Estate planning is the process of preparing for how an individual’s wealth and assets will be transferred when they pass away. Deciding who will receive ownership of real estate properties, how a person’s wealth will be divided and who it will be passed on to, and naming an executor of the estate to oversee the terms of the will are all important parts of this complex process, which is why individuals with substantial estates most often seek out qualified professionals to help them ensure that their wishes are carried out, and that their successors receive the maximum possible benefit.
Estate planning can be particularly challenging with dealing with estates that span across several jurisdictions with their own competing standards and rules of succession. This is where the expertise that comes with a degree in international finance can come in particularly useful, as estate planners navigate complex international laws to ensure their client’s wishes are respected.
If you’re interested in pursuing a career in international finance and want to know more about this process, here are five important facts to know about cross-border estate planning in the EU.
The EU Succession Regulation Determines Which Jurisdiction Has Authority
The EU Succession Regulation (also known as Brussels IV) has been in place since August 17th, 2015. This regulation was intended to simplify issues related to estate planning and succession for individuals with assets in multiple member-states of the EU, or those who have moved between countries. Since this regulation dictates which nation’s succession laws apply to an estate, it should be of interest to anyone considering a career in estate planning or related professions in international finance.
Students at Geneva Business School acquire an in-depth knowledge of international estate planning
Clients Can Choose the Country of their Nationality to Apply to their Inheritance
Under the EU Succession Regulation, when an individual passes away, their estate will generally be handled by a court or notary in the EU country in which that individual last lived, applying its own national succession laws.
When planning their estate, however, individuals can also specify that the laws of their own country of nationality should be applied, whether that country is an EU member-state or not. This means that an Australian living in France, for example, could specify that their estate be handled according to Australian law.
Either way, it’s important for estate planners with international finance training and their clients to specify which nation’s laws should apply to their estate.
EU Rules on Inheritance Do Not Apply to Denmark, Ireland, and the UK
Although the rules described above apply to the overwhelming majority of EU nations, there are three notable exceptions, who have opted out of the EU Succession Regulation: Denmark, Ireland, and the UK. Even citizens from these countries will be affected by the regulation, however, if they own assets or live in one of the included EU nations.
Brussels IV Only Applies to Determining Who Benefits from an Estate
While Brussels IV is applicable for determining who benefits from an individual’s estate, generally speaking, assets located in another jurisdiction will be taxed in accordance with the rules of that country. An asset located in France, then, will be taxed according to French succession taxes, regardless of which jurisdiction an individual has chosen to carry out their succession. Fortunately, with the expertise gained from international finance courses, professionals are able to balance these types of complex considerations to produce the best outcomes for their clients.