Which law governs your inheritance?

As a general rule of thumb the inheritance is governed by the laws of the country you reside in. This isn’t necessarily always the case though. Every country can decide when their laws are applicable. This area of law is called International Private Law. Since every country had different rules on when their laws were applicable, this could lead to a conflict of laws, where both the country of origin and the new country of residence deemed their law applicable.

To resolve this issue and to stimulate the free movement of people the EU has tackled this problem by enacting European legislation called the EU Succession Regulation (Regulation No 650/2012). In this regulation the EU aligns the rules, between the member states of the EU, on which inheritance law is applicable and which court has the authority to rule on matters of inheritance. Especially moving between EU member states became much simpler. It is important to note that each member state of the EU keeps its own inheritance laws. Another key point is that the EU Succession Regulation has no impact on inheritance tax.

The EU Succession Regulation determines, if no choice of law has been made, that the habitual residence of the deceased at the time of death is the main factor to decide both the law and the jurisdiction. In order to assess the habitual residence, the life of the deceased during the years preceding his death and at the time of his death will be taken into account. In certain cases, determining the deceased’s habitual residence may prove complex. Such a case may arise, in particular, where the deceased for professional or economic reasons goes to live abroad to work there, sometimes for a long time, but maintains a close and stable connection with his country of origin. In such a case, the deceased could, depending on the circumstances of the case, be considered still to have his habitual residence in his country of origin.

In particular the centre of your family and social life, the location of your main assets, the duration and regularity of your presence in the country concerned, the conditions and reasons for that presence and the intent to build your life in this specific place could be a factor in the overall assessment of the habitual residence.

Why is it important to take action?

For most expats moving to Belgium long term, Belgian inheritance law will therefore be applicable. This isn’t necessarily an issue. Problems can however arise when your current estate planning or will isn’t adapted to the Belgian inheritance law.

If you have an already existing estate plan or will drawn up under the law of your country of origin, the arrangements of your estate plan might be contrary to Belgian law in which case the stipulations concerned will have no effect. Your current estate planning might also have negative inheritance tax consequences in Belgium. Another issue is the fact that some legal terms used in your home country do not exist under Belgian inheritance law. In this case is becomes difficult to correctly apply your current estate plan or will in Belgium. Finally, it will be much more difficult to execute the ruling of a foreign court under foreign law in Belgium.

What steps can you take to mitigate this issue?

For the previous reasons it is often better and easier to adjust your estate plan to Belgian law when you intend on living in Belgium long term. Since the reform of the inheritance law in 2018 there is much more flexibility and freedom in how you plan your estate in Belgium, which means you will often be able to retain your original wishes in your Belgian will. The inheritance tax consequences in Belgium of your wishes should also be taken into account.

If you do not plan to stay in Belgium long term, if you intend to keep most of your assets in your country of origin or if you prefer the inheritance law of your country of origin for any other reason, it can be useful to explicitly make a choice of law for the inheritance law of the country of your nationality, which is possible under article 22 of the EU Succession Regulation. This way there can be no doubt which inheritance law will be applicable.

Drawing up a Belgian will is relatively straightforward. You can either visit a notary or draft a handwritten will yourself. In the latter case, the will must be entirely handwritten, dated and signed. It can subsequently be deposited with a notary for safekeeping and registration.

Reviewing your estate planning arrangements before or shortly after a move to Belgium can help avoid unintended legal and tax consequences and provide greater certainty for both you and your family.

How PKF BOFIDI can help

Moving to Belgium often has consequences that go beyond income tax and payroll. Estate planning, inheritance law and inheritance tax are frequently overlooked but can have a significant impact on you and your family.

The Estate Planning team of PKF BOFIDI assists internationally mobile individuals and families with reviewing existing wills, estate plans and matrimonial arrangements to ensure they remain effective after a move to Belgium. We help you assess the legal and tax implications of an international relocation and provide practical guidance tailored to your personal circumstances.

Please do not hesitate to contact our team if you have any questions.