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Regulation of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession, also known as the Rome IV Regulation, was adopted on 4July 2012, and it must be applied in practice starting from 17 August 2015.
This Regulations lays down uniform conflict-of-laws rules and jurisdiction in cross-border matters of succession in the EU member states; it also defines regulatory framework for recognizing decisions and acceptance and enforcement of authentic instruments in matters of succession, and establishes a new cross-border document: the European Certificate of Succession.
A brief overview of the key matters is provided below.
Why Did the Necessity for Establishing a Uniform Regulatory Framework Occur?
The number of people who live abroad from their citizenship countries or who live in several countries and locate their assets there is continuously increasing. For this reason the following question becomes increasingly important: in which country should matters of succession be reviewed and which national laws should be applied?
Up to now the regulatory framework for determining the jurisdiction governing matters of succession and the applicable law differed from one member state to another. The criteria also differ between the five countries the representatives of which are present at the today's seminar. It is the deceased person's last habitual residence for Estonia, the testator's citizenship for Austria and Germany, the location of property for Latvia, whereas in Lithuania it is the shared connecting factor criterion, i.e. the person's domicile regarding movable property, and the location for immovable property.
In the case of differing regulation between countries, such situations occur where various EU member state institutions have the jurisdiction to adopt decisions in the same matter of succession, and they may apply various regulatory frameworks. Another identified problem was that the decisions adopted in one member state not always were recognized and enforced in other member states.
The Regulation seeks to address the mentioned problems.
Scope of the Regulation
In accordance with Article 23 of the Regulation, the determined applicable law is to regulate succession as a whole. The law applicable to matters of succession especially regulates: the causes of opening of the succession and the time and place thereof; methods for determining beneficiaries and the shares to be allocated to them; the capacity to inherit; liability for the testator's debts; reserved shares and other restrictions on the disposal of property; sharing out of the estate and other matters. The expression "shall govern in particular" used in Article 23 of the Regulation also allows for reviewing other matters which are not explicitly mentioned in this Article, unless such matters are excluded from the scope of the Regulation in Articles 1 and 2 thereof.
However the Regulation distinguishes the matters in which member states preserve the influence of the national law. The Regulation is not to be applied in the public law sphere, i.e. revenue, customs or administrative matters. The Succession Regulation does not affect national laws also in such areas of law as family law (including the matrimonial property regimes), rights in rem, handing over of property by other means than succession, registration of property rights and others. However one must ask whether the application of the Regulation will not destroy the balance of the protection of property rights by the uniformity of the governance of several areas of law ensured in one jurisdiction? This may happen, of example, if the succession law protects the property rights of the surviving spouse in one jurisdiction but the spouse in question is forced to inherit in accordance with the law where the matrimonial property rights are protected by family law, instead of succession law. In such a case the spouse loses the protection of his/her rights which would have been ensured by the uniformity of the laws of one jurisdiction.
Jurisdiction
In accordance with the key principle set forth in the Regulation, the court of the member state where the deceased person's habitual residence was has general jurisdiction to rule on the succession as a whole.
If the deceased person's habitual residence at the moment of death was not in any of the member states, the Regulation gives jurisdiction to rule on the succession as a whole to those courts of the member state the property of the succession is located in, if the deceased person was a citizen of this member state at the moment of his/her death or if the deceased person's form habitual residence had been in the particular member state provided that less than five years have passed since leaving that member state. Moreover, if in accordance with the basis mentioned before none of the courts of member states have jurisdiction, those member states' courts within the area of which the inheritable property is located have the jurisdiction to rule on the inheritable property.
One can conclude from the above mentioned that the deceased person's last habitual residence country has the primary jurisdiction however in certain conditions also the country where the testator's property is located may have jurisdiction.
The Regulation also lays down exclusive rights for the member state with which the testator had evidenced close links to rule in the situation if this member state has no jurisdiction in accordance with the above mentioned basis and if legal proceedings cannot be launched, or they cannot take place, or would not be possible in a third country with which the particular matter is directly linked to. Questions related to the criteria that could form the basis for the exclusive jurisdiction set forth in this Article require further discussion.
Cases where testators determine the law applicable to succession in their dispositions of property should be addressed separately. In such situations the "corresponding parties" may agree to give jurisdiction to the courts of the country the law of which was selected.
The Regulation secures the protection of a person's rights in the succession process in the shape of temporary security and protective measures in order to preserve successions in the interest of unknown or absent heirs. Protection of rights in a succession process is ensured in accordance with national laws justified by the efficiency of the process: the law applicable to succession might not be known at this stage, and poor links with the heir in question. Since these protective measures can be claimed at the courts of the location country, this is an exception to the principle which determines that jurisdiction concentrates in the habitual residence country of the deceased in succession cases.
Applicable Law
The aim of the Regulation is for the member state where the matter of succession is handled to apply its national law as well. However it also lays down an opportunity for persons to determine the law applicable to their matters of succession: the law applicable may be both - the law of another member state or that of a third country. The applicable law must doubtlessly stem from the disposition of property. Persons may instruct to apply only the law of the country they were citizens of at the moment of choosing the applicable law or at the time of death. If a person has several citizenships, the choice may be made in favour of the law of any country of citizenship, including the law of a third country. One must point out that the provision on the law of another country applicable to a matter of succession is related to the application of the substantive norms; simultaneously the handling process of a matter of succession takes place in accordance with the procedural norms of the particular member state.
The only exception when an institution may decline to apply the law of another country determined in a disposition of property is the situation when the application of the law in question is in obvious contradiction to the public order of the location country of the court (order publice principle).
Recognition of Decisions / Acceptance and Enforceability of Authentic Instruments
Even though the Regulation establishes a new international document, i.e. the European Certificate of Succession, there still may be situations in relation to matters of succession when recognition of decisions in another member state may be of importance. For example, if a court order settles a special dispute related to a matter of succession. The Regulation continues strengthening the principle that decisions adopted in one EU member state must be recognized in other member states, and they must by no means be reviewed as to the substance. The Regulation lays down a procedure for submitting applications for declarations of enforceability, basis for redress of court decisions, deadlines and other aspects. It should be especially emphasized that, on the basis of the mutual recognition of decisions between member states, the court can decline to announce the enforceability of a decision only in very limited exceptional cases. Article 40 of the Regulation lays down these exceptional cases, one of them being the order publice principle, similarly to the case of the applicability of another country's law.
The Regulation applies similar principles to authentic instruments stating that an authentic instrument issued in one member state must have the same evidentiary effect as in the member state of origin or the most comparable effects. Mutual recognition of authentic instruments is of great importance in matters of succession because legal facts or conditions in the field of succession often are evidenced with authentic instruments. If an authentic instrument is enforceable in the member state of its origin, then the procedure for declaring enforceability should also be observed in relation to its enforceability in accordance with the Regulation.
Since the competent authority in matters of succession of several countries questions regarding the competence of notaries should be addressed separately.
In relation to jurisdiction the solution provided in the Regulation regarding the Latin type of notaries, including the ones of Latvia, should be observed in greater detail. Chapter II of the Regulation which lays down the provisions regarding jurisdiction consistently uses the term "the courts of the member state". Conversely, the term "the competent authority of a member state" is also used in other Chapters and Articles of the Regulation. The question on whether the provisions of the Regulation on jurisdiction are binding for notaries in the corresponding member state depends on whether the term "court" applies to them for the purposes of the Regulation. As it is apparent from Recital 20 and 21 of the Regulation, the term "court" must be given a broad meaning in so as to cover not only courts in the true sense of the word, exercising judicial functions, but also the notaries or registry offices in some member states which are entitled to exercise judicial functions in handling matters of succession.
The Regulation distinguishes two cases:
- Provisions on jurisdiction are binding to notaries, and the circulation of decisions (certificates) issued by notaries must take place in accordance with the provisions on recognition, enforceability and enforcement of decisions.
- Notaries do not exercise judicial functions, and provisions on jurisdiction are not binding to them, and public circulation of the instruments issued by them takes place in accordance with the provisions on authentic instruments.
For the purposes of the Regulation Latvian notaries do not exercise judicial functions, thus the Regulation does not apply to us directly. Therefore the resolution on whether Latvian notaries will apply the provisions of the Regulation on jurisdiction is to be adopted by the legislator of Latvia.