Cross Border Issues – Wills and Succession

An increasing number of individuals have connections with more than one jurisdiction. Conflicting rules can significantly affect their estate planning needs and requirements. With the increasing globalization of people and their property, those rules will become more important in the future. Appropriate professional advice has to be tailored to each client’s individual circumstances.

Jan Atkinson, partner and head of the wills, probate and disputed estates department at Osbornes discusses the rules applying to English law.

Although we are concerned with getting it right before death, that can be done only in the context of the rules that apply after death. Under English law, and under systems based on English law, the primary rules are these

1. Personal capacity to make a will of movables — mental ability, age, status —depends on the law of the testator’s domicile.
2. The essential validity of a will — the legal ability of a testator to dispose of property by will at all — depends, so far as it deals with movables, on the law of the testator’s domicile. So far as it deals with immovables its essential validity depends on the law of the situs of the immovables.
3. The formal validity of a will — the need for writing, witnesses and so on —depends on satisfying the requirements of one or other of several different systems of law.
4. The construction of the will depends on the law expressly or impliedly chosen by the testator.
5. The validity of a revocation of a will by a new will depends on the validity of the new one; but the validity of a free-standing revocation depends on the testator’s domicile at the time.
6. On an intestacy, succession to movables is governed by the law of the deceased’s domicile and succession to immovables by the law of the situs.

These rules are rules of the conflict of laws. Where they govern, the English court, or the court of a jurisdiction based on English law, will apply a foreign law in preference to its domestic rules. They are nonetheless rules adopted by English courts or imposed by English legislation. Foreign courts will usually have their own rules of the conflict of laws. But those rules may well be different and there is no guarantee that they will produce the same result. So it may well be necessary to enquire what answer a foreign court would give.

The English concept of domicile, in particular, is not known to systems of law based on the civil law — or, where they use what looks like the same word, they mean something different by it; more commonly they use residence or nationality as a connecting factor, both usually irrelevant under the English rules. Domicile is a central concept in English based systems.

DOMICILE

Everyone has a domicile and only one domicile. The core idea is that a person’s domicile is his permanent home. It may or may not coincide with residence. The law assigns a domicile of origin to every person at his birth: a legitimate child’s domicile of origin is that of his father; that of a child born out of wedlock is that of his mother. It is not necessarily the same as the country of birth. The domicile of origin continues until a new domicile has been acquired.

A new domicile may be acquired by choice, i.e. by residing in a country (other than that of the domicile of origin) with the intention of continuing to reside there permanently or indefinitely. Residence in a country is not, in itself, sufficient to acquire a domicile of choice. A domicile of choice is not acquired merely by accepting and holding a job in a country. It is difficult to lose a domicile of origin, which has an “adhesive” quality: there must be clear and positive evidence that a change has been made. Going abroad for a period of years will not of itself result in the acquisition of the domicile of choice, but if, when moving to live in another country or later, there is a genuine intention to remain there permanently or indefinitely, the individual will have acquired a new domicile of choice.

A domicile of choice may be abandoned and if not replaced by a new one the domicile of origin will revive.

A child acquires a domicile of origin at birth but it changes if that of the relevant parent changes, i.e. the father if still alive or the mother if the father is dead or the child was born out of wedlock. At common law, the child could not acquire an independent domicile until he or she reached majority. In England, by statute, the age is now 16.

A married woman formerly acquired her husband’s domicile on marriage. That common-law rule was changed in England by statute, so that she now retains her own domicile during marriage, but not so as to alter retrospectively a dependent domicile acquired before it came into force in 1974.

CAPACITY TO MAKE A WILL

There may be great differences between England and the rest of the world. In Scotland the age is 12. In India non-Muslim married women are restricted in their ability to leave property by will. The personal capacity of a testator to make a will relating to movables is determined by the law of his domicile. Personal capacity to make a will relating to immovables is governed by the law of the situs.  It is therefore possible to have a testator who is capable of making a will as to particular movables but not as to particular immovables.

ESSENTIAL VALIDITY OF WILLS

The issue of essential validity concerns the ability of the testator, and the extent of his ability, to dispose of his property by will at all — what may be called ‘proprietary capacity’ as distinct from personal capacity. The usual question is whether he is legally permitted to dispose of his whole estate by will or whether part of it must go to his immediate family.

In England and most common-law jurisdictions there is general testamentary freedom, often tempered by a power for the court to make some discretionary provision for the testator’s immediate family and dependents.  In much of the rest of the world, particularly in countries with civil law systems, fixed shares must go to the members of the immediate family (so-called ‘forced heirship’) and a will is invalid to the extent that it attempts to deprive them.

So far as the will disposes of movables, its essential validity is determined by the law of the testator’s domicile at the time of his death. A testator who is an Italian national, domiciled in Italy but resident in England, makes a will leaving his estate to a mistress and nothing to his adult children. The estate is all movables situated in England. On his death, the English court will give effect to Italian rules by which his children can insist on taking a share.

So far as the will disposes of immovables, its essential validity is determined by the law of the situs of the immovables. Scarfe v. Matthews (2012) 15 IT.E.L.R. 321 is an example. Bernard Matthews, the English turkey king, had a villa in the south of France. He made a French will leaving it to his partner of 20 years. By French law, his four children were entitled to take 75% of it. He expressed the wish that they would waive their rights. On his death, three of them refused. It was conceded in English proceedings that they were entitled to do so.

FORMAL VALIDITY OF WILLS

English domestic law requires a signature and two witnesses for a will to be valid. Caribbean countries following English law generally have similar provisions, though in Bermuda and in Germany a holograph will is permissible. In other countries, however, a will must be written out in the testator’s handwriting or notarised or registered.

The English rules about the formal validity of wills with a foreign element are now statutory and are contained in the Wills Act 1963.

WILLS ACT 1963

The present rules in England are those of the Wills Act 1963. A will is regarded as valid in England if it complies with the formalities required by any of the following laws:

• The law of the territory where it was made;
• The law of the territory where the testator was domiciled, either when the will was made or at death;
• The law of the territory where the testator was habitually resident, either when the will was made or at death;
• The law of the state of which he was a national, either when the will was made or at death,
• So far as it disposes of immovables, the law of the situs of the immovables

CONSTRUCTION OF WILLS

A will is construed in accordance with the law intended by the testator. There seems to be no distinction between movables and immovables for this purpose. The terms of the will may identify the law intended, either expressly or impliedly (as where it uses technical terms belonging to a particular system of law). Absent other indications, it is presumed to be the law of his domicile. The law was that of the testator’s domicile at the time when he made the will, not at his death – Wills Act 1963, s. 4.

The law governing construction will decide the meaning of technical words and other terms to which a precise definition has been attached.

Drafting points

Given that it can often be difficult to establish a testator’s domicile, some drafters include a statement of domicile in the will; others do not, taking the view either that such a statement will not affect the determination of the domicile or that any statement in the will might suggest a doubt. Since the rule is that a will is to be construed in accordance with the law intended by the testator, our view is that it is desirable to specify what that law is. It is not unusual for a testator to make more than one will for assets in different jurisdictions. If the wills are made at different times, this can cause difficulty. A familiar problem is the unthinking inclusion of a clause expressed to revoke all previous wills. Although the courts have been willing not to construe such clauses literally when they appear to have been unintended, they cause great uncertainty and expense. A similar problem is the unthinking inclusion of a definition of the testator’s estate as comprising property everywhere; plainly if there is to be more than one will each must define the assets to which it does and does not apply.

For more information about any of the issues discussed above and for advice on any international estate planning issue please contact Jan Atkinson by calling or e-mailing Jan.