Concerning inter vivos gifts [European Regulation in matters of international successions]

Concerning inter vivos gifts

What are we talking about here?

These might be donations inter vivos, and also “tontine” clauses (see 1joint tenancy with right of survivorship for US/UK law) or top-up pension plans with rights for the survivor or life insurance (see 2life insurance for US/UK law). Trusts are also subject to exceptions (Article 1(2)j^[1]).

Which questions are excluded from the scope of application of the Regulation?

However, the formal and substantive validity of inter vivos dispositions are outside the scope of application of the Regulation.

Usually, the national rules of conflict will apply. But not necessarily.

The validity conditions of inter vivos gifts under ordinary law will therefore be governed, in some countries, and more particularly in France and Germany, by the Rome I Regulation of 17 June 2008 on the law applicable to contractual obligations. Other States, such as the United Kingdom, will exclude the application of such a text to gifts. Without seeking to predict the position of the CJEU on this question, it should be pointed out that Point 9 in the Preamble of the proposal for a regulation of 14 October 2009 stipulated that “"the validity and effects of gifts are covered by Regulation EC n°593/2008 of 17 June 2008 on the law applicable to contractual obligations"”.

Which questions relating to inter vivos gifts are included within the scope of the Regulation?.

Concerning the abovementioned forms of inter vivos gifts, application of the Regulation is not entirely ruled out. We need to make a distinction here between the questions that are likely to arise. The Authors of the Regulation have noted the fact that in certain legal systems - Germany, Spain, France, Italy - the effects of the gift are not finished once it has been granted. They have therefore established a reserve in the application of the law governing the succession (Article 23(2)i^[2]).

Complement : In French law

A gift granted to an heir in advance of their share in the succession must be restored to the succession on the death of the deceased (it is subject to the law governing the succession). When a gift has been granted to a third party and there are heirs with reserved shares, it must be restored to the succession ifor the purposes of determining whether it exceeds the fraction of the estate that the deceased could dispose of freely and whether it must therefore be accounted for (this being subject to the law governing the succession).

Example :

A deceased person had donated a building located in Spain to one of his children as a gift. He was a resident in France when he died.

Pursuant to Article 4(1) c of the Rome I Regulation on the law applicable to contractual obligations, the validity of the gift will be governed by the law of Spain where the building is located. The same will apply to its irrevocability.

As the last habitual residence of the deceased was in France, French law will be applicable to the succession. By the terms of Article 23(2)i^[2],it applies to the question of restoring or accounting for gifts.

Consequently, French law will be applied to restoring the gift of the building located in Spain.

Warning :

This also means that the law governing the succession will also be applicable to the clauses concerning restoring the gift (fixed sum, exclusion from restoring) which might be contained in the gift.

Notes

article 1 § 2 f,g,h,i,j,k
The following shall be excluded from the scope of this Regulation:
- f) the formal validity of dispositions of property upon death made orally;
- g) property rights, interests and assets created or transferred otherwise than by succession, for instance by way of gifts, joint ownership with a right of survivorship, pension plans, insurance contracts and arrangements of a similar nature, without prejudice to point (i) of Article 23(2);
- h) questions governed by the law of companies and other bodies, corporate or unincorporated, such as clauses in the memoranda of association and articles of association of companies and other bodies, corporate or unincorporated, which determine what will happen to the shares upon the death of the members;
- i) the dissolution, extinction and merger of companies and other bodies, corporate or unincorporated;
- (j) the creation, administration and dissolution of trusts;
- k) the nature of rights in rem; and
Article 23 §2 i
- That law shall govern in particular: [...] any obligation to restore or account for gifts, advancements or legacies when determining the shares of the different beneficiaries;