CATEGORY: INHERITANCE AND SUCCESSION
A will is a person’s written declaration of his/her intention regarding the way he/she wishes to dispose his/her movable and immovable property following he/she passes away. However, a person’s right to dispose his/her assets through a Will is not absolute and is subject to certain restrictions under Cyprus Law.
Wills and Succession law in Cyprus is governed by both domestic and EU law. In relation to Cyprus law, the most significant enactments are:
a) The Wills and Succession Law, Cap. 195,
b) The Administration of Estates Law, Cap. 189,
c) The Probates (Re-Sealing) Law, Cap. 192,
Moreover, EU law is relevant and specifically Regulation (EU) 650/2012 which allows EU citizens to choose the law of the country of their nationality as the governing law of their will.
a) A Will must be made in writing,
b) The testator must sign the Will at the bottom of the last page and put his/her initials on each and every page of the Will.
c) The testator must sign in the presence of at least two witnesses who will also sign the Will in the presence of each other and the testator.
A Will can be revoked by another Will that will explicitly state that it revokes the previous one. It can also be destroyed by a testator or a person authorised by the testator. A Will is considered to be revoked if the testator gets married or has a first-born child at a time following the execution of the Will.
There are certain restrictions regarding the way assets can be disposed through a Will. More specifically, Cyprus has what we refer to as a “forced heirship regime”, meaning that certain relatives / heirs, such as a spouse or children, cannot be excluded from an inheritance and they have a right to a fixed minimum percentage of the estate.
According to Cypriot law this kind of regime aims essentially to protect the rights of close relatives of the testator. The part of the property that the testator can dispose of with a Will is referred to as “disposable portion”. The remaining property is referred to as “statutory portion”. The calculation of both the disposable and statutory portion depends on who the surviving relatives at the time of death are.
a) Where a person passes away, leaving spouse and a child, or spouse and descendant of a child, or no spouse but a child or descendant of a child, the disposable portion must not exceed one-fourth of the net value of the estate.
b) When a person passes away, leaving spouse or father or mother but no child or descendant of a child, the disposable portion shall not exceed one-half of the net value of the estate,
c) When a person passes away, leaving neither a spouse, nor a child, nor a descendant of a child, nor a father, nor a mother, he/she is free to dispose as he/she wishes all of the estate.
The Will will not be void if such a scenario, but the disposition will be reduced and limited to the disposable portion as per the above.
The remaining portion (Statutory Portion) will be disposed as per the statutory portion which means that the distribution will be made according to the rules of intestacy.
The portion of the spouse is calculated first and then the rest of the estate will be distributed to the relatives of the deceased depending on the degree of kindred. The share of the surviving spouse is as follows:
a) Where the deceased left a child or a descendant of a child, the spouse's share is equal to the share of each child.
b) Where the deceased left no child or descendant of a child but has an ancestor or descendant of an ancestor within the third degree of kindred, the spouse is allowed 50% of the net estate.
c) Where the deceased has left a relative within the fourth degree of kindred, the spouse is entitled to 75% of the net estate.
d) Where the deceased left no relative within the four degrees of kindred the spouse is entitled to the entire net estate.
10. Is it compulsory to make a will?
It is not obligatory to have a will. If someone passes away without having left a will, his/her assets will be distributed in accordance to the rules of intestacy and succession.
11. How is an estate distributed according to the rules of intestacy?
There are four classes of kindred who are entitled to inherit an intestate person:
a) First class: Legitimate children of the deceased and descendants of any of the deceased's children who died during his/her lifetime;
b) Second class: Any parent or sibling of the deceased;
c) Third class: The closest in degree of kindred living ancestors of the deceased. Such as a grandparent;
d) Fourth class: The nearest relatives of the deceased alive at the time of his/her death up to the sixth degree of kindred (i.e. cousin and siblings of grandparents).
12. What happens with immovable and movable property owned by foreign nationals?
Under Article 22 (Choice of law) of the EU Succession Regulation (650/2010), foreign nationals can choose whether the law of their country of nationality applies to the succession of their estate. This applies to all EU states.
For example, Italian nationals with property in Cyprus can opt for Italian law for the administration of their estate in the event of their death and avoid the forced heirship regime altogether. The decision to apply Italian law should be mentioned clearly in the will, as failing to do so will make the Cypriot law of succession applicable by default. However, there are certain exemptions regarding whether a deceased has left movable or immovable property in Cyprus.
For immovable property, the succession is governed by the law of the country where the specific immovable property is situated and Cypriot law will apply regardless of the testator’s domicile country at the time of death (lex situs).
For movable property, if the deceased has mentioned clearly in his/her Will the decision to opt for the law of their domicile country, the law of that country will prevail over the distribution of movable property. If not, the Wills and Succession Law will apply.
13. Are there any tax obligations?
There is no inheritance tax in Cyprus as the Estate Duty (Amending) Law 2000 has been abolished concerning any person who passed away after the 1st of January of 2000. It must be noted though that domiciles of other countries may be liable to pay inheritance tax in their countries.
Author: Andreas M. Damianou