Property ownership in continental Europe is often fraught with some unique issues upon death. Most countries including Italy, Spain and France impose “forced heir-ship” rules. Accordingly, a portion of the property must pass to the children of the decedent at the time of death; spouse of the decedent can not be made the sole beneficiary of the Estate. As a result spouse cannot sell the property at his or her own will and must obtain consent form the children prior to selling. This causes many issues for the U.S. beneficiaries in terms of Estate tax.
Effective from August, 2015, the EU have decided to change these rules. The new EU rules envisage that the citizens of the U.S. can make a choice in their will that the U.S. law would apply to foreign property in an EU state. This would enable them to bequeath the whole property to their surviving spouse if they so wish, so it can only pass to the children on the second death. This should be a welcome news as until now the Estate plans had to have some complex provisions to counter the present EU law.
The new law becomes applicable for deaths occurring on or after August 17, 2015. Can you wait to die until then?
Original Post By: Pallav Acharya