French will problems and misconceptions

French notaires may be authorised in France to draft cheap French wills, but are they best qualified to draft wills for English & Welsh nationals. We met Daniel (Dan) Harris, a specialist international and cross-border lawyer at the headquarters of Stone King LLP to ask him for his views .

Who should draft my French will?

We began by asking Dan Harris about the legislation that underpins this area of law, the EU Succession Regulation (EU 650/2012, Brussels IV). We will call it ‘the Regulation’. We asked him specifically what he thought was the key provision.

‘That’s easy’, he said. ‘From when the legislation became fully effective in 2015, British nationals have been able to choose the succession laws of England & Wales, or Scotland, or Northern Ireland to apply to their French estates.

He went on: ‘The point that most people seem to miss though, is that if UK nationals are going to choose UK succession law apply to French property, who is best qualified to draft the will? Is it a trained UK solicitor, or a French notaire who knows little or nothing about UK succession law?

‘In fact’, he added, ‘it is not just French notaires who have problems drafting French wills for UK nationals, it is also UK solicitors who have limited cross-border training and experience’.

To illustrate the point he went on to tell us a story about an English non-cross-border solicitor who had (embarrassingly) drafted a will putting French assets into a trust, which had resulted in a very large and very avoidable tax liability in France.

Harris said: ‘The fact is that cross-border estate-planning and will-drafting is very different to domestic UK planning and will-drafting. In our experience, UK domestic solicitors and French notaires who are not trained in international and cross-border planning are more prone to make mistakes ‘.

He went on to cite other advantages of having a UK solicitor draft wills for French assets. These included:

– eliminating language and legal-cultural difficulties;

– the client protection provided by the Solicitor’s Regulation Authority; and

– the fact that UK solicitors are required to have a minimum £2m insurance per claim to cover mistakes.

‘However’, he warned, ‘even specialist cross-border solicitors must be clear about the extent of the advice they can provide and should work in conjunction with French lawyers where complex issues involving, for example, French business structures arise’.

Problem French will

We asked Dan Harris to give us an example of a ‘real-life’ problem will.

‘I remember a few years ago a client came to us to have their French will drafted. The client already had an English will, drafted (amongst other things) to protect his disabled daughter.

We explained to the client that English and French wills need to be drafted so that they are fully compatible with each other, and that even with the simplest cross-border matter, there are a lot of interrelated ‘moving parts’ to analyse.’

Dan told us that if your lawyer is not asking you about all of the following, you should ask why not?

– Domicile, which is not where you live, or where you are born or your nationality.

– Spouses with different nationalities and/or domiciles.

– Children from previous relationships.

– French property ownership structures.

– Forced heirship.

– Taxation and particularly double taxation across borders.

– Matrimonial property regimes.

– Trusts.

– Adoptions.

– Family conflicts.

In Dan’s words: ‘After we had explained all of this, the client spoke to a French notaire who offered to draft a will for €300, and so the client decided not to take our advice.’

He later showed us the notaire’s will. It had two operative paragraphs. The first said:

‘I choose British law to apply…’, but of course there’s no such thing as British law, it’s the laws of England & Wales or Scotland, or Northern Ireland’. ‘This wasn’t an insurmountable problem, but the second paragraph was. It said:’I revoke all previous wills’.

The point that Harris was making was that the €300 will had revoked the English will, turning the entire estate in France and England into an English intestacy. This was not at all what the client had intended.

‘The story had a happy ending though’, Harris added. ‘Because we spotted the problem before the client passed away, we were able to correct it, but it could have been very different.

As an aside Dan added: ‘It’s not the wills you are paying for. Anyone can put words on a piece of paper that sound about right, but unless the draftsman understands and analyses the cross-border issues, those words can have unexpected adverse succession and taxation consequences.

This story was a salutary reminder that not only is the drafting of wills to cover French assets best avoided by the enthusiastic DIYer, it is also best avoided by non-specialist UK solicitors and/or will-writers.

French will misconceptions

Dan has seen hundreds of clients over the years to make their wills and so we asked him about the most common misunderstandings he hears about French wills. He said:

‘There are three key misconceptions. A French will does:

– not have to follow the French formal validity rules (of either being handwritten or drafted by a notaire);

– not need to be in French; and

– not need to be stored at the French will registry’.

He added. ‘If any professional on either side of the channel tells you that an English will, drafted for an English national, by an English solicitor is not valid in France, you should ask them about section 75 of the EU Succession Regulation and about the 1961 Hague Convention on Testamentary Dispositions. It is as valid in France as a French will.’

He added that his firm, regularly draft such wills which are used repeatedly and successfully in French estate administrations.

‘French lawyers seem to like our wills’ he said, ‘I think it’s because they benefit from the best of both worlds. They are drafted in accordance with English common-law rules, but tailored for a French Civil law administration’.

One will or two?

When it comes to having wills drafted to cover both your French and English assets, essentially there are three options. You can choose to have:

– a single will covering your worldwide estate;

– separate wills for your UK and French assets drafted by two different lawyers; or,

– separate wills drafted by the same UK specialist solicitor.

If you conclude that a UK lawyer is best qualified to draft your will according to the relevant UK law, this leaves a choice between one will or two, drafted by the same UK specialist

We asked Dan Harris what he thought and he said: ‘There are benefits to both’.

Starting with a single will, he said:

‘Because there is only one will, there is no danger of one of the wills accidentally revoking (cancelling) the other, or yet more common, one will having a revocation clause which is only partially effective. This means you have (potentially) two conflicting wills covering the same assets. A single will may also be less expensive than having two wills and it is easier and faster to change, although single wills are very restrictive.

On the subject of two wills Harris had this to say:

‘An advantage of two wills is that you can tailor the language of the ‘French’ will to be easier to translate and it is easier to incorporate compatible French legal structures (such as usufruit) into the planning when there are two wills. Above all, two wills provides for greater planning flexibility, allowing the draftsman to make tax efficient provisions to appropriate beneficiaries in one will, which can be balanced to other beneficiaries in the second will’.

Dan added:

‘With two wills the administration is also faster because it is possible to progress both administrations at the same time, instead of finishing one jurisdiction before starting the other. This can be important because in both the UK and France it is necessary to pay the tax within 6 months and failure to do so can lead to penalties and/or interest can be payable on late tax’.

He finished by saying:

‘Most clients we see are a UK nationals who are hoping to avoid French succession law by electing for (choosing) UK law to apply to their French assets. Our advice is usually to have separate UK and French wills drafted by a UK cross-border specialist’.

What about Brexit?

We suggested to Dan that Brexit may change all of this. His response was:

‘Not at all. Succession law and inheritance tax is one of the few areas where we can give your readers Brexit certainty, comfort and confidence.

In our view, succession (who gets what when you die) is one area of law that will be completely unaffected by Brexit. This is because the UK opted out of the 2015 EU succession regulation, which means it is already treated as a state outside the EU, so there will be no change to the application of the rules after the UK leaves.

As for inheritance tax, this is governed by a 1963 double taxation convention between France and the UK, which predates the EU. There are no plans for this to change as a result of Brexit either.

About the author

Daniel (Dan) Harris is the head of the international and cross-border (ICB) team at Stone King LLP, which is a specialist team that deals with nothing but international and cross-border work.

On cross-border matters Dan: authors articles; co-authors books, presents webinars and speaks regularly at professional venues, including the Society of Trusts and Estates Practitioners (STEP) and the England & Wales Law Society.

Dan, through his firm Stone King LLP, is one of the largest providers of training in the UK to other solicitors on international and cross-border matters, delivered through a commercial training organisation.

All past and present solicitors in the Stone King ICB team have been trained in-house to the highest standards and have subsequently completed the STEP benchmark qualification in this area with distinction.

Stone King are able to deal with every jurisdiction of the world, but about 50% of the work they do involves UK clients with French assets, or French clients with UK assets.

For further information email [email protected] or speak to one of the Stone King international & cross-border team on +44 (0) 1225 337599