International Successions: European Union vs. Mercosur

Many individuals spend their lives building wealth with the expectation of passing it on to their loved ones upon death. However, where connections exist with more than one country, a key question arises: to what extent are we truly free to dispose of our estate as we wish?

• How much freedom does a person actually have to dispose of their estate?
• Is domicile, nationality, or the location of assets more relevant?
• Can a single passing give rise to multiple succession proceedings across different jurisdictions?

These questions arise frequently in increasingly international personal and estate-planning contexts. This article provides a concise overview of the structural differences between the succession regimes of the European Union and Mercosur, with particular focus on France and Argentina, in order to highlight the practical implications each system may have for the transfer of estate.

The European Union has developed a comprehensive regulatory framework to address international succession. Its cornerstone is Regulation (EU) No. 650/2012 [1], which establishes uniform rules designed to provide greater predictability, reduce costs, and avoid proceeding fragmentation.

The Regulation set a clear and coherent logic based on several key principles:

• A single law governs the entire succession, even when assets are located in multiple countries. This avoids parallel proceedings and reduces both time and costs significantly.
• The applicable law is that of the State in which the deceased had their habitual residence at the time of death.
• The individual may choose the law of their nationality (or none of them, in case of multiple nationalities).

Decisions in probate matters, as well as the European Certificate of Succession (ECS) [2], are recognized and enforceable across Member States without the need for additional procedures.

Subsequently, Regulation (EU) No. 2016/1103 was adopted, establishing a framework of enhanced cooperation in governing jurisdictions, applicable law, and the recognition and enforcement of decisions relating to matrimonial property regimes.

This Regulation:

• Provides a harmonized legal framework for couples owning cross-border property, facilitating asset management and enhancing legal certainty.
• Defines matrimonial property regimes autonomously, encompassing mandatory, agreed, and supplemental rules.
• Establishes clear conflict-of-law rules, allowing spouses to anticipate which law will govern their property regime, generally prioritizing the law with which they have a close connection. Such law applies to the entirety of their estate, regardless of its nature or location, including those assets situated outside the European Union.
• Recognizes the creation or transfer of rights over assets, although it does not require Member States to recognize rights in rem unknown under their domestic legal systems.

Article 1 of the European Regulations on succession and matrimonial property regimes expressly defines their scope and sets out a number of matters that fall outside their application.

By way of example, the Regulations do not apply to:

• tax, customs, or administrative matters relating to successions;
• legal capacity of individuals;
• registration of rights in movable and immovable property with public registers;
• other formal or administrative matters.

These issues continue to be governed by the domestic law of each State. As a result, even with a harmonized system such as that of the European Union, certain key aspects will remain subject to local legislation of the relevant State.

A distinctive feature of the French succession system is that, in the absence of disputes, the process is handled primarily by a notary rather than by a judge, unlike in jurisdictions such as Argentina.

In practice, this notarial approach generally results in:

• greater efficiency in the administration of the succession;
• reduced litigation, as consensual solutions are favored;
• in many cases, more predictable costs for heirs.

However, succession costs in France are quite high. France levies inheritance tax under a progressive system, with rates depending on the degree of kinship and the value of the inherited assets [3]:

• The surviving spouse and registered partner (PACS) are fully exempt.
• For direct descendants, rates range from 5% to 45%, depending on the value of the inheritance.
• For collateral heirs up to the fourth degree, the applicable rate is 55%.
• Where the estate is inherited by unrelated beneficiaries, the tax burden may reach up to 60%.

In addition, France has entered into double taxation treaties in respect of inheritance, which is particularly relevant when the estate is located in multiple jurisdictions.

Unlike the European Union, Mercosur does not have a uniform framework specifically governing international succession among its Member States.

However, most Mercosur countries are parties to the Montevideo Treaties on International Civil Law of 1889 and 1940, which contain private international law rules applicable to probate matters.

The system established by these treaties differs fundamentally from the European Union model. Under these instruments:

• Each State has jurisdiction over assets located within its territory.
• Judges apply their own domestic law, in accordance with the so-called “principle of parallelism” (judge and law of the same State).
• Where the deceased leaves assets in multiple countries, parallel probate proceedings must be initiated in each jurisdiction.

For instance, if a deceased individual holds assets in Argentina, Uruguay, and Paraguay, three separate probate proceedings will be required—one in each country where the assets are located.

From a practical standpoint, this system is inefficient, as it requires multiple proceedings, resulting in duplication of time, costs, and efforts.

However, it offers a relevant operational advantage: registrable assets are processed directly in the country where they must be registered, simplifying procedures and avoiding conflicts of adaptation between different legal systems.

It should also be noted that the Montevideo Treaties do not regulate the substantive aspects of probates. Their scope is limited to determining jurisdiction and applicable law, leaving all other matters—such as forced heirship, taxes, formalities, and deadlines—to domestic legislation.

When the deceased leaves assets in countries outside the Mercosur, Argentine law addresses the matter through the Civil and Commercial Code (CCC), which introduces more modern rules on international probates.

In general terms, the Argentine system provides that:

• The law of the deceased’s last domicile applies.
• With respect to immovable property located in Argentina, Argentine law applies mandatorily, regardless of the deceased’s last domicile.
• Jurisdiction lies with the courts of the deceased’s last domicile.
• Heirs may choose to initiate probate proceedings in Argentina exclusively in respect of immovable property located in the country. In such cases, Argentine courts will have jurisdiction only over those assets and will not rule on the remainder of the estate.

This approach reflects a historical view that prioritizes immovable property as the principal asset of the estate, although it does not always align with current realities, where other assets—such as equity interests, financial assets, or foreign investments—may have equal or greater economic value.

In certain circumstances, even where the deceased died abroad, Argentine judges may assert jurisdiction over the entire estate. This exceptional mechanism is known as the “forum of necessity.”

For it to apply, the following conditions must generally be met:

• A denial of justice would otherwise occur because, under the jurisdictional rules of other countries, it is impossible or excessively burdensome to initiate proceedings abroad.
• It would be unreasonable to require the succession proceedings to be initiated in another country.
• There is a sufficient connection with Argentina, for example, because most assets or heirs are located in the country.
• Due process is guaranteed, including with respect to heirs domiciled abroad, who must have initiated succession proceedings or be demonstrably aware of their rights.

The aim is to ensure an effective judgment is sought, given that most assets are located in Argentina and enforcement would take place there.

Unlike France, Argentina does not impose a national inheritance tax. However, certain provinces have introduced taxes on gratuitous transfers of assets, such as the Province of Buenos Aires, where rates range approximately from 1.6% to 9.5%, depending on the value of the assets and the degree of kinship of the heir.

Beyond taxation, succession proceedings in Argentina involve additional factors that may significantly increase costs:

• Succession proceedings must be brought before a judge, which entails the payment of court fees.
• Attorneys’ fees are incurred, typically based on the value of the estate and the duration of the proceedings.
• In international successions, costs increase substantially where proceedings must be coordinated across multiple jurisdictions.

The key difference between both systems is clear and reflects two distinct legal approaches to international successions.

• In Europe, the model promoted by the European Union emphasizes harmonization and predictability. Through common rules applicable across Member States, it seeks to simplify succession proceedings where there is no dispute and to avoid fragmentation. In more complex cases, it allows for unified decisions and facilitates cross-border recognition.
• In the Mercosur, by contrast, priority is given to the courts of the place where assets are located, applying the domestic law of each State. This approach reinforces national sovereignty but results in multiple succession proceedings where the estate is spread across different jurisdictions.

This structural difference is clearly reflected in the jurisdictions analyzed:

• France: In the absence of disputes, successions can be handled by a notary without judicial intervention, resulting in greater efficiency and predictability. The trade-off is a significant tax burden, particularly where heirs are not the surviving spouse or registered partner.
• Argentina: The system is more formalistic and court-driven, requiring judicial intervention and legal representation even in straightforward, uncontested cases. While there is no national inheritance tax, costs and timelines can be substantial, particularly in international successions.

In an increasingly globalized world, failing to plan for international succession can result in higher costs, unnecessary delays, and avoidable conflicts.

Anticipating the inevitability of death allows individuals—where permitted by law—to choose the applicable legal framework, structure their estate efficiently, coordinate documentation across jurisdictions, and significantly reduce potential risks arising at the time of death.

In this context, specialized legal advice in international succession matters is essential. A comprehensive analysis—taking into account the location of assets, family circumstances, and the applicable legal frameworks—can make the difference between an orderly process and a fragmented, costly, and prolonged succession.

Our team regularly advises individuals and families with assets across multiple jurisdictions. To discuss your particular situation and explore international succession planning options, please contact WSC Legal.

[1] This Regulation does not apply in Denmark or Ireland, as those countries opted out.

[2] The European Certificate of Succession (ECS) is issued by the competent authority in succession matters and may be used by heirs, legatees, executors, and administrators of the estate to prove their status and exercise their rights or powers in other Member States. Once issued, the ECS is recognized in all Member States without the need for any special procedure.

[3] For further information on inheritance tax in France, visit: https://www.economie.gouv.fr/particuliers/preparer-ma-retraite-et-ma-succession/droits-de-succession-que-devez-vous-payer-sur-votre-part