Switzerland: Impact In Switzerland Of The European Succession Regulation

1. The European Succession Regulation

The purpose of the European Succession Regulation (the "Regulation") mainly consists in the introduction of uniform rules on jurisdiction and applicable law in order to avoid parallel proceedings and decisions in different Member States. Its scopes of application includes all civil aspects of succession except for matrimonial property regime, trust related and tax issues. The Regulation shall apply in all European Union Member States – except for the United Kingdom, Denmark and Ireland – to estates of persons dying after 17 August 2015 with either their last "habitual residence" in a Member State, leaving assets in a Member State, or in case of a choice of law in favour of the law of a Member State.

2. Impact for Switzerland

The estate of a Swiss national with last residence in a Member State, a Swiss resident with assets in a Member State, a foreign national with last residence in Switzerland, or a foreign resident with assets in Switzerland may be affected by the Regulation.

2.1 Jurisdiction

Under the Regulation, the general connecting factor is the last "habitual residence" at the time of the death. This notion is not defined in the Regulation except that its Preamble specifies that it should be understood as "overall assessment of circumstances of the life of the deceased during the years preceding the death and at the time of death" whereas under Swiss private international law, the "last residence" is the place where someone lived at the time of death with the intention of remaining there permanently. Therefore, potential conflicts are to be expected if both Switzerland and a Member State claim jurisdiction based on these two different definitions.

Moreover, the Regulation includes a subsidiary jurisdiction clause whereby a Member State shall have jurisdiction to rule on the estate if the deceased without a "last residence" in a Member State has nevertheless left assets in a Member State. Such rule may, from a Swiss law perspective, also results in a conflict of jurisdiction.

Finally, the Regulation provides the option of a choice of jurisdiction agreement when the parties agree that the courts of the Member State whose law has been chosen (see below) will have jurisdiction over the estate. Such possibility is only given if the testator has made a choice of law in favour of one of the Member State. Therefore, there will be no such option when Swiss law has been chosen.

2.2 Applicable law

According to the Regulation, the law of the country in which the deceased had his last habitual residence shall apply. The applicable law shall govern the whole estate (there shall be no scission anymore). For example, if a French national dies with last habitual residence in Switzerland and property in France, the French authorities will have to apply Swiss succession law. Moreover, the Regulation provides the option of a possible choice of law in favour of the national law of the testator.

2.3 Testamentary agreement

The Regulation recognises, under some conditions, the validity of a testamentary agreement (currently prohibited in some Member States). In principle, such agreement shall be recognised under the Regulation provided that it is valid under the applicable law, i.e., the law which, under the Regulation, would have been applicable to the succession of that person if he had died on the day on which the agreement was concluded. Parties may also choose the national law of the person whose estate is involved as the law to govern their agreement. Therefore, if a Swiss national whose last habitual residence was in one of the Member States has entered into a testamentary agreement, such agreement will be recognised if Swiss law applies to it, notwithstanding the fact that the Member State's law may not recognise testamentary agreements.

2.4 Certificate of succession

The Regulation introduces a new European certificate of succession, intended to facilitate the recognition of heir status. Such certificate shall be recognised in all Member States without any formalities. For third party countries such as Switzerland, the European certificate of succession will have to be validated following the proceedings of the relevant private international law (i.e., no automatic recognition). Swiss certificates of heirship will likewise need to be recognised in order to be given effect in a Member State.

3. Conclusion

Successions involving third party countries – such as Switzerland – will undeniably be affected by the Regulation. If it is clear that the aimed clarification and avoidance of parallel proceedings and contradictory decisions in different Member States will be reached by the Regulation, its impact on third party countries is likely to trigger some conflicts of law and jurisdiction. As always, careful planning taking into consideration all of an individual's circumstances will be key in order to avoid later undesirable effects.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.