Succession is the passing of assets after death to the next generation. As many foreigners who own property in Cyprus may already know, Cypriot Law on Succession was different for Cypriots than it was for non-Cypriots.
The law of Succession relating to Cypriots is based on civil law (similar to France, Greece etc) and it is subject to ‘forced-heirship’ provisions. This means that protected heirs – usually the spouse, children, grandchildren– will have a fixed right to at least a minimum interest in the estate. What this means in practice is that the Cypriot legal system decides who receives the assets when one dies despite of the existence of a will.
On the other hand non-Cypriots basically had freedom to bequeath their assets in Cyprus as they wished in their wills and they were not subject to the ‘forced-heirship’ provisions. This was Article 42 of the Law.
With the very recent amendment of the Law, Article 42 has been abolished! This basically means that ‘forced-heirship’ provisions now apply to everyone!
Everyone who has made a Cypriot Will which does not comply with the ‘forced-heirship’ provisions, that Will shall be invalid where it contradicts the Law. In simple terms what this means is that “protected heirs” will inherit from the Cypriot Estate of non-Cypriots regardless of what their wills say!
A simple example of the new regime is where you have a Husband who is married to his second Wife but has three children from previous relationship/marriage etc. Husband and Wife 2 have purchased a house in Cyprus in joint names (50% ownership each). Husband can no longer simply bequeath his 50% ownership of the House in Cyprus to Wife 2 by making a will as the three children are “protected heirs” and are entitled to their share of their father’s assets.
Matters may be even more complex when it comes to same sex couples and co-habiting couples.
It is unlikely that this change of legislation will reflect most people’s intentions. For this reason, it is strongly suggested that all non-Cypriots who have purchased immovable property in Cyprus should now review their Wills and Estate Planning.
Estate planning is all about making sure your wishes are followed and that your estate reaches your intended beneficiaries. How might you feel if your wishes were not effective? Leaving a valid and up to date will protects your family from added upset and distress after you have gone.
We can help you ensure that your estate goes to your loved ones and not to other relatives. Our firm offers tailor made solutions and can assist with cross border Estate Planning, drafting of Wills and Trusts.