Succession law with one hand tied behind your back

Tuesday, 01 December 2009

One of the joys of private international law (PIL) is the fact that in each jurisdiction it is in a continuous state of flux. Conventions, treaties and regulations can sweep like a tide across the existing legal landscape, producing further new sandbanks for the unwary.

The classic common law connecting factors of situs for immovables and domicile for movables are equally not impervious to the changing PIL of other jurisdictions. Renvoi from the state of domicile, by virtue of a connecting factor there of nationality or habitual residence, may send the succession law back in any event. The choice of law/professio juris provisions introduced, for example, into Dutch and Swiss law, means that someone domiciled in those jurisdictions, but a citizen of a common law jurisdiction, may be able to choose a common law to apply to their succession in any event.

Failure in the past to understand and legislate for the likely changing future has left a number of loopholes and equitable deserts.

Conventions, treaties and regulations can sweep like a tide across the existing legal landscape, producing further new sandbanks for the unwary

The Succession (Scotland) Act 1964 removed the right of a surviving spouse to a usufruct (the widow’s terce or the widower’s courtesy) in one third of heritable (immovable) property on the death of a spouse. Since 1964 Scottish succession legal (as opposed to prior) rights apply only to the movable property of Scottish domiciled persons. The Scottish Law Commission has now suggested a sensible way forward: that the new Scottish rights on succession should apply to any assets governed by Scottish succession law.

The rights under the Inheritance (Provision for Family and Dependants) Act 1975 in England and Wales only apply to the estates of persons dying domiciled in England and Wales. Immovable property in England and Wales of a person dying domiciled elsewhere has been unassailable. It is hoped that the Law Commission of England and Wales, in its report and draft bill to be published in late 2011, will also suggest a suitable plug for this particular gaping hole.

The changes introduced into the law of England and Wales by the 2000 Hague Convention on the International Protection of Adults using the connecting factor of habitual residence, rather than that of domicile, have highlighted the gap now left in relation to statutory wills, in which connecting factors of domicile and situs for immovables are still retained.

The recent New South Wales (NSW) case of Taylor v Farrugia [2009] NSWSC 801 is an interesting insight into how NSW deals with these issues. NSW retains jurisdiction for NSW immovables under the Succession Act 2006 (formerly the Family Provision Act 1982), even when the deceased died domiciled outside NSW (in this case in a constituent part of the EU, Malta). Brereton J used the fact that the defendant’s son, John Farrugia, lived in Malta, whilst the plaintiffs (as they still say in NSW) lived in NSW, to partition the Maltese assets to John as the Maltese resident defendant, by obtaining undertakings from the plaintiffs that they would disclaim their inheritance rights under Maltese law.

NSW law does not, however, deal with the problem of movables subject to a choice of NSW succession law.

The solution is that legislators must learn to limit jurisdiction and enforceability, with reference to the applicability of particular succession law, rather than to current narrow connecting factors, which are always likely to be subject to change and the effects of renvoi and professio juris in other jurisdictions.

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Richard Frimston

Richard Frimston TEP is a Partner at Russell Cooke LLP and Chairman of the STEP Cross Border Estates Group.

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