Estate Planning for International Families: Protecting Heirs Across Borders

For High-Net-Worth Individuals (HNWIs) in Europe, holding a diverse portfolio of passports is a symbol of global mobility and freedom. However, when it comes to passing down wealth, a collection of mixed-nationality heirs often triggers a regulatory and fiscal nightmare.

When a family holds multiple European citizenships, their estate is caught in the crosshairs of conflicting legal systems, aggressive tax jurisdictions, and complex pan-European regulations. Without a proactive strategy, your legacy risks being heavily taxed, frozen in multi-year probate battles, or distributed against your explicit wishes.

The Collision of Civil Law and Common Law

The fundamental challenge for mixed-nationality European families is the ideological divide between continental civil law and Anglo-Saxon common law.

• Forced heirship vs. testamentary freedom: If you hold citizenship or residency in civil law jurisdictions like France, Germany, Spain or Italy, you face strict forced heirship rules. These laws mandate that a fixed percentage of your estate must go to specific statutory heirs, usually your children. This directly clashes with common law jurisdictions (like the UK or Ireland), which grant testamentary freedom, allowing you to leave your wealth to whomever you choose.
• The treatment of trusts: Common law trusts are highly effective wealth preservation tools. However, civil law countries often do not recognize the concept of a trust. Countries like France or Spain may look through the trust structure entirely, treating distributions to heirs as direct inheritance and applying punitive tax rates that can exceed 60%.

Harnessing Brussels IV (EU Succession Regulation)

For families tied to the EU, the single most powerful tool to combat legal fragmentation is Regulation (EU) No 650/2012, widely known as Brussels IV.

• The default rule: Under Brussels IV, the law applicable to your entire estate is the law of the country where you have your habitual residence at the time of death. If a German citizen dies while habitually resident in Spain, Spanish succession law (and its specific regional forced heirship rules) will govern their global estate.
• The choice of law clause: The regulation allows a critical exemption. You can explicitly choose the law of your nationality to govern your succession instead of your habitual residence. If you possess multiple citizenships, you can select the law of any of those nations.
• The strategy: A multi-passport HNWI can use a choice-of-law clause in their Will to opt into a legal framework that matches their goals. For example, a dual Spanish-British national living in Spain can choose English law to govern their estate. With careful preparatory work, this may then enable them to effectively bypass Spanish forced heirship laws, giving them the freedom to structure their legacy as they see fit.

Note: While Brussels IV harmonises succession law (who gets what), it explicitly does not harmonise tax law. Choosing English law will alter how your assets are distributed, but it will not stop Spanish tax authorities from levying inheritance tax on Spanish residents.

Navigating the Multi-Jurisdictional Tax Trap

Mixed-nationality heirs frequently inadvertently trigger double or triple taxation. European tax authorities determine inheritance tax liability based on three distinct triggers:

• Domicile, nationality or residence of the deceased: Countries like Germany levy inheritance tax based on the German citizenship or domicile of the testator. Before 6 April 2025, UK inheritance tax was largely based on a person’s domicile status. Since then, a new residence-based regime has applied, meaning that inheritance tax exposure depends on whether the individual was a long-term UK resident for tax purposes when they died.
• Residency of the heir: Countries like Spain and Germany tax the inheritance based entirely on the residency of the beneficiary. If your daughter holds a Spanish passport and lives in Madrid, she will face Spanish succession tax on everything she inherits, regardless of where you lived or where the assets are located.
• Situs (location) of the assets: Virtually all European nations claim the right to tax physical assets (like real estate or private business shares) located within their borders.

If a dual UK-German national dies in London, leaving a villa in Portugal to a son residing in Spain, four different tax jurisdictions will instantly look at the transaction.

Because comprehensive bilateral estate tax treaties are surprisingly rare within Europe, avoiding this trap requires a careful combination of foreign tax credits and unilateral relief mechanisms to ensure your heirs do not pay tax twice on the same Euro.

Key Structuring Strategies for Multi-Passport Families

To shield mixed-nationality heirs from administrative delays and predatory taxation, HNWIs must move away from single-country planning.

• Draft multijurisdictional Wills: A single “global” Will is a recipe for disaster. It often causes administrative gridlock as courts in different countries argue over its validity. Instead, draft separate, localised Wills for each jurisdiction where you hold significant assets (e.g., a Spanish Will for Spanish property, an English Will for UK assets). It is vital that these Wills are coordinated by cross-border experts to ensure they do not accidentally revoke one another.
• Utilise civil Law foundations: Since Anglo-Saxon trusts face severe tax penalties in continental Europe, consider utilising European corporate structures or foundations (such as a Liechtenstein Stiftung or a Dutch STAK). These entities are generally better understood and more favourably taxed by civil law authorities while still offering robust asset protection and succession control.
• Hold real estate via a corporate entity: Instead of holding European real estate directly in your own name—which triggers immediate local probate and situs tax—consider holding property through a corporate structure, such as a French Société Civile Immobilière (SCI). This converts a physical immovable asset into movable corporate shares, which can completely alter how succession and tax laws apply to your heirs.
• Work with specialist cross-border advisers: The Burnside Partnership can help identify where UK succession planning interacts with European forced heirship, local probate rules and inheritance tax regimes, ensuring each document and structure is designed as part of one coherent international plan rather than a series of disconnected local arrangements.

Action plan

Protecting a multicultural, multi-passport family requires a highly customized blueprint. True security is achieved through a three-step process:

1. Map the global footprint: Conduct a comprehensive audit detailing the exact citizenship, domicile, and habitual residence of the testators, alongside the residency of every expected heir.
2. Align assets to heirs: Match the location and structure of your assets to the tax residency of the specific heir who will receive them.
3. Execute cross-border coordination: Ensure your legal counsel in each country works in unison, crafting a cohesive strategy where Brussels IV elections, localised wills, and corporate structures complement rather than contradict one another.

In the modern European landscape, mobility is an asset, but uncoordinated estate planning is a liability.

The Burnside Partnership can help you review your family’s international footprint, identify succession and tax risks, and create a coordinated plan that protects your wishes and gives your heirs clarity.

If you or your family have assets, citizenships or beneficiaries across more than one country, contact Lanka Bandara at lanka.bandara@theburnsidepartnership.com to discuss how we can help you put the right cross-border estate planning arrangements in place.

This article is intended as general information only and does not constitute legal advice. Individual circumstances should always be considered.