Forced Heirship in New York

Forced heirship refers to rights under testamentary laws which limit the discretion of a decedent to distribute assets under testamentary document upon death. Forced heirship laws are most prevalent in civil law jurisdictions and in countries applying Islamic law (Sharia); these include major countries such as France, Germany, Saudi Arabia, Iran, and Japan and provinces e.g., Quebec and Louisiana. Most countries’ forced heirship laws protect what is known as the reserved share.

Forced Heirship in the United States

Most jurisdictions in the United States do have a form of forced heirship in the form of an elective share right for spouses – typically one-third of the decedent’s estate.  To see surviving spouse rights in a particular state, go here.

Nine states in the United States have a form of community property, under which the rights of surviving spouses are protected.  Some states also have a form of forced heirship regarding the primary residence of the decedent.  For example, in Florida, surviving spouses and minor children have forced heirship rights to a Florida homestead.

But civil law countries and countries applying Sharia law go much further than anything in the United States in terms of forced heirship – the primary beneficiaries of which are the descendants of the deceased.

Forced Heirship in Civil Law Countries

The civil law is a legal regime used throughout most of the world.  It was established in 1804 in France, and is often referred to as the Napoleonic Code.  The other major body of law used throughout the world is known as the common law, which developed as a series of judicial decisions in England, subsequently codified.  The United Kingdom and its former colonies use some form of common law, including the United States and Canada.  (Interestingly, Louisiana has elements of civil law in its jurisprudence, given its history as a French colony.)

Civil law jurisdictions typically apply some form of forced heirship far beyond anything found in a common law jurisdiction.  Under French civil law, domiciliaries of France and owners of French real estate (known as immovables) are bound by the French forced heirship laws.  In typical forced heirship terminology, a portion of the estate is mandated to go to certain heirs, which is known as the “legal reserve,” or “réserve héréditaire.”   The remainder of the estate is freely deviseable.

The basic regime in France is that, if the decedent had one child, that child receives one-half of the estate.  Two children split two-thirds of the estate, and three or more children split three-fourths of the estate.

Some civil law countries apply forced heirship rules not solely on residency, but also on citizenship.  Under German law, for example, a German citizen residing in the United States is subject to the German forced heirship regime.

Conflict Between Countries on Forced Heirship

It is pretty easy to imagine complex scenarios where the forced heirship rules would make a tangled mess.  As an example, consider a German citizen who lives in Belgium with real estate in Belgium, France, and Italy.  Which forced heirship regime applies to which properties?  What if the rules of each country are in conflict with one another?  To address this problem, the EU adopted the European Succession Regulation, in 2015, which provides a framework for determining which state’s laws apply to the estate of a European decedent.  Essentially, the inheritance laws of the country where the decedent habitually resided will govern the estate (with lots of exceptions, of course).

There is no such set of universal rules that govern disputes between countries outside of the EU regarding inheritance rights.  The differences between civil law and common law countries highlight how these differences play out in practice.  There is no obligation of a jurisdiction in the United States to follow the law of a foreign country as it relates to assets located within its borders.  But neither is there a general or universal prohibition on following the law of a foreign jurisdiction.  Therefore, each state has had to figure out how to handle these choice of law questions.

Forced Heirship in New York

The United States is, of course, not bound to follow any particular foreign inheritance law as it applies to assets in the United States.  Indeed, there is no Federal legislation that would govern the conflict of law between a particular state’s laws and the laws of a foreign country as it relates to inheritance matters.  Instead, each state has developed its own law regarding how to handle a dispute between its own inheritance laws and that of a foreign country.  New York seems to have the most developed law on the subject.

The New York Estates, Powers and Trusts Law §3-5.1 (h), provides that a person not domiciled in New York may elect to have New York law apply to any property located in New York.

(h) Whenever a testator, not domiciled in this state at the time of death, provides in his will that he elects to have the disposition of his property situated in this state governed by the laws of this state, the intrinsic validity, including the testator’s general capacity, effect, interpretation, revocation or alteration of any such disposition is determined by the local law of this state. The formal validity of the will, in such case, is determined in accordance with paragraph (c).

So, a citizen and resident of France can open a bank account in New York, state in her will that New York law applies to the New York bank account, and New York will not apply forced heirship to the New York bank account.  (There may, of course, be ramifications as to how the estate is handled back in France in terms of making adjustments to account for the New York bank account.)

The seminal case addressing the application of forced heirship in New York is the case of Matter of Renard, 108 Misc. 2d 31, 437 N.Y.S.2d 860 (N.Y. Surr. Ct. 1981).  The decedent, a French citizen,  lived and worked in New York City for many years and opened a bank account and a brokerage account in New York.  She then moved back to France, where she died.  She executed a will in Paris stating that she wanted New York law to control her assets, as follows:

I hereby declare that I elect that this Will shall be admitted to original probate in the State of New York and shall be construed and regulated by the laws of the State of New York, and that the validity and effect thereof shall be determined by such laws

The decedent’s son claimed forced heirship rights on the New York assets.  In ruling against the son, the court reasoned as follows.

On the basis of this [legislative] history, it would seem necessary to conclude that the Legislature intended subdivision (h) to permit a decedent, in a case like the one before the court, to avoid the application of the French law of forced heirship to her personalty by invoking New York law in her will.

The conflicting policies here are New York’s interest in the freedom of testamentary disposition, under which a child’s claim is protected only in very limited situations not relevant here, and France’s policy of narrowly circumscribing testamentary freedom in favor of descendants. Nor does the law of California, where the son resides, support forced heirship by children. Of all United States of America jurisdictions, only Louisiana follows the forced heirship policies of the civil law. One day a uniform law, or State-by-State laws, may adopt a protective rule for infant children of decedents to continue support during infancy, rather than forced heirship, after the parent’s death. (See Matter of Alexander, 90 Misc.2d 482, 486, affd. 63 A.D.2d 612. ) It has been suggested that the fundamental purpose of forced heirship systems is the protection of descendants residing in those jurisdictions. (Yiannopoulos, Wills of Movables in American International Conflicts Law: A Critique of the Domiciliary “Rule”, 46 Cal L Rev 185.) In any event, France’s interest in having its policy implemented, if any, is attenuated here by the fact that the decedent’s son was a resident of California when she died, and has remained such. (Cf. Neumeier v. Kuehner, supra; Matter of Crichton, 20 N.Y.2d 124, supra.)

It seems to this court that the domestic policy of testamentary freedom from forced heirship claims should prevail under the circumstances of this case, in the light of the decedent’s long residence in New York and respondent’s nonresidence in France. The son cites no case enforcing a descendant’s forced share in these circumstances and the court does not believe that this case presents sufficient cause to apply French law. (See Cheatham and Reese, Choice of the Applicable Law, 52 Columbia L Rev 959.) Accordingly, the court holds that even if subdivision (h) were not controlling the paramount interest test for choice of law established in Matter of Clark ( 21 N.Y.2d 478, supra) sanctions the application of New York local law in this case.

Civil law forced heirship regimes include not only assets owned by the decedent at death, but also inter vivos gifts (which can be used to adjust the shares of beneficiaries or even claw back assets into the estate). In In Re Meyer, 876 N.Y.S.2d 7 (2009), the decedent’s son attempted to claim forced heirship rights on $33 million gifted during her lifetime.  The decedent was a French citizen who lived in New York prior to her death.  In rejecting the son’s forced heirship claims, the court reasoned as follows.

[F]orced heirship provisions of a civil law jurisdiction like France are inapplicable to inter vivos transfers of property executed in New York, irrespective of whether the transferor’s domicile was New York or France. This is because the validity and effect of these transfers, as well as the capacity to effect them, are governed by the law of the state where the property was situated at the time of the transfer.

We perceive no valid policy distinction that would allow a nonresident testator to avoid French forced heirship claims by invoking New York law with respect to assets physically situated in New York, but not with regard to previous inter vivos transfers of assets physically situated here. On the contrary, the policy rationale permitting testamentary freedom from forced heirship rules should also prevail with equal force to inter vivos transfers.

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