Wishes expressed outside testament

Mon 23 May 2022, Philippe Ropenga EU Succession Regulation 650/2012

A father entered into contract to transfer rights upon death regarding an immovable property located in Austria to his son and daughter-in-law provided that certain conditions had been met. The parties were German and Austrian law had been chosen as applicable law.¹ A dispute about the contract arose. The Austrian courts had to solve two issues regarding the Applicability of the EU Succession 650/2012.

Article 1 excludes the following from the scope of the regulation: 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);

According to the court, Article 956 of the Austrian civil code states that A donation to be completed only after the donor’s death is valid as a legacy subject to compliance with the prescribed formalities. It can only be regarded as a contract if it is accepted by the donee, the donor has expressly renounced the power to revoke it and a written deed of donation is handed to the donee.

Paragraph 1(1)(d) of the Notariatsaktsgesetz (Law on notarised acts) states that "a contract of donation without actual transfer must be recorded in a notarised act."²

Furthermore, Article 3(b) of the EU Succession Regulation states that "agreement as to succession” means an agreement, including an agreement resulting from mutual wills, which, with or without consideration, creates, modifies or terminates rights to the future estate or estates of one or more persons party to the agreement;

Is the contract under Article 956 of the Austrian civil code an agreement to succession or a gift? The EUCJ is willing to apply the Succession Regulation to a large number of successions as it has been seen inter alia in Re Mahnkopf³. It has decided that a contract created as the the one described under Article 956 of the Austrian was an agreement to succession and that the Eu Succession regulation was applicable.⁴ It does however not mean the Court is willing to apply the Succession Regulation to any request regarding a succession.

Recitals 48 and f. of the Succession Regulation read as follows:

In order to ensure legal certainty for persons wishing to plan their succession in advance, this Regulation should lay down a specific conflict-of-laws rule concerning the admissibility and substantive validity of dispositions of property upon death. To ensure the uniform application of that rule, this Regulation should list which elements should be considered as elements pertaining to substantive validity. The examination of the substantive validity of a disposition of property upon death may lead to the conclusion that that disposition is without legal existence.

An agreement as to succession is a type of disposition of property upon death the admissibility and acceptance of which vary among the Member States. In order to make it easier for succession rights acquired as a result of an agreement as to succession to be accepted in the Member States, this Regulation should determine which law is to govern the admissibility of such agreements, their substantive validity and their binding effects between the parties, including the conditions for their dissolution.

Article 22, §1 follows this principle of uniform application and states that:

A person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death

The contract mentions the choice of Austrian law and has been concluded prior to the Regulation's full entry in force. Article 83, §2 of the Regulation provides that:

where the deceased had chosen the law applicable to his succession prior to 17 August 2015, that choice shall be valid if it meets the conditions set out in Chapter III or if it is valid in application of the rules of private international law which were in force, at the time the choice was made, in the State in which the deceased had his habitual residence or in any of the States whose nationality he possessed.

If one reads Article 22, §1 alongside with Article 83, §2, one understands that when the agreement as to succession does not deal with the entire succession, article 83, §2 does not apply.⁵ This is a preliminary ruling and the solution depends on the fact of each case. This ruling makes sense when one knows that the EU favours market integration and that it is hard to achieve with partial agreements.

In brief, when it comes to the applicability of the Succession Regulation the EUCJ is lenient in cases involving the entire succession.

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