Monaco Adopts a New Code on Private International Law

Monaco real estate has recently been the subject of some significant changes in property law. Specifically, Law No. 1.448 on private international law was modified in June 2017 to align Monaco’s inheritance law with the European Union’s Regulation 650/2012. This innovative law was established to simplify and unify the international private law, adapting to the increasing internationalisation of families and their assets. The laws of succession work very differently now, but they make the Principality an even more attractive prospect for international investors looking at Monaco property for sale.

Monaco Real Estate

What is Law No. 1.448?

The new law concerns inheritance and has established that a single succession law should apply to the entire succession regardless of the nature of the assets involved. Residents of Monaco can now choose to adhere to the law of their nationality to govern his/her estate (movable and immovable) rather than defaulting to Monegasque law as the rule of last domicile.

In a departure from the previous system of scission, the single law of the domicile of the deceased at the time of his/her death applies to any national or international succession. Consequently, the domestic national succession law takes precedence.

Residents can benefit from the freedom of disposition in accordance with his/her national law. This avoids or limits estate disputes under the law of domicile. This new law also brings Monaco’s residents in line with the EU’s European Succession Regulation (“Brussels IV”), which harmonises certain conflict of law issues.

Until now, Monaco real estate was always subject to Monaco law; now Monaco’s notaries will adhere to foreign laws unless expat residents do not specify their national law. In that instance, the law of domicile will apply, which in most cases will be the law of Monaco. If expat residents choose their own nation’s law, this selection must be made in writing.

LCPM Monaco Real Estate Fontvieille

What about trusts?

Monaco’s Law 214 on trusts remains in force. Established in 1936, Law 214 ensures Monaco residents can avoid forced heirship by establishing trusts under the national law while respecting Monegasque formalities. The trust law is subject to tax on all property in Monaco and elsewhere (16% tax as well as the 1.5% notarial fee).

The recent changes have caused some residents to disregard appropriating their national Succession law to themselves via potential Will Trusts under Law 214. Now, election in a will is straightforward, but for those who want to establish testamentary trusts, it is still advisable to follow Law 214.

Besides inheritance, what else does the new law affect?

The new law makes it easier to recognise foreign decisions in the outcome of disputes or issues while residing in Monaco. The new Code on Private International Law also applies to the status and capacity of natural persons, marriage, divorce, parentage, maintenance obligations, contractual and non-contractual obligations.

Regarding matrimonial matters, the Code strengthens the principle of freedom of matrimonial agreements concluded before and after the marriage. It also allows spouses to choose their preferred law in the event of divorce or legal separation before or during the marriage.

The provisions of the new Code on Private International Law apply to all pending and future legal situations. It is imperative for individuals of all nationalities to consider the impact of this new legislation on their existing estates and financial arrangements. If you have any questions about how this affects potential investment in Monaco real estate, please contact La Costa Properties Monaco.

For more information on these properties call +377 97 97 99 00 or contact us using the form below.