Oct 13, 2015

Important change to the law on Wills in Cyprus

There has been a change in the law in Cyprus on Wills which may have an impact on the way that your Cyprus estate will be distributed by your Will.

Until recently, British people who own assets in Cyprus have been able to make a Will which distributes their Cyprus estate according to their wishes and free of the restrictions of the Cypriot system of forced heirship, which dictates that certain family members are entitled to a certain share of an estate, irrespective of the provisions of a Will.

However this concession, known as section 42, was removed from Cyprus law on 3rd July 2015 and now everyone who owns property assets in Cyprus will be subject to the system of forced heirship on those property assets.

For example, when someone dies leaving a spouse and/or children (or descendants) living, the surviving spouse and/or children will be entitled to inherit an equal share of 75% of the Cypriot estate. The provisions of the Will only apply to the remaining 25%.

It is unlikely that this system will suit many, especially couples and people who have been married before, as it gives natural children a right to inherit a share of their parents’ estate, even if their parents spouse is still alive. It also makes no provision for a step child to inherit a share of an estate left to their step parent by their natural parent.

For people who are British nationals (hold a United Kingdom Passport) there is a solution in a new EU regulation on succession (referred to as Brussels IV) which came into effect on 17th August 2015. Although the United Kingdom opted out of the EU regulation, it allows every citizen (including a non EU citizen) who owns assets in any EU country (except the United Kingdom, Eire and Denmark ) to declare in a ‘testamentary declaration’ whether the law of their nationality or whether the law of their habitual residence applies to the distribution of their estate.

Therefore a British national can make a declaration that they wish the laws of their nationality to apply to the distribution of their assets in Cyprus – which will mean that the Cypriot laws on forced heirship will not apply.

This declaration can be made in a Codicil and Willpower are providing a template of the Codicil, with instructions on how to complete it, free of charge to all of our clients. If you are a client of Willpower and have not received information about the free Codicil, please contact us.

Alternatively the declaration can be made in a new Will and Willpower are offering to draw up an amended Will for their clients to include the necessary declaration at half of the normal cost of making an amendment to a Will - £70 for a single Will, £100 for a double/mirror Will. If you are a client of Willpower and would like to arrange for your Will to be updated to include the necessary declaration (and any other changes required) at the discounted rate, please contact us.

For people who are not clients of Willpower, we are able to draw up a new Will containing the necessary declaration at our normal rates which can be found here, please contact us.