 2015. This text applies to all estates of persons who died on or after this date, provided the succession has an international character (for example, a French national residing in Morocco, or a British citizen owning a villa on the French Riviera).
Before 2015, France applied a scissionist system: the law of the deceased's last domicile governed movable property (bank accounts, cars, company shares), while the law of the place where the property was located governed immovable property (real estate).
Since 17 August 2015, the principle is that of the unity of the succession. A single national law applies to all of the deceased's assets (both movable and immovable), whether located in France or abroad.
According to Article 21 of the European Regulation, the law applicable to the estate as a whole is that of the State in which the deceased had their habitual residence at the time of death.
To avoid subjecting one's estate to the law of a temporary country of residence, the European Regulation offers a crucial option: the professio juris (Article 22 of the Regulation).
Any person may choose, during their lifetime, that the law of the State of their nationality (at the time of making the choice or at the time of death) govern their succession.
French law protects descendants through the mechanism of the réserve héréditaire (forced heirship reserve under Articles 912 et seq. of the Code civil / French Civil Code), which prohibits disinheriting one's children. Conversely, Common Law countries (such as the United Kingdom or certain US states) recognise almost total testamentary freedom.
If a French citizen resides in England and has not made a choice of law, English law will apply to their estate, potentially allowing them to exclude their children. To remedy this, France introduced Article 913 of the Code civil (amended by the law of 24 August 2021): a droit de prélèvement compensatoire (compensatory levy right) allows injured children to recover from assets located in France a share equivalent to what they should have received under French law, if the deceased or one of their children is a national of a European Union Member State. However, be aware that the conformity of this text with European law is the subject of intense legal debate.
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It is fundamental to distinguish the civil law (which designates the heirs and their shares) from the tax law (which determines the inheritance tax). The 2015 European Regulation does not concern taxation.
In the absence of a bilateral tax treaty, France applies Article *750 ter of the Code général des impôts (CGI)* (French General Tax Code) to determine if it can tax the estate:
1. If the deceased was tax resident in France: all of their assets, movable and immovable, located in France or abroad, are subject to French inheritance tax.
2. If the deceased was resident abroad: only assets located in France are taxed in France. However, if the heir is resident in France on the day of death and has been so for at least 6 years during the last 10 years, all assets received (located in France or abroad) are taxable in France.
To avoid double taxation (paying tax in the country of residence and in France), one must refer to the bilateral tax treaties signed by France. If no treaty exists, the tax paid abroad on assets located outside France is generally deductible from the tax due in France (Article 784 A of the CGI).
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Situation: Jean, a French national, is a widower with two children. He retired to Portugal, where he owns his primary residence valued at €300,000. He also has a bank account in France containing €100,000. Jean dies in Portugal without having written a will.
Situation: John, an American citizen, resides in New York. He owns an apartment in Paris valued at €600,000 and bank accounts in the United States worth $1,500,000. He dies in New York, leaving all his assets by will to his new wife, excluding his son from a first marriage.
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Settling an international estate requires a methodical approach. Here are the 6 key steps to follow:
1. Contact a specialised notary: As soon as the death occurs, contact a notaire in France (or the local equivalent abroad) experienced in international cases. They will act as the coordinator of the procedure.
2. Establish the list of assets and their location: Gather all proof of ownership, bank accounts, securities portfolios, and debts in all countries concerned.
3. Determine the applicable civil law: The notaire will analyse the deceased's habitual residence and the existence of a will containing a professio juris clause.
4. Obtain the European Certificate of Succession (ECS): If the estate involves several European Union countries, ask the notaire to draw up an ECS. This official document, recognised throughout the EU (excluding Ireland and Denmark), proves the status of heir without additional legalisation formalities.
5. File the inheritance tax return: You have a period of 6 months (if the death occurred in France) or 12 months (if the death occurred abroad) to file the inheritance tax return (form 2705 and following) with the French tax authorities and pay any duties.
6. Proceed with the distribution of assets: Once the taxes are paid and the actes de notoriété (certificates of heirship) are established, the transfer of ownership of real estate and the release of bank accounts can be carried out in each country.
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If your father did not write a will to choose French law, Spanish law (the law of his habitual residence) will apply to his entire estate. Note that Spanish law varies by region (autonomous communities), which can make the case more complex.
The ECS is a standardised document created by the 2015 European Regulation. Issued by the notaire in charge of the estate, it allows heirs, legatees, or executors of wills to prove their status and powers in any European Union country without further formalities.
No. In France, the spouse is protected and exempt from inheritance tax. In other countries, their share may be very small in the presence of children, or conversely, they may inherit everything. Hence the importance of planning your estate through a marriage contract or a will.
You must analyse the tax treaty between France and the country concerned. Generally, real estate is taxed in the country where it is located. France then grants a tax credit equal to the tax paid abroad (or the corresponding French tax) to prevent you from paying twice.
The formal validity of wills is governed by the Hague Convention of 5 October 1961. A holographic will (written, dated, and signed by the hand of the testator) is generally recognised as valid in signatory countries if it complies with the law of the place of writing or the nationality of the deceased.
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Legal information for guidance only, not personalised legal advice. For your specific situation, ask your question free of charge on AvocatAI — answers based on French law, in your language.