Choosing US Law in a Will under the EU Succession Regulation

Part I. The general rule: habitual residence

Regulation (EU) No 650/2012 (the Regulation) applies to the succession of persons who die on or after August 17, 2015 (Article 83(1)). Unless it provides otherwise, the entire succession is subject to the law of the State where the deceased was habitually resident at death (Article 21(1)), even where that is not the law of a member state (Article 20). For a US citizen settled in Munich, Lyon or Milan, the default is German, French or Italian law, for movables and immovables alike.

Habitual residence is not defined. The recitals call for an overall assessment of the deceased’s circumstances during the years preceding death and at death, weighing the duration and regularity of presence in the State (recital 23). Where the deceased was, by way of exception, manifestly more closely connected with another State at death, the law of that State applies (Article 21(2)); the recitals reserve this for cases such as a recent move and exclude its use as a fallback (recital 25). Denmark and Ireland are not bound by the Regulation (recitals 82 and 83); there, local conflict rules decide.

Part II. Choosing the law of a nationality

A person may elect the law of a State of which he or she is a national, either when the choice is made or at death, and a person with several nationalities may elect any of them (Article 22(1)). The Court of Justice has confirmed that a national of a non-member State who lives in a member state may elect the law of that non-member State (judgment of October 12, 2023, C-21/22, OP). A US citizen with no EU nationality may therefore choose US law, and a citizen of the United States and of Germany, France or Italy may choose either law.

The choice is made expressly in a disposition of property upon death or is demonstrated by its terms (Article 22(2); recital 39). Its substantive validity is governed by the chosen law (Article 22(3)), and any later change or revocation of the choice must satisfy the form required for changing or revoking a disposition upon death (Article 22(4)).

The chosen law governs the succession as a whole, including the beneficiaries, their shares, the disposable part and the reserved shares (Article 23(1), (2)(b), (h)), and it applies without renvoi (Article 34(2)). Without a choice, renvoi matters where a US citizen dies habitually resident in the United States: a member state authority then applies the conflict rules of the US state insofar as they refer back to the law of a member state (Article 34(1)(a)), and those rules commonly refer land to the law of the place where it lies (see Part VI). A chosen state law also governs the apartment in Paris.

Part III. The United States has no single succession law

Article 22 refers to the law of the State of nationality, and the United States has no federal law of succession. Where the designated State comprises several territorial units with their own rules of succession, its internal conflict rules identify the unit (Article 36(1)); failing such rules, a nationality-based reference points to the territorial unit to which the deceased was most closely connected (Article 36(2)(b)). In the firm’s reading, the United States has no federal rule allocating a succession among the states, so Article 36(2)(b) decides.

The text does not say whether a testator may designate a territorial unit directly, as in "the law of the State of New York". The Bundesgerichtshof treated a British testator’s choice of English law, the law of one unit of the United Kingdom, as an effective choice under Articles 22 and 83(4), without discussing Article 36 (judgment of June 29, 2022, IV ZR 110/21). Whether an authority would apply the law of a named state with which the testator had only a slight connection, where Article 36(2)(b) points to another state, is uncertain. A choice of "the law of the United States" leaves the state to be found after the death.

The will therefore names the state and sets out the facts that connect the testator to it, such as birth, former domicile, family or property. The named state and the state of closest connection then coincide, and the choice holds on either reading. The connection is reviewed when the testator’s ties change.

Part IV. Public policy and the forced heirship rules of the state of residence

Because the chosen law governs the reserved shares, a choice of US law displaces those of the law of residence in principle. Louisiana excepted, the US states reserve no share of the estate for adult children (on Louisiana, La. Civ. Code art. 1493(A)). The limit is public policy: a provision of the applicable law may be refused only where applying it is "manifestly incompatible with the public policy (ordre public) of the forum" (Article 35).

Germany

A descendant excluded by will may demand from the heir the Pflichtteil, one half of the value of the intestate share; parents and the spouse have the same right (§ 2303(1), (2) BGB). The Bundesgerichtshof has held that applying an English law chosen under Article 22 is contrary to German public policy, at any rate where the facts are closely enough tied to Germany and the result is that a child has no compulsory share independent of need; the testator had lived in Germany for over five decades (judgment of June 29, 2022, IV ZR 110/21). For a US citizen long settled in Germany, a child’s Pflichtteil claim may therefore succeed whatever the choice.

France

Lifetime gifts and legacies may not exceed one half of the estate where the deceased leaves one child, one third with two children and one quarter with three or more (Article 913, first paragraph, of the Code civil). For successions opened since November 1, 2021, where, at the death, the deceased or one or more of the children holds the nationality of a member state or lives there habitually, and the foreign law governing the succession provides no protective reserve mechanism for children, each child may claim a compensatory levy (prélèvement compensatoire) from property situated in France on the day of death, up to the reserve that French law would grant (Article 913, third paragraph, inserted by Law No. 2021-1109 of August 24, 2021). Whether the law of a US state is such a law is a question of French law, on which French counsel advises; the firm plans on the footing that assets in France remain exposed.

For residents of Italy, Spain, Austria and other member states, the locally reserved share and the local approach to Article 35 are confirmed with counsel there.

Part V. What the chosen law does not govern

The Regulation does not apply to revenue matters (Article 1(1)). A US citizen remains subject to the US estate tax on all property wherever situated (I.R.C. §§ 2001(a), 2031(a)). Where the member state is France, Germany, Austria, Italy, the Netherlands, Denmark, Finland, Greece or Ireland, an estate tax convention with the United States allocates taxing rights and relieves double taxation; the Code and local law apply where no convention exists, as with Spain (see Tax Treaty Analysis). The choice of law in the will leaves the tax position unchanged.

Matrimonial property regimes are excluded (Article 1(2)(d)): what each spouse owned is settled first, and only the deceased’s share passes under the succession law (see Marital Property Regimes and the US Estate). Assets transferred otherwise than by succession, such as joint ownership with a right of survivorship, pension plans and insurance contracts, are also excluded, without prejudice to the rules on bringing gifts into account (Article 1(2)(g); Article 23(2)(i)).

The creation, administration and dissolution of trusts are excluded (Article 1(2)(j)), but for a trust created by will, the succession law still decides how the assets pass into it and who its beneficiaries are (recital 13). A US trust is therefore not insulated from the reserved shares of a law of residence that governs the succession (Article 23(2)(h), (i)), and its recognition is a question of each member state’s own law.

Part VI. Older wills and US real property

A choice of law made before August 17, 2015 stands if it meets the conditions of the Regulation or was valid under the private international law rules then in force in the State of habitual residence or of a nationality (Article 83(2)). A disposition made before that date under a law the deceased could have chosen is deemed to choose that law (Article 83(4)). An older American will drawn under one state’s law is therefore reviewed, and the choice confirmed or replaced expressly.

The European Certificate of Succession produces its effects in the member states (Article 69(1)). A US court applies its own conflict rules, which commonly refer real property to the law of the state where it lies (for example, N.Y. Est. Powers & Trusts Law § 3-5.1(b)(1)). New York lets a testator not domiciled there at death elect New York law for property in New York (§ 3-5.1(h)), and a will choosing New York law under Article 22 can make that election in the same terms. Real property in other states receives a US instrument, such as a revocable trust, drafted to the same plan.

The firm is led by attorney Caroline Esche Ashford, PhD, JD. A graduate of Columbia University Law School, her practice focuses on international estate planning and the cross-border taxation and administration of estates and trusts, including wills for US citizens living in Europe. Dr. Ashford is also licensed to practice law in Germany. She advises in French and German as well as English.