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17 Int'l Legal Prac. 22 (1992)
Issues Affecting Persons Living and Travelling Abroad: Problems of Estate Planning

handle is hein.journals/ilp17 and id is 24 raw text is: 22 ESTATE PLANNING ESAT P_ 1VL LANN ING i II# Issues Affecting Persons Living and Travelling Abroad: Problems of Estate Planning Dr Anna-Dorothea Polzer Heuking, Kuihn, Herold, Kunz & Partner, Dusseldorf To illustrate some estate planning problems of persons living or travelling abroad I would like to discuss a case which our firm handled. It presented standard questions of private international law in succession matters and allows some conclusions to be drawn as to how to prevent the problems which came up. Our person living and travelling abroad was an artist of Russian origin who during the course of his life obtained US citizenship. He acquired three islands off the Italian coast, an apartment in Switzerland and an interest in a French partnership, which owned an apartment building in Paris; he further- more held various intellectual property rights. The artist was married twice and had two children from each of his marriages. For the last years of his life, he lived with his second wife, a German, in Germany. Shortly before his death, he made a will before a German notary public. In this will, he nominated the two children of his second marriage as beneficiaries with respect to all of his assets. He furthermore appointed his second wife as executrix which office she was to exercise up to the age of 27 of the youngest child and granted her a usufruct right in his property until her death. First, a brief remark as to the form of a testament. Most European countries have adopted the Hague Con- vention relating to the law applicable to the form of last wills of 5 October 1961, among them the Federal Repub- lic of Germany, Belgium, Denmark, France, Greece, Aus- tria, Switzerland, the Netherlands and Great Britain. The Convention was not adopted by Italy. It provides a whole variety of connecting factors such as the place where the testament was made, the country of nationality of the testator at the time of the making of the will or the time of his death, the place of residence of the testator and as far as immovable property is concerned, the place where this is situated. Thus, the will is in order as to its form whenever it meets the formal requirements of at least one of the countries having the beforementioncd connections to the case. The rules of the Convention were incorpor- ated into the German statute on conflict of laws when this statute was substantially amended in 1986. Under these rules, our decedent's will was valid since it complied with the formal requirements for a testament under the laws of Germany and the decedent had sufficient connec- tions to that country: he had made his will in Germany. Furthermore, he was resident in Germany at the time of the making of the will. Italy, in fact, would also regard the will as valid under the lex loci actus. Secondly, a brief remark on how property of an estate is acquired by the heirs and beneficiaries under the civil law systems: they become owners immediately upon the death of the decedent. It is therefore not necessary to appoint an executor in the will because an estate adminis- tration in the sense of the common law does not have to take place. If an executor is appointed he does hold the property. For this reason, German courts even held that if a US testator owned land located in Germany and if his intention was that his estate be distributed soon after his death instead of being administered by the executor for a longer period of time, the appointment of an execu- tor is to be disregarded. In our case, to the extent German law would govern the succession, the second wife in her capacity as executrix would not hold the decedent's prop- erty. The courts would, however, uphold her appoint- ment as executrix because she was to administer the assets until her children reached the age of 27. The artist died and soon thereafter the two children from the first marriage raised substantial claims under the statutes of the civil law countries involved which grant disinherited children a forced share or similar right with respect to the estate: the purpose of these laws is to provide protection and support to the close relatives of the testator by granting them a portion of the estate contrary to the terms of the will. The fact that the two children from the first marriage raised these claims is at first sight surprising from a German perspective, because German inter- national law of succession states that matters of testate succession including the question of forced heirship are governed by the law of nationality. In the case under consideration, the testator was a US citizen and the con- cept of forced shares is not a part of the federal or state laws of the USA. From our point of view US law would be applicable to all of the property in the estate. Germany thus follows two fundamental rules. The first is that both testate and intestate succession is governed by the laws of the country in which the decedent has been a citizen or national (Articles 25 and 26, Intro- ductory Law to the Civil Code (EGBGB)). The second principle automatically results from this rule: all forms of property, both movable and immovable, are governed by the same law - a principle which contrasts to the com- mon law rules according to which movable and immov- able property follow different conflict of law rules, which results in the splitting of the estate into different portions governed by different laws. The German point of view thus would be that US law governs the succession. As the decedent was resident of New York before leaving the INTERNATIONAL LEGAL PRACTITIONER March 1992

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