Anna Parker, senior associate in our private wealth group, says if you, like millions of other British people, own a property in Europe then you may have only limited control over who inherits your property when you die.
This is because many European jurisdictions impose 'forced heirship' rules on real estate. These rules oblige you to make provision for specified groups of people upon your death. This will generally be a spouse and children but could be others.
There are two main problems with this:
1. The surviving spouse loses control over the house - he or she cannot sell the house or mortgage it without the consent of the children.
2. Inheritance Tax could be triggered on the first of the spouses to die, instead of passing exempt to the survivor with tax only due on the second death. Funds may not be available to pay this.
British nationals can, however, choose to have their assets in most EU jurisdictions governed by English succession law. In order to do this, it is safest to include such a choice in your Will and in any other Wills you may have made elsewhere. If you have a foreign Will prepared before 2015 it will also be important to revisit this. You should then be able to leave your European property to whomever you think fit.
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For example, if you leave a spouse and four children, three quarters of the house might go to the children with a life interest to your spouse. The remaining quarter can be disposed of as you please. If you have no surviving spouse or children, other family members such as brothers or sisters might benefit, depending on the jurisdiction.