What happens to your UK will if you buy a French property? Matthew Cameron explains
While it may seem counter-intuitive to be considering the implications of English law in a magazine about living in?France, this is a valid and often neglected area. Legal editorial in these pages has regularly concentrated on how French inheritance law affects people who buy property in France, and the different implications depending on their family situation, whether they are living in France or the UK, and so on.
Yet it remains just as important to consider how a purchase in France, or a permanent move there, will affect your UK wills and what steps you should take in this respect. If you move to France permanently will all, or any, of your estate (that is, everything you own) be governed by French law? What will remain subject to English law? Does it matter if you do not declare your status as French resident to the French tax authorities?
There are two fundamental questions that need to be considered: domicile and which law affects which part of your estate. Let us first consider the latter of these questions.
Real propertyEnglish law and French law agree on how different elements of your estate are dealt with. Your real property – that is, any land and buildings you own – is always subject to the law of the country in which it is situated. So the house you keep in England will pass on your death in accordance with the requirements of English law, the house in France in accordance with those of French law.
The remainder of your estate, your personal property – such as bank accounts, investments, furniture and anything else you own – will pass on your death in accordance with the law of the country of your permanent residence at the time of your death. It is important to establish where you were permanently resident, or domiciled, so that we can then consider which law will apply. Normally there is no doubt as to this position – in general, it is clear whether you live in France or the UK. When there are doubts, though, a number of conflicts can arise between the two laws, to decide which of the two would take precedence. This, though, could provide the topic of a whole new article – for this one we shall presume there is no doubt as to domicile.
Domiciled in FranceIf you live in France your personal estate will be subject to the French rules of inheritance, for example your children would have fixed rights to take a part of it. So even if you have a bank account in the UK, there is a possibility that your children may have rights to at least part of it. Commonly, a married couple will hold a shared UK bank account in such a way that the survivor of them would inherit it automatically, before the French rules of succession are applied. This would mean that a shared bank account will generally pass to the survivor, but the same is not necessarily the case for an account held in the deceased’s own name.
If you own a house in the UK while living in France, then this house will remain subject to English inheritance rules. It is commonly the case that when a couple jointly buy a house in England and Wales, it will be bought under a joint tenancy. In this manner, it is the survivor of the two owners who would automatically inherit the house. (This may sound somewhat similar to the well-known French purchasing structure, the tontine clause; there are, though, substantial differences and certainly owning a house under a joint tenancy does not engender the same harsh consequences that may follow from tontine ownership.)
It is not so important to ensure that survivorship would be guaranteed through ownership structures like the tontine clause. Unlike under French law, there are no fixed rights of inheritance in favour of one’s children and in principle English law grants a person absolute testamentary freedom. This means that a person is able to leave his English estate to anyone he may choose. Thus a simple will would suffice to ensure, for the French resident testator, that his interest in an English house would pass to any person he may choose.
So in much the same way that most lawyers would advocate that a British-resident person with a house in France would have a French will to govern the house in France, then it is wise to ensure that a French-resident person would have an English will to govern the devolution of their English house. While such devolution could be covered perfectly well in a French will, a number of complications would follow after the testator’s death, including the fact that the will is in French; the first step would be to have it translated into English.
Thereafter, if the French will was written in the common, handwritten format, then the English solicitors and the English Probate Registry will require certification that it has been validly completed. Since a handwritten French will must only be written out, signed and dated by the testator, without any witnesses countersigning it, it is likely that the English probate solicitor will not appreciate whether it has been completed correctly and will require confirmation from a suitably experienced lawyer that this French will was completed correctly.
Better, therefore, to prepare a separate English will to deal with the English property, a reflection of the general advice for a UK resident couple who own a property in France, in which case it is normally suggested that they prepare French wills to deal with the French property, and English wills to cover the rest of their estate.
English-based assetsFor a French-resident couple, any English-based assets other than real property will pass subject to French law. Nevertheless, any bank accounts that were held between a couple jointly under a joint tenancy arrangement should generally pass automatically to the surviving partner, irrespective of the requirements of French law. There is a debate as to whether this would result, in the event of a surviving partner inheriting in preference to the children of the deceased, with a debt owed by the survivor to the deceased’s children, although it must be said that such a debt would be hard to prove.
So if you are resident in France, French law will govern all of your worldwide assets irrespective of where they may be situated, save for a house in the UK that will pass under English law. If you own that pied � terre on the north side of the Channel, you should therefore ensure that your English wills are updated correctly. And when you come to rewrite them, it is imperative that you take extra care that a new English will would not accidentally revoke an existing French one. However your estate is to be managed, whether subject to French or English law, inheritance matters can be highly complicated and will always require specialist advice to make sure your interests are protected so far as possible. fact fileAshton Graham www.ashtongraham.co.uk/france