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Cross-border issues

International Succession Laws

Edited by:
David Way and Mark Bridges
Publisher:
Bloomsbury Professional
Publication Date:
January 2023

Trusts under Northern Irish law

N5.11

A testator is free to create a trust in the testator’s will. Many Northern Irish wills create trusts, as do intestacies where a beneficiary is under 18.

A trust is: ‘an equitable obligation, binding a person (who is called a trustee) to deal with property over which he has control (which is called the trust property) for the benefit of persons (who are called the beneficiaries) of whom he may himself be one, and any one of whom may enforce the obligation’ (Underhill’s Law of Trusts).

The person transferring assets to the trustees (either in during lifetime, or by will, or by intestacy) is known as the ‘settlor’.

For a trust to be valid it must meet the requirements of:

  • certainty of words (intention to create a trust);
  • certainty of objects (beneficiaries); and
  • certainty of subject-matter (trust property).

The principal legislation in regard to trusts is the Trustee Act (Northern Ireland) 1958 and the Trustee Act (Northern Ireland) 2001. There are numerous court decisions both in Northern Ireland and in England and Wales which form part of the Northern Irish law of trusts.

On certainty of objects, a Northern Irish trust must be for the benefit of ascertainable individuals, or for a charitable purpose; a trust for purposes which are not charitable under Northern Irish law will not be a valid charitable trust (unless there is a foreign element under the principles set out at para E3: England and Wales at para E3.23 et seq.).

A trust may be made either inter vivos or by will. An inter vivos trust may be created either by the settlor transferring assets to trustees to hold on trust, or by the settlor declaring himself or herself to be trustee of specified property. Where the trust is created by will or intestacy, the personal representatives must, after dealing with the debts and outright legacies of the estate, transfer property to the trustees (who might be themselves) having first obtained a grant of probate or letters of administration.

Most Northern Irish trusts will not last longer than 80 years, or 21 years after the death of an ascertainable individual alive at the commencement of the trust depending upon the terms of the trust instrument. This is known as the rule against remoteness or perpetuity.

Recognition of foreign trusts

N5.12

The law in Northern Ireland is similar to that in England and Wales. Reference should be made to E3: England and Wales at para E3.12.

Use of companies

As executors and trustees

N5.13

A trust corporation or bank or any other limited company which has the appropriate powers in its articles and memorandum of association may be appointed as executor either alone or together with individual executors. Where land is being sold under the Settled Land Acts there must be a minimum of two trustees. Under section 115(1) of the Supreme Court Act 1981, a trust corporation may act as sole trustee.

A partnership (eg, a firm of solicitors) may be appointed to act as executor and co-trustee.

In tax planning

N5.14

As inheritance tax issues are the same throughout the UK, reference should be made to E3: England and Wales at para E3.14.

To avoid non-UK forced heirship laws

N5.15

A Northern Irish person with land in a country which has fixed rights of inheritance (‘forced heirship’ laws) may not be free (under the laws of that country) to dispose of the land by will as that person so chooses. However, if the person has transferred the land to a company, the person then has movable assets (shares) rather than land. It may then be possible (depending on the laws of the country involved and on rules of private international law) that those shares can pass freely under the testator’s Northern Irish will (or the intestacy rules). In a decision as to whether to adopt such a strategy, account will need to be taken of other consequences, particularly tax considerations in both the UK and in the country concerned.

To enable gifts to be made that would otherwise not be valid under Northern Irish law

N5.16

The transfer of assets before death to a holding company in a jurisdiction which has fewer such restrictions than Northern Ireland may validate gifts which would otherwise not be valid under Northern Irish law (eg, for non-charitable purposes or to trusts which may endure longer than allowed in Northern Ireland). As at para N5.15 above, the holding company converts the value of land into movable assets (the shares) so that different rules of ‘essential validity’ (see para N5.18 below) will apply.

Choice of law to govern succession

Formal validity

N5.17

The Northern Irish legal system prescribes similar formalities to those in England and Wales and reference should be made to E3: England and Wales at para E3.17. However, section 9 of the Wills Act 1837 has been repealed by article 5 of the Wills and Administration Proceedings (Northern Ireland) Order 1994 (see para N5.29 below).

Essential validity

N5.18

As the law in Northern Ireland is similar to that in England and Wales, please see E3: England and Wales at para E3.18.

‘Domicile’ is a concept of Northern Irish law, common law and of private international law. In Northern Irish law, domicile means factual residence in a given country combined with an intention to live in that country permanently. In civil law countries, this concept usually means habitual residence, but may be equated to nationality or citizenship in some circumstances.

Intestate succession

N5.19

If a deceased has not made a will he or she cannot have chosen a law to govern succession. The question of which law applies to succession to the estate—depends on whether the estate comprises movable or immovable property.

There may well be situations where two countries will seek to invoke jurisdiction over a testator’s property. Such conflicts are beyond the scope of this chapter and professional advice should be sought in the countries involved.

Movable property

N5.20

Rights of succession to the movable property of an intestate are governed by the law of the country of the intestate’s domicile at the time of the intestate’s death (lex domicilii).

Example N5.1

A French citizen dies intestate and domiciled (meaning, under Northern Irish law, permanently resident) in Northern Ireland. Succession to the French citizen’s movable property is governed by the Northern Irish Administration of Estates Act (Northern Ireland) 1955 (as amended)—without any reference to the law of France.

Immovable property

N5.21

The succession to the immovable property of an intestate is governed by the law of the country in which the immovables are situated (lex situs).

Example N5.2

The same French citizen leaves real estate in Germany. This property will pass according to German laws of intestate succession without reference to Northern Irish or French law.

However, it is possible that the lex situs (eg, Italian law if the land is situated in Italy) may determine that the land should be dealt with under the law of the testator’s nationality—this may, of course, be the UK. This is known as a ‘renvoi’.

Testate succession

N5.22

The distinctions of lex domicilii and lex situs apply to testate succession (ie, where there is a will) subject, again, to any renvoi.

Example N5.3

A will dealing with movable property (wherever situated) made in the Netherlands by a woman domiciled in Northern Ireland (even if resident in the Netherlands) will be valid and administered under Northern Irish law even if it leaves all of the movables to her husband, lover or charity. Under Dutch forced heirship provisions, a fixed proportion of her movable property would have passed to her children irrespective of the terms of her will.

A Northern Irish woman domiciled in France (according to Northern Irish law) at the date of her death is subject to limitations on the disposition of part of her estate. The Northern Irish court will put itself in the position of the French court looking at the case in the context of the French system of internal and international law and takes the view that the French court would apply French succession law to the deceased’s property (the doctrine of ‘double renvoi’: see Re Annesley [1926] Ch 692). The Northern Irish court would allow her executors to deal with her property in the UK but would require them to apply French succession laws in doing so. France has adopted the EU Succession Regulations 650/2012 and accordingly, French law will allow a foreign national to adopt the law of his/her nationality as the appropriate succession law.

Foreign charities and non-charitable purposes

N5.23

As the law in Northern Ireland is similar to that in England and Wales, reference should be made to E3: England and Wales at para E3.23.

Charitable gifts

N5.24

As the law in Northern Ireland is similar to that in England and Wales, reference should be made to E3: England and Wales at para E3.24. However, references in that section to an English charity should be read as references to a UK charity.

Gifts for non-charitable purposes

N5.25

As the law in Northern Ireland is similar to that in England and Wales, reference should be made to E3: England and Wales at para E3.25.

Northern Irish recognition of foreign court orders

N5.26

The law in Northern Ireland is similar to that in England and Wales and reference should be made to E3: England and Wales at para E3.26, substituting Northern Ireland for England.

Movable property

N5.27

The law in Northern Ireland is similar to that in England and Wales and reference should be made to E3: England and Wales at para E3.27, substituting Northern Irish for English.

Immovable property

N5.28

The law in Northern Ireland is similar to that in England and Wales and reference should be made to E3: England and Wales at para E3.28, substituting Northern Irish for English.