Rosemont International

Rosemont Picto Latest news

New law triggers simplicity and efficiency
09/11/2017

After a long gestation period the Principality has finally adapted its International Private Law to provide choice and clarity for international families. The new law n° 1.448 was voted on June 28th and has for purpose to recast the international private law in Monaco and has been generally well received by Monaco professionals. Its scope of application is large since the law deals with family law as well as obligation rights or more general rules of judicial competences. This innovative law aims to simplify and unify the international private law.

 

This reform also allows Monaco to offer a stable and modern legal framework conform to the increasing internationalization of families and their assets. It is now an important aspect of the attractiveness of the Principality.

 

The main innovations of this law regarding family law concern the rules for jurisdictional competences, matrimonial regimes as well as international successions.

 

Principles in matter of succession

 

With this respect, Monaco abandons its conflict of law rules which established a distinction depending on the nature of the assets. From now onwards the law established that a single succession law should apply to the entire succession regardless of the nature of the assets and their situation.

 

Thus, the succession is governed by the law of the state in which the deceased had their domicile at the time of death. It is important to note that these same criteria were adopted in the European Succession Regulation (Regulation No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters) which harmonises certain conflict of law issues. So Monaco will apply the same rules as the EU member states which have adopted Brussels I.

 

Similar rules operate in other jurisdictions. Russia for example uses the same criteria of domicile in order to designate the law which will govern the settlement of the succession. However, the Russian conflict of law rules provide for an exception to the application of this criteria, in reserving for the immovable assets the law of the localization of the real estate.

 

Examples of succession for Russian people

By virtue of these rules, for a Russian citizen and resident who owns a property in Monaco, the law which governs the transfer of this real estate will be the Russian law. With this new Monegasque regulation, in this case, we have a conflict of laws because Russian conflict of law rule designates Monaco succession law to settle the Estate. However, even though there is such a conflict of law, the Principality doesn’t take it into account because by virtue of its conflict of law rule the domestic law of the designated State is directly applicable without analysis of the conflict of law of this country (as a consequence “le renvoi “ is excluded by this new Monaco regulation). In consequence, the Monaco notary who will have to effectively organize the transfer of the Monaco property to the heirs will do this according to Russian succession law provisions. It will imply delays as an official opinion from a Russian professional will be necessary to guide the Monaco notary regarding the Russian law.

 

Contrarily, both Russian and Monaco conflict of law rules will consider that the succession of a Russian national resident in Monaco who owns a real estate located in Monaco will be subject to Monaco succession law. The Monaco law is considered to be applicable from the Principality’s point of view because it is the domicile of the deceased person and from the Russian standpoint due to the fact it is the law of the real estate’s localization.

 

For the immovable assets located in Russia, there will be a conflict of law between Monaco and Russia, because Russia will automatically apply its national law to transfer the property whilst Monaco conflict of law rules will apply the law of the last residence of the deceased (i.e. Monaco law if he was resident in Monaco at the time of his/her death). It may trigger different rights for the heirs and potential litigation could result from this conflict.  It will be necessary to discuss and plan this in advance by using various estate planning’ tools (for example the real estate could be transferred to a company or a gift could be organised).

 

Professio Juris

 

This is another important innovation included in the new Monaco International Law. The deceased may choose the law applicable to their succession. This choice is limited to the law of a state of which the deceased has the nationality at the time of the choice. As a consequence, the Russian citizen domiciled in Monaco will be able to choose the Russian domestic law in order to settle his succession.

With this respect, it will be necessary to draft a Will mentioning the choice to be applicable to the Estate.


 

It should be noted that due to the fact that the professio juris is not recognized in Russia, the movable assets located in this State could not be transferred by application of the Russian law.

 

Rules for judicial competence

The Monaco Private International Law indicates new conflict of law rules to determine the Courts competence. Those rules allow a simplification of conflicts in terms of international private law.

Thus, in terms of succession, Monegasque courts are competent regardless of the domicile of the defendant when the succession is opened in the Principality or when the succession includes immovable property located in Monaco.

The law provides for the possibility for the parties to a dispute to establish “une élection de for”, which means they can choose the jurisdiction which will be competent to resolve the dispute.

Hence, it is important to have an international approach of these issues taking into account this new conflict of law rules as well as those in force in Russia.

We are very experienced in assisting clients in matter of estate planning in the most tax efficient way possible and would be delighted to help you or your family.

For any enquiries in worldwide tax and inheritance planning and for French or Monaco tax residence planning, do not hesitate to contact Cécile Acolas, partner at c.acolas@rosemont.mc

 

 

This article is published in issue 23 of MONACO БИЗНЕС (Monaco Business) Magazine -

https://issuu.com/monacobusinessmagazine/docs/monaco_business_n__23 

 

Rosemont Consulting SARL assists clients to achieve their estate planning objectives through other alternative legitimate compliant structuring of their assets. Please feel free to contact us.

For further information on Rosemont Consulting SARL and services provided please visit www.rosemont.mc