Anyone who moves their centre of life abroad rarely thinks of their will first. Yet emigration raises a question that decides the fate of the entire estate: which succession law actually applies if the deceased dies abroad? German law automatically, because they are German? The law of their new state of residence? Or something else entirely if assets are scattered across several countries? Since 17 August 2015, the EU Succession Regulation (Regulation (EU) No 650/2012, EuErbVO for short) has answered this question uniformly for most cross-border successions with a link to the European Union, with rules whose practical reach many emigrants recognise only when it is too late.
Below, we explain the central connecting rules of the Regulation, namely Article 21 EuErbVO (habitual residence as the general rule), Article 22 EuErbVO (choice of law), Article 10 EuErbVO (subsidiary jurisdiction) and the European Certificate of Succession (ECS), and what they mean in practice for emigrants.
When Is There an International Succession?
A succession becomes international whenever it has a foreign connection, and that is the case more often than many assume. Typical situations are:
- The deceased had their last habitual residence abroad, for example as a retiree in Spain, as an entrepreneur in Switzerland or as a digital nomad with changing places of stay.
- The deceased owned assets abroad, such as a holiday property, a bank account or a company shareholding, regardless of where they lived themselves.
- Heirs or legatees live abroad.
- The deceased held a foreign nationality or dual nationality.
- The will was made abroad or drafted under foreign law.
Each of these situations can mean that more than one legal system and more than one court come into consideration for the same estate. This is exactly where the EuErbVO comes in: through uniform connecting rules it is meant to prevent different Member States with different conflict-of-laws rules from reaching contradictory results.
The EU Succession Regulation: Uniform Conflict-of-Laws Rules Since 2015
From the Nationality Principle to the Residence Principle
Until 16 August 2015, Article 25 EGBGB (Introductory Act to the German Civil Code) applied in Germany in its then version: “Succession on death is governed by the law of the state to which the deceased belonged at the time of death.” The deceased’s nationality alone was therefore decisive, the so-called nationality principle. A German who died in France was in principle succeeded under German law, even if they had lived in France for decades.
With the EuErbVO, the European legislator brought about a paradigm shift. Since 17 August 2015, Article 21 (1) EuErbVO no longer connects to nationality but to the deceased’s habitual residence at the time of death. For emigrants, this means that anyone who permanently relocates their centre of life potentially also leaves the scope of German succession law, without necessarily intending this or even noticing it.
Scope of Application
The EuErbVO applies directly in the EU Member States with the exception of Denmark and Ireland, which do not participate in the Regulation. With 27 EU Member States at present, 25 states are therefore directly bound. Denmark and Ireland continue to apply their own national international succession law. The practical consequence is that German courts apply the EuErbVO in successions connected with these two states, but their courts do not proceed in a mirror-image way. For emigrants to Denmark or Ireland, it is therefore worth taking a separate look at the respective national conflict-of-laws rules.
Article 21 EuErbVO: Habitual Residence as the General Connecting Rule
The core of the Regulation lies in Article 21 (1) EuErbVO: “The law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death.” This connecting rule in principle covers the entire estate as a unit (principle of unity of the estate), movable and immovable assets alike, regardless of the country in which they are located. Where individual states deviate from this, for example on the basis of bilateral treaties, so-called split succession (Nachlassspaltung) arises, which is discussed below.
Article 21 (2) EuErbVO also contains an escape clause for exceptional cases: if it is clear from all the circumstances that, at the time of death, the deceased was manifestly more closely connected with a state other than that of their habitual residence, the law of that other state may exceptionally apply. This clause is designed as an exception to be interpreted narrowly and applies only in particular individual cases.
What “Habitual Residence” Means, and What It Is Not
A point that is often underestimated in practice: “habitual residence” within the meaning of Article 21 EuErbVO is an autonomous concept of EU law. It is not determined by rigid time limits but by an overall assessment of all the deceased’s circumstances of life in the years before death: the duration and regularity of the stay, the circumstances and reasons for it, family and social ties, and the place where the centre of life was actually located. A merely temporary stay is not enough. A certain degree of roots in the state concerned is required.
This concept is expressly not identical with habitual abode within the meaning of German tax law. Under Section 9 AO (German Fiscal Code), for tax purposes a continuous stay of more than six months is in principle treated as no longer merely temporary and therefore as a habitual abode. This rather schematic six-month presumption of tax law cannot be transferred unexamined to the succession-law connection under the EuErbVO, which is designed to be more evaluative and case-specific. An emigrant checking whether they have by now established their habitual residence abroad for succession law purposes should therefore keep these two areas of law cleanly apart and, in case of doubt, have both questions clarified separately. Cases with an unclear centre of life, for example persons with two residences or a frequently changing place of stay, regularly lead in practice to disputes about which law applies at all.
Article 20 EuErbVO: The Law of Non-EU States Can Also Apply
A mechanism that is neglected in many overviews but is particularly relevant for emigrants to third countries: Article 20 EuErbVO provides for universal application of the law determined under the Regulation. This means that the law designated by Article 21 or Article 22 EuErbVO is applied even if it is not the law of an EU Member State. If a German moves their habitual residence to Thailand, the United Arab Emirates or the USA, for example, and dies there, German courts, like those of other EU Member States, where they have jurisdiction, in principle apply the substantive succession law of that third country, provided that the stay there is actually to be characterised as habitual residence within the meaning of Article 21 EuErbVO. German succession law therefore by no means automatically continues to apply to emigrants in such cases. This is a widespread misconception which, without a timely choice of law, can lead to nasty surprises.
Article 22 EuErbVO: Choice of Law – National Law Instead of Habitual Residence
Anyone who wishes to avoid the application of a foreign succession law that may be unfamiliar to them can make use of the choice of law provided for in Article 22 EuErbVO. Under it, a person may choose as the law governing their succession as a whole the law of the state whose nationality they possess at the time of making the choice or at the time of death. Where a person has several nationalities, they may choose between the national laws concerned.
The choice of law must be made expressly in the form of a disposition of property upon death, that is, in a will or a contract of succession, or at least follow clearly from its terms. A tacit or merely presumed choice of law is not sufficient. In practice, this means that without such an express declaration in the will, the general connecting rule of Article 21 EuErbVO to habitual residence applies automatically, with all the uncertainties its determination can involve in the individual case.
For German emigrants who want their assets to continue to be distributed under familiar German rules, for example within a Berliner Testament (joint will of spouses) between spouses, a choice of German law is regularly the central planning instrument. It creates legal certainty irrespective of how the centre of life actually develops in the following years, and it avoids dispute about determining habitual residence on the succession. Which scope for structuring and which formal requirements are to be observed in detail, in particular where the will was already made before the departure or a choice of law is so far missing, is dealt with in more depth in the article Will for Residents Abroad: Which Succession Law Applies to Your Estate?. If there is neither a will nor a choice of law, statutory succession under the law determined under Article 21 EuErbVO applies. What this means concretely for emigrants is explained in the article Statutory Succession When Emigrating: What Happens Automatically to Your Estate Without a Will?.
Article 10 EuErbVO: Jurisdiction When Emigrating to Non-EU States
Alongside the question of which law applies, there is the separate question of which court has jurisdiction in the event of a dispute. The basic rule of Article 4 EuErbVO likewise connects to habitual residence: the courts of the Member State in which the deceased had their habitual residence at the time of death have jurisdiction.
It becomes problematic if a German emigrant last had their habitual residence in a third country outside the EU, for example in Switzerland, Serbia or overseas, and estate assets nevertheless remain in Germany, such as a bank account or a property. For precisely this situation, Article 10 EuErbVO provides for subsidiary jurisdiction:
- Under Article 10 (1) lit. a EuErbVO, the courts of the Member State in which estate assets are located have jurisdiction if the deceased possessed the nationality of that Member State at the time of death.
- If that was not the case, jurisdiction may alternatively arise under Article 10 (1) lit. b EuErbVO if the deceased had their previous habitual residence in that Member State, provided that this residence was not more than five years before the court was seised.
Where these conditions are met, the subsidiary jurisdiction under Article 10 (1) EuErbVO in principle covers the entire estate, regardless of whether individual parts of the assets are located in other third countries. If the conditions of Article 10 (1) are also not met, Article 10 (2) EuErbVO additionally provides for a narrower fallback jurisdiction limited to the assets actually located in the respective Member State.
For emigration practice, this is of considerable significance. A German national who emigrates to Serbia, the USA or the United Arab Emirates, for instance, and establishes their habitual residence there does not automatically lose the reach of German courts over assets left behind in Germany. Which probate court has jurisdiction in an individual case, and how several conceivable jurisdictions relate to one another, is dealt with in detail in the article Probate Court Jurisdiction for Residents Abroad: Which Court Decides on the Estate?.
When Special Treaties Take Precedence: Bilateral State Treaties
The EuErbVO does not apply without exception. Under Article 75 (1) EuErbVO, international conventions to which one or more Member States already belonged when the Regulation was adopted remain unaffected in their application. For German emigrants with a connection to certain states, the following older state treaties are relevant above all:
- German-Turkish Consular Convention of 28 May 1929: The annexed estate protocol provides for movable assets a connection to the deceased’s national law, while immovable assets, in particular land, are governed by the law of the place where they are located. A Turkish national living in Germany would accordingly be succeeded under Turkish law with regard to their movable assets, but under German law with regard to a property located in Germany.
- German-Soviet Consular Convention of 25 April 1958: This continues to apply in relation to certain successor states of the former Soviet Union and prescribes the application of the law of the state of location for immovable assets. For movable assets, the rules of the EuErbVO remain. The Baltic states are not regarded as treaty successors in this respect.
- German-Iranian Settlement Agreement of 17 February 1929: Here the agreement refers to the deceased’s national law for both movable and immovable assets, with the restriction that persons with German-Iranian dual nationality cannot rely on it.
In the situations concerned, these special rules lead to so-called split succession: different parts of the same estate are then assessed under different legal systems, depending on whether the assets are movable or immovable and where they are located. Anyone who holds assets in one of these states or possesses the relevant nationality should include these special connecting rules in their estate planning early.
The European Certificate of Succession (ECS)
Once the applicable legal system has been clarified, the practical question remains how heirs can prove their legal position to banks, land registries and authorities in several Member States. For this, the EuErbVO has created, in the European Certificate of Succession (ECS), an instrument of its own that is uniform across the Union.
Key points:
- The ECS serves as proof of the legal position as heir, legatee, executor or administrator of the estate and takes effect in all Member States in which the EuErbVO applies.
- Its use is not mandatory (Article 62 (2) EuErbVO): heirs can continue to rely on national instruments such as the German certificate of inheritance (Erbschein) where the estate has no foreign connection to other Member States.
- The ECS does not replace the German certificate of inheritance but exists alongside it as an additional instrument with EU-wide effect (Article 62 (3) EuErbVO).
- In Germany, the probate court is in principle competent to issue it, often, but not necessarily, the one that also has international jurisdiction.
- Unlike the German certificate of inheritance, which is valid without a time limit, a certified copy of the ECS is in principle valid for only six months under Article 70 (3) EuErbVO, after which an extension can be applied for. Anyone who wants to remain able to act abroad must keep this period in view.
For emigrants with assets in several EU Member States, for example a property in France alongside a bank account in Germany, the ECS regularly saves elaborate, parallel estate proceedings in each individual state. Outside the scope of the EuErbVO, for example vis-à-vis authorities in Switzerland, the United Kingdom or overseas, the certificate by contrast has no direct effect. There, the respective national forms of proof remain.
Compulsory Share Law and Other National Particularities Remain
An important point of clarification: the EuErbVO unifies conflict-of-laws rules, that is, the question of which national succession law applies, but not the substantive succession law of the Member States themselves. The law determined under Article 21 or Article 22 EuErbVO then itself determines how compulsory share claims are structured, whether they exist at all and how they can be enforced. This structure differs considerably between states. While German law structures the compulsory share (Pflichtteil) as a purely monetary claim against the heirs, the law of other states, such as France or Italy, leads to a proprietary participation of the persons entitled to a compulsory share in the estate itself.
If German law is called upon through a choice of law, German compulsory share law with its means of enforcement in principle also applies, subject to any ordre public questions in the respective enforcement state, which are not the primary subject here. How compulsory share claims can be enforced in detail where assets are located abroad and what particularities are to be noted is dealt with at length in the article Compulsory Share Law and Foreign Assets: How to Enforce Claims Across Borders.
Delimitation: The EuErbVO Does Not Regulate Inheritance Tax
A common misunderstanding in practice: the EuErbVO determines solely which civil-law succession law is applicable and which court has jurisdiction. It makes no statement whatsoever about the tax treatment of the estate. In Germany, inheritance tax questions continue to be governed independently by the Inheritance and Gift Tax Act (Erbschaftsteuer- und Schenkungsteuergesetz, ErbStG). Under Section 2 (1) No. 1 lit. a ErbStG, an acquisition is subject to unlimited German inheritance tax liability as soon as either the deceased or the recipient had a residence or habitual abode in Germany at the time of death, irrespective of which civil-law succession law applies to the succession itself.
This separation between the law governing the succession and inheritance tax law regularly means in practice that one and the same succession is administered under foreign law as a matter of civil law while German inheritance tax is due at the same time, with the additional risk of double taxation if the emigrant’s destination state also levies its own estate or inheritance tax. Since Germany has concluded double taxation treaties in the field of inheritance tax with only a limited number of states, this delimitation is of considerable practical importance for the overall tax planning of emigrants. The tax side, including the question in which cases a double taxation treaty applies and how double taxation can be avoided, is dealt with separately in the article Inheritance Tax and Double Taxation Treaties: When Foreign Assets Are Taxed Twice.
How Other States Connect: Habitual Residence Does Not Apply Everywhere
Anyone emigrating should also bear in mind that the destination state itself has its own conflict-of-laws rules, which are decisive for local court and notarial practice, irrespective of what the EuErbVO prescribes from a German or EU perspective. Serbia and Bosnia and Herzegovina, for example, connect jurisdiction and applicable law primarily to the deceased’s nationality or to the location of immovable assets. Japan, too, follows the nationality principle in essence. Switzerland and Denmark, by contrast, like the EuErbVO, focus primarily on domicile or habitual residence. For emigrants to such third countries, this means that even though EU courts are in principle willing to apply foreign law under Article 20 EuErbVO, the destination country may itself apply a completely different connecting rule. As a result, courts and authorities on the ground may reach a different outcome from a German court. A view limited to the EuErbVO alone therefore regularly falls short when emigrating to third countries.
Practical Recommendations for Emigrants
The legal mechanics described yield several concrete starting points in practice:
- Document the choice of law early. Anyone who wants their assets to continue to pass under German law should include an express choice of German law under Article 22 EuErbVO in a will or a contract of succession, ideally before the departure or immediately afterwards.
- Review existing wills. Older wills made under the former nationality principle should be reviewed after emigrating to see whether they contain an effective choice of law or whether a different succession law unintentionally prevails through the change of habitual residence.
- Document estate assets in Germany. Anyone who keeps assets in Germany despite emigrating should be aware of the possible jurisdiction of German courts under Article 10 EuErbVO and take this into account in estate planning.
- Check bilateral special treaties. Where there is a connection to Turkey, to certain successor states of the former Soviet Union or to Iran, it must be clarified whether treaties taking priority lead to split succession.
- Consider succession law and inheritance tax separately. The civil-law applicability of a particular succession law says nothing about the tax treatment. Both levels need an independent examination, in particular with regard to possible double taxation.
- Include the destination state’s conflict-of-laws rules. In particular when emigrating to third countries outside the EU, it should be examined how the destination country itself treats international successions, in order to recognise contradictions between the German and the foreign view early.
Conclusion
The EU Succession Regulation has fundamentally changed international succession law for emigrants. In place of the former connection to nationality, Article 21 EuErbVO has introduced habitual residence, a concept that is autonomous, to be determined in the individual case, and expressly not congruent with tax law time limits. This automatic rule can be steered deliberately through the choice of law under Article 22 EuErbVO. Through Article 10 EuErbVO, German courts retain, under certain conditions, reach over domestic estate assets even on emigration to third countries. Finally, the European Certificate of Succession facilitates cross-border proof of heirs’ status within the EU, but replaces neither the German certificate of inheritance nor a separate inheritance tax examination.
Anyone who knows these mechanics and plans in good time can considerably reduce the succession-law uncertainties associated with emigration. Anyone who ignores them risks that a foreign succession law, unfamiliar to them, ends up deciding how their assets are distributed.
Attorney Dr. Johannes Fiala and the law firm, with a focus on international succession law, tax law and asset protection in Munich, advise clients on succession planning in connection with emigration, from the choice of law in the will and coordination with foreign law to inheritance tax planning. Please get in touch without obligation to discuss your individual situation in an initial consultation.
