If you own assets in an EU country (with the exception of Ireland and Denmark), then where you live – known as your ‘habitual residence’ - will be important when it comes to your Will and may impact how, or even if, the wishes expressed in your Will are carried out.
This is due to the EU Succession Regulation (650/2012 also known as Brussels IV). Under the EU Succession Regulation, habitual residence is very important. A person’s habitual residence affects which country’s laws apply when carrying out the terms of their Will.
An interesting example that demonstrates how complicated this can be is the case of Johnny Hallyday, the French rock and roll singer, who died in December 2017 at the age of 74. His death sparked an international challenge to the validity of his Will and an investigation into his habitual residence to determine which of his family members were entitled to inherit his estate.
The issues with Johnny’s estate highlight a conflict of law which people encounter every day when dealing with international successions, but what makes this case unusual is the amount at stake. The estate was first estimated to be approximately £86,000,000.
Johnny was a French citizen but spent much of his later life in California, USA.
Johnny’s assets were situated in a number of countries including the USA and France.
At the time of his death, Johnny was married to his fourth wife, Laeticia, with whom he had two adopted children. Johnny also had two children from his former marriages: Laura and David.
Johnny signed his last Will in 2014. It was a Californian type of Will in which he left his worldwide estate to a Trust, the JPS Trust, naming his wife Laeticia as the sole trustee and beneficiary.
He did not leave his eldest two children any of his assets under the terms of his last Will.
- French forced heirship
In France ‘forced heirship’ laws exist which prevent parents from disinheriting their children.
The two older children (not mentioned in the Will) argued that Johnny’s Will was contrary to French forced heirship law, which would automatically have split his estate between his four children and his wife.
- The European Succession Regulation and Habitual Residence
The European Succession Regulation came into force in 2015. It modified French law by establishing the principle that the default law that applies when determining succession (who gets what), for all property or rights wherever they are located, is that of the habitual residence of the deceased at the time of his or her death.
So, if a person was habitually resident in England but had £1,000,000 in a French bank account, the English succession rules would apply when determining who can inherit the £1,000,000, not French succession laws.
The distinction is important because under English law a person can leave their assets to whomever they wish, whilst under French law they must leave a percentage of their assets to their children.
In Johnny’s case, if he was habitually resident in California at the time of his death the terms of his Will would be valid. If he was habitually resident in France, then the terms of his Will - that excluded his children - would not be valid in France.
- The challenge to Johnny’s Will
Johnny’s wife Laeticia brought proceedings to the Superior Court of California in Los Angeles seeking an order to transfer various assets of the rock star to the JPS Trust.
Johnny’s children, Laura and David, began court action to prevent this. They sought a declaration that Johnny’s Will was null and void under French law.
The French court stated that in the absence of an applicable international convention between the USA and France regarding successions, the European Succession Regulation should apply in this case.
Laeticia argued to the Court that Johnny had a closer and stronger connection with California than France and was therefore habitually resident in California, USA, and that Californian law should apply.
She stated that Johnny had settled with his family in Los Angeles in 2007 and that their daughters had gone to school there since 2011. Johnny obtained his Green Card in 2014 and Laeticia claimed that Johnny wished to obtain American nationality by 2019. She also argues that he had an American bank account, driving licence, and had two properties in California. In 2017 he voted for the French presidential elections from the French consulate in Los Angeles.
Laura and David argued that Johnny was more closely connected to France and therefore had his habitual residence in France and that French law should apply.
They claimed that up until 2011 Johnny had signed several documents stating that his residence was in Switzerland. Johnny’s social media accounts were also used by his son as evidence that his habitual residence was in France. David proved that thanks to the geo-location of his father’s pictures on Instagram he spent 151 days in France in 2015 and 168 days in 2016. David also argued that although his father was fascinated by the American lifestyle he did not have American citizenship, he had French nationality and the majority of his properties were in France.
Laura also argued that Johnny wished to be buried in France and as nearly a million French people gathered in Paris for his funeral it helped to prove that he was habitually resident in France.
- The decision of the French Court
After studying the arguments from each side, the French Court decided that the habitual residence of Johnny Hallyday, within the meaning of Article 4 of the European Succession Regulation, was in France.
They initially ruled that the French Court could rule on the entire estate of Johnny Hallyday. This meant that Laeticia could not move all Johnny’s assets into the JPS Trust and that all of Johnny’s children would now receive a share of his estate.
Laeticia launched an appeal and a confidential agreement was reached between her, Laura and David who decided not to pursue the matter any further.
- What does this case mean for anyone with international assets?
This decision goes to show that determining someone’s habitual residence can be very complex and controversial. It also demonstrates that even if you are a rock star, your final wishes may not be carried out if you have not made the right provisions. Anyone with international assets or who lives in several countries needs to plan carefully when it comes to their Will to make sure that their final wishes are carried out and are not open to legal challenge.
If you have assets in multiple jurisdictions and wish to make a Will, it is important that your all your circumstances are examined to avoid complications and possible claims.