Lithuania: Question on inheritance matter referred to the ECJ

The Supreme Administrative Court of Lithuania has referred a question on inheritance law to the ECJ for a preliminary ruling. The case, driven by bnt, could have huge implications for European cross-border inheritance law.

The proceedings before the Supreme Administrative Court involve an inheritance case under German law, whereby the object of inheritance is a property in Lithuania. The legal basis for this is Regulation No. 650/2012 (Succession Regulation). This should actually simplify cross-border inheritance cases by having the inheritance proceedings take place in only one member state. However, German inheritance cases involving real estate located in Lithuania have led to numerous conflicts that have not yet been resolved.

In the underlying proceedings, the inheritance proceedings were correctly conducted only in Germany because the deceased had his last habitual residence here. Although the estate also included a property located in Lithuania, no second inheritance proceedings could be opened in Lithuania under the Succession Regulation. The Lithuanian property also became part of the German inheritance proceedings. However, according to Art. 1 (2) lit. l) of the Succession Regulation, the entry of the change of ownership has to be made in the Lithuanian land register and according to Lithuanian law. This is where the problems begin.

In order for the heir to be able to prove his status to the land registry for this purpose, Article 62 (1) of the Regulation introduced the European Certificate of Succession, which is issued for use in another Member State and has effect in that Member State as proof of succession.

However, according to Art. 23 (4) of the Law on the Real Estate Register of the Republic of Lithuania, the Lithuanian Land Registry requires that the specific real estate be clearly identified in the certificate. Specifically, it requires the indication of the address as well as the so-called Unikalus No. (unique number of the property). Without this information, the land registry has so far refused any registration.

There is an as yet unresolved conflict between German inheritance law and Lithuanian land register law. The reason is the practice of German probate courts, which (as with the German certificate of inheritance) do not enter the real estate in the European Certificate of Inheritance, but only the inheritance quota. An indication of the property, as required by Lithuanian land register law, is not made in this way. According to the current state of affairs, it is not possible to register the change of ownership without indicating the real estate in the certificate of inheritance.

In the present case, the situation was taken to absurdity, as the heir was the sole heir. Although it is obvious that he inherits 100% of the estate, which logically includes the real estate, the German probate court could not be convinced to enter the real estate in the probate certificate. The Lithuanian land registry also refused to transfer the property.

Actually, the authorities of both countries would be obliged to cooperate in this matter. The authority issuing the certificate, i.e. the German probate court, should observe the formalities prescribed for the registration of immovable property in the Member State where the register is kept (i.e. Lithuania) (recital 68 of Regulation (EU) No 650/2012). The Regulation clearly provides for an exchange of information between Member States on these formalities. However, both the German (with exceptions) and the Lithuanian authorities involved stuck to their legal opinion, according to which the Succession Regulation allegedly left them no room for manoeuvre to resolve the conflict so far.

Since this conflict also exists in a similar form in other CEE countries (including the Czech Republic, read more here), it can be assumed that the ECJ’s decision will have a fundamental character for European inheritance law.

Under certain circumstances, bnt has succeeded in circumventing the certificate of inheritance by means of a complex construction, but this was certainly not intended by the European legislator in this form (see here). Therefore, if you already have questions about inheritance proceedings with an international connection pending the ECJ’s decision, we will be happy to assist you.

Source:

Decision of the Supreme Administrative Court of Lithuania of 2 June 2021, Administrative Procedure No. eA-2540-662/2021; Regulation (EU) No 650/2012; Law on the Real Estate Register of the Republic of Lithuania; Munich Higher Regional Court, Order of 12.09.2017 – 31 Wx 275/17

 

 

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