Two recent judgments of the European Court of Human Rights (ECHR), handed down on February 15, 2024, in the cases of Jarre v. France and Colombier v. France, offer important insights into the issue of international succession.
In particular, the rulings highlight the importance of asset and tax planning in an increasingly global legal context, characterized by growing cross-border mobility of people and capital, where differences between legal systems can have a significant impact on the rights of heirs.
What is legitimate succession and how does it work in Italy?
In Italy, legitimate succession is governed by Articles 536 et seq. of the Civil Code.
Who are the legitimate heirs and what rights do they have
The necessary successors (known as legitimate heirs) are those who make up the closest family (i.e., the spouse, children, or, in their absence, ascendants), who are entitled to a share of the estate (the legitimate portion) predetermined by law, regardless of the wishes of the testator.
What happens if the legitimate share is infringed
The legitimate share cannot therefore be infringed either by testamentary dispositions or by acts of generosity (such as donations) made during the lifetime of the deceased. Otherwise, the heirs can protect their legitimate rights through specific legal remedies, such as action for reduction. This remedy allows the injured or totally pretermitted legitimate heir to challenge the testamentary dispositions or any donations made during the lifetime of the deceased, to the extent that they infringe the statutory reserve.
Why the rules are different abroad
However, in many foreign jurisdictions, inheritance law allows for full freedom to dispose of assets, without recognizing any reserved portion for close family members or instruments of protection comparable to those provided for by Italian law.
In this scenario, the ECHR rulings introduce new considerations on the freedom to dispose of one’s assets and the importance of making informed choices in the field of succession.
ECHR rulings: what changes for international successions
The Jarre and Colombier cases analyzed by the European Court
The cases examined by the ECHR in the Jarre v. France and Colombier v. France judgments concern the successions of the famous French composers Maurice Jarre (known for the soundtracks of successful films such as Doctor Zhivago and Ghost) and Michel Colombier (author, among many other successes, of the soundtracks of Purple Rain, starring Prince).
Both were residing in California at the time of their deaths and had placed their entire estates in trusts governed by Californian law. The two artists had designated their respective wives as the sole beneficiaries of the trusts, thus excluding their children from their respective estates.
The composers’ children, who were French residents, had brought legal proceedings in France, invoking the applicability of Article 2 of the Law of July 14, 1819, on the “droit d’aubaine et de détraction,” which allowed French heirs excluded from an inheritance governed by foreign law a “right of compensatory withdrawal” on assets located in France. However, in 2011, this rule was declared unconstitutional and retroactively repealed by the French Constitutional Court.
The appellants therefore argued that their exclusion from the succession violated international public policy, invoking Article 35 of Regulation (EU) No. 650/2012 on succession. However, the French judges considered the application of Californian law, which does not recognize any legitimate share for children, to be legitimate.
Does freedom of testamentary disposition prevail over legitimate rights? What did the ECHR rule?
The ECHR confirmed this interpretation, ruling that Jarre and Colombier’s wish to exclude their children from their succession was not contrary to international public policy. In fact, no violations of Articles 6, 8, and 1 of Protocol No. 1 to the ECHR, which protect the right to a fair trial, respect for family life, and the right to property, respectively, were found.
Referring to the historic Marckx v. Belgium judgment of June 13, 1979, the ECHR reiterated that there is no general and unconditional right of children to inherit a share of their parents’ estate and that the rules on compulsory inheritance do not fall within the principles of international public policy.
Asset and succession planning after the ECHR rulings
The ECHR rulings demonstrate the complexities that can arise from international successions, highlighting the importance of strategic asset and succession planning, especially in situations characterized by international elements.
Which countries guarantee the legitimate rights of heirs (and which do not)
The law applicable to succession—and therefore the choice of the country of habitual residence or the law to be specified in the will to govern the entire succession—can in fact have significant consequences on the rights of heirs.
An Italian citizen who wishes, for example, to avoid the rules on compulsory succession, could decide to transfer their habitual residence to a country that recognizes full freedom of testamentary disposition. If, on the other hand, the aim is to protect close family members and avoid disputes between heirs, it will be advisable to take into account the shares reserved for legitimate heirs by the law applicable to succession when making decisions about the estate.
Succession in different countries: the main differences
Several European Union countries (such as Italy, France, Spain, and Germany) have laws protecting legitimate heirs and limiting testamentary freedom and the disposal of assets. Many common law countries (such as the United States and the United Kingdom), on the other hand, allow greater (if not absolute) testamentary and dispositive freedom, with less protection for spouses and children.
The principles established by the ECHR confirm that the legitimate share is not guaranteed as a fundamental right at European level and that compulsory succession is not a matter of international public policy. These rulings therefore suggest that the implications of succession choices in international contexts should be addressed in a timely and informed manner.
What does Regulation (EU) No. 650/2012 provide for?
The main reference instrument in the field of international succession is Regulation (EU) No. 650/2012, applicable to all successions opened after August 17, 2015. It allows the testator, pursuant to Article 22, to make a professio iuris, i.e., to choose that the law of the State of which he or she is a citizen at the time of the choice or death shall apply to his or her succession. In the absence of a choice, the applicable law will be, pursuant to Article 21, that of the State of habitual residence of the deceased (even if it is the law of a non-EU country).
The importance of targeted succession and asset planning
In more complex cases (such as in the presence of assets or investments in several countries, dual citizenship, or residence in different jurisdictions in the last years of life), targeted estate and asset planning, developed with the assistance of professionals experienced in private international and inheritance law, can therefore be an effective tool for safeguarding the wishes of the deceased, protecting the rights of the heirs, and preventing potentially lengthy and costly inheritance and tax disputes.
