One Single Grant of Probate for all of Europe. Really?

What is a “European Certificate of Succession”?

If someone dies who owned assets in more than one European country, a central question is whether the executor(s) or the inheritor(s) must take out separate grants of probate (letters of administration) in each European country where the deceased has held assets. Or whether there is the option of applying for one single Grant which could then be used to administer the respective estates in all European countries?

Where did the Decedent have his/her last main Residence?

If the decedent died after August 17, 2015, the rules of the EU Succession regulations do apply. Or, to be precise, Regulation (EU) No 650/2012 of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession.

The goal of the EU Succession Regulation is to simplify the administration of multi-national estates by (i) applying the succession rules of only one country to the entire global estate and (ii) introducing a universally valid, single grant of probate which can be used throughout the entire European Union. Thus, instead of different laws of different countries applying to assets located in various countries (e.g. Germany, France, Spain, Italy, Netherlands etc), just one country’s laws will govern the entire estate of the deceased.

Under these new rules, the law of the country in which the deceased had his/her “habitual residence” (in German: “gewöhnlicher Aufenthalt”) at the time of death. The succession laws of that country will then govern the entire worldwide estate, at least from a EU law perspective.

Administration of a European Estate with one single Grant?

A core element of the Regulation which intends to make the life of executors and administrators of estate within Europe potentially much easier, is chapter VI of the EU Succession Regulation. According to the articles 62 to 73 of the Regulation, the competent EU probate court is able to issue a single “European Certificate of Succession” (ECS), sometimes also referred to as “European Certificate of Inheritance”, in German “Europäisches Nachlasszeugnis”. This EU probate certificate can then be used throughout the European Union as proof of who is beneficially entitled to the estate and who is thus entitled to access and receive the assets. In the words of the Regulation itself:

Article 63 Purpose of the Certificate

1.   The Certificate is for use by heirs, legatees having direct rights in the succession and executors of wills or administrators of the estate who, in another Member State, need to invoke their status or to exercise respectively their rights as heirs or legatees and/or their powers as executors of wills or administrators of the estate.

2.   The Certificate may be used, in particular, to demonstrate one or more of the following: (a) the status and/or the rights of each heir or, as the case may be, each legatee mentioned in the Certificate and their respective shares of the estate; (b) the attribution of a specific asset or specific assets forming part of the estate to the heir(s) or, as the case may be, the legatee(s) mentioned in the Certificate; (c) the powers of the person mentioned in the Certificate to execute the will or administer the estate.

Such universal European grant of probate is directly valid in all EU member states (well almost, as I will explain in a second). In other words: If a German probate court issues a EU Certificate of Inheritance, this can be used also in Italy, France, Spain etc without any need of resealing or ancillary probate procedure in those other European countries. See Article 69 of the EU Succcession regulation:

Effects of the Certificate

1.   The Certificate shall produce its effects in all Member States, without any special procedure being required.

2.   The Certificate shall be presumed to accurately demonstrate elements which have been established under the law applicable to the succession or under any other law applicable to specific elements. The person mentioned in the Certificate as the heir, legatee, executor of the will or administrator of the estate shall be presumed to have the status mentioned in the Certificate and/or to hold the rights or the powers stated in the Certificate, with no conditions and/or restrictions being attached to those rights or powers other than those stated in the Certificate.

3.   Any person who, acting on the basis of the information certified in a Certificate, makes payments or passes on property to a person mentioned in the Certificate as authorised to accept payment or property shall be considered to have transacted with a person with authority to accept payment or property, unless he knows that the contents of the Certificate are not accurate or is unaware of such inaccuracy due to gross negligence.

4.   Where a person mentioned in the Certificate as authorised to dispose of succession property disposes of such property in favour of another person, that other person shall, if acting on the basis of the information certified in the Certificate, be considered to have transacted with a person with authority to dispose of the property concerned, unless he knows that the contents of the Certificate are not accurate or is unaware of such inaccuracy due to gross negligence.

5.   The Certificate shall constitute a valid document for the recording of succession property in the relevant register of a Member State (…).

Sounds great, right? A single probate document which provides proof of who is entitled to the assets of the estate and which is recognized by all EU member states. There is only one small problem. In practice, hardly any European probate lawyers use this new shiny tool of European Certificate of Inheritance. Why does almost no one actually apply for this universal European grant of probate?

What’s wrong with the Single European Grant of Probate?

Here are the reasons why practically no European probate lawyer uses it.

1) Three countries have opted out of the EU Succession Regulation entirely: the United Kingdom (i.e. England, Wales, Scotland, Northern Ireland), the Republic of Ireland and Denmark. So if there are assets in any of these countries, the executor will have to obtain the respective national probate certificate anyhow, e.g. an English grant of probate or letter of administration. The EU Certificate of Inheritance can’t even be resealed or domesticated in the UK, Ireland or Denmark. Therefore, if there are assets let’s say in Spain and England, it has no advantage to apply for a EU Certificate of Inheritance in Spain because they must go through separate UK probate proceedings anyhow. Thus, it makes more sense to apply for a normal, standard Spanish grant of probate.

2) An EU probate certificate can only be issued by the probate court of that country where the decedent has had his habitual (i.e. main) residence prior to his/her death. So if the decedent has been living outside Europe (e.g. in the USA) or in one of the countries listed in 1) above, the option of a single EU grant is automatically off the table. Non-EU grants, for example probate certificates issued by a court in the USA, can also not be resealed or domesticated in Europe (for details see here).

3) In some European countries like France and Austria, the domestic probate court plays a very active role in the administration of the estate. Thus, a EU Probate Certificate issued by the court of another country does not eliminate the need of involving the probate courts or notaries public in the countries like France or Austria.

4) Probate court staff and probate lawyers in Europe are not well acquainted with the EU probate certificate. The application procedure differs from what the probate lawyers in the respective European country are used to, so everyone tries to stay away from what they are not familiar with. If you take a look at the 19 page EU probate application form you may get an idea why nobody has really fallen in love with the single European Grant of Probate just yet. The English language application form is available for download on the official European Union website here.

5) Just as European probate registrars, probate judges and estate lawyers are not really familiar with the EU grant, neither are bankers, insurers and their inhouse lawyers. This means that when using a EU probate certificate in order to get a Spanish, French, Italian or German bank to release funds, there will be more queries and longer assessment times. Bankers are afraid to pay monies to the wrong person. If you donot present them with their national grants in order to legitimize yourself, but instead with a EU grant that everybody in the banks legal department sees for the first time in their lives, they will take their sweet time to check whether this document is valid. Which brings us to the next problem.

6) Finally, and this is a major nuisance in practical probate administration, a European Certificate of Inheritance does expire after six months. Article 70 para. (3) of the Regulation reads:

The certified copies issued shall be valid for a limited period of six months, to be indicated in the certified copy by way of an expiry date. In exceptional, duly justified cases, the issuing authority may, by way of derogation, decide that the period of validity is to be longer. Once this period has elapsed, any person in possession of a certified copy must, in order to be able to use the Certificate for the purposes indicated in Article 63, apply for an extension of the period of validity of the certified copy or request a new certified copy from the issuing authority.

If you are an international probate lawyer who needs to access assets in various European countries like Italy, Spain, Germany, France etc. you will normally not know how long the banks, insurance companies, land registries and other institutions will take in order to release monies or update their registers. Six months go by fast, especially if you have to sort out complex cross-border inheritance issues, deal with various inheritance and estate tax regimes and correspond with banks.

In this situation, it is this extremely frustrating if the executor or his probate lawyer needs to worry also about the expiry date of the grant and must, if everything takes longer than expected (which it usually does), re-apply for another probate certificate every six months.

Better the Devil you know

For all these reasons, most European probate lawyers recommend to their clients to go the traditional route and apply for the respective national grants of probate, i.e. a German Erbschein for Germany, a French Certificate of Inheritance for France etc. These domestic probate certificates do not expire and are accepted without any problems by the domestic banks and their inhouse lawyers. Article 62 para. (2) and (3) of the Regulation permit this “old school approach”:

(2) The use of the Certificate shall not be mandatory.

(3) The Certificate shall not take the place of internal documents used for similar purposes in the Member States

 

However, having explained all the downsides of the EU-wide grant, there are some — albeit rare — circumstances in which we do opt for the EU Certificate of Inheritance. It all depends on which assets exist in which European countries and how long we do expect the administration will take.

For more on international probate and US-German estate administration see these posts:

The law firm Graf & Partners and its US-German litigation department GP Chambers was established in 2003 and specialises in British-German and US-German probate matters ever since. We administer international estates and  represent clients from the USA and UK in contentious probate matters. If you need qualified advice or representation in a German inheritance case, don’t hesitate to call the probate experts of GrafLegal.