The legislator in his effort to protect the institutions of marriage and family in Cyprus, he legally ensured that part of the property of a deceased will pass through statutory provisions to the wife and children of the deceased. Any power of attorney issued by the deceased while he was in life is annulled simultaneously with his death and a large share of his property falls into the possession of his children and wife regardless of whether he had the opposite wishes.

The deceased is entitled to freely dispose through a will only the ¼ of his property when he leaves a spouse and children or the ½ of his property in the case where he leaves a spouse without children. The rest of his property must be bequeathed, regardless of his will, to his family members in equal shares.

Trust

The most effective and at the same time the most expensive way to fully dispose of the property according to the wishes of the deceased is to establish a trust which will include specific provisions for the posthumous disposal of his assets. By establishing a trust, the property of the testator is transferred to a third party (usually a lawyer) who owns the assets of an individual and handles them according to the instructions given by the settlor.

Life Insurance

The most common but at the same time limited way of circumventing the statutory provisions provided by the Cyprus Law is life insurance. By concluding an insurance contract, the life of a person can be insured and when the insured risk occurs, the beneficiary of the insurance policy can be any person initially designated by the policy holder. All money resulting from the death of the deceased will be distributed in accordance with the provisions of the insurance contract and will not be included in the inheritance of the deceased.

Join Bank Accounts

Another way to circumvent the statutory provisions that can be applied to an individual’s deposits is to create joint bank accounts of the testator with the person to whom the deposits are to be inherited after his death. In this example the depositor can ensure that the second beneficiary will not alienate of any amount without his knowledge by specifying that any transaction must bear his signature. Upon the death of one account holder, the balance of the account is automatically transferred to the other account holder, and this amount does not constitute part of the inheritance of the deceased.

European Regulation 650/12 and Choice of Law

The European Regulation 650/12 which came into force in our country in August 2015, provides that the people who have citizenship other than the citizenship of the Member State in which they are habitually resident, may choose, by will, that the applicable law governing their succession shall be the law of their country of citizenship. This may be particularly useful in cases where the law of the country of citizenship does not provide for statutory provisions, as for example the law of England or Russia. By choosing the law of their country of citizenship they can freely dispose of all their property within the European Union.

Purchase of Immovable Property

As a rule, immovable property located outside the European Union is distributed according to the provisions of the law of the country in which it is located. This is also defined by the principle of international law lex loci rei sitae. Therefore, the purchase of land in a country where the law allows the full disposal of property, in combination with the drafting of a will, can substantially circumvent the provisions for statutory provisions.

In the light of the above, the Cyprus Inheritance Law was established several decades ago, when in many legislations dogmatic perceptions prevailed which reflected the wider context of that era. Today, based on the framework of Succession Law as it has been formulated, estate planning solutions are offered which can ensure that the wishes of an individual will be implemented regardless of the legal statutory provisions.

Author: Christos Tryfonos