一、Background analysis of cross-border testamentary succession
When the Chinese high-net-worth individuals allocate the asset globally, many foreign high-net-worth individuals purchase real estate in China. After living in China for several years, some foreign high-net-worth individuals finally return home. Some of them only purchase real estate as an investment. These people will process and arrange their own property under their own wills in their country, which naturally includes real estate in China. Therefore, they will face the wills made overseas inherit real estate in China. The situation above is also more likely happen to when the Chinese people’s property is still in China after immigration, but the Chinese people and their family have changed their nationality and live abroad, also make a will abroad.
Most of the foreign-related inheritance cases handled by our team are complex and diversified, which can be summarized into two categories: the legal inheritance and the testamentary succession of foreign national’s property in China / the legal inheritance and the testamentary succession of Chinese national’s overseas property. It involves jurisdiction, determination of the validity of the cross-border wills, application of the law to the cross-border inheritance, and so on. In a specific case, it is full of various uncertain factors, and the content is numerous and jumbled, but because of limited space, this article briefly discusses the testamentary succession of foreigners’ real estate in China in some cross-border inheritance cases.
二、Inheritance cases and focus of foreigners’ real estate in China
There are many Inheritance cases of foreigners’ Real Estate in China. Considering that there are two ways of inheritance in China: notarization of inheritance succession, and bringing an inheritance lawsuit to the court, and in order to protect the privacy of the clients, we only list the following two typical cases
Case 1: notarization of inheritance succession through notary office
Peter, a German, met his wife Zhao Hua while he was working in China in 2009, and then married in 2010. They purchased one real estate in Shanghai in 2012, registered under the name of Zhao Hua. In 2013, they had a son. After Ms. Zhao acquired German nationality in 2016, they moved to Germany to live. In 2018, Ms. Zhao died of a serious illness. Before her death, Ms. Zhao made a will in Germany to leave all the property under her name to his son.
Peter came to China with his wife’s will to find a lawyer to solve the real estate inheritance problem after handling the German property, and finally obtained the inheritance notarial certificate at the notary office.
Case 2: filing a lawsuit for a testamentary succession dispute through the court
Frank, a Singaporean citizen, has his wife, Ms. Chen, and children in Singapore, and has an illegitimate child Wang in China. Frank died in Singapore in 2011. After Frank died, his illegitimate child, Wang, sued his wife Ms. Chen to the court for inheritance disputes, request to inherit the real estate in Shanghai which is under Frank and Chen’s name. Ms. Chen provided proof to the court that Frank made a will in Singapore in 2001, which said that Frank left all of his inheritance to his wife Ms. Chen and the children in Singapore, and also provided the notarized legal opinions by Singapore lawyers and due diligence on Singapore court’s probate matters. The Chinese Court confirmed the validity of the evidence above. The house involved in this case was inherited according to the will. However, considering that Frank had less obligation to bring up Wang, and there is no heritage in the will to give to Wang, the court awarded Wang 150000 yuan according to the circumstances.
The core issues of the two cases are as follows:
三、Lawyer analysis
（一）Application of law
The Law of the Application of Law for Foreign-related Civil Relations of the People’s Republic of China
Article 4 If there are mandatory provisions on foreign-related civil relations in the laws of the People’s Republic of China, these mandatory provisions shall directly apply.
Article 10 Foreign laws applicable to foreign-related civil relations shall be ascertained by the people’s court, arbitral authority, or administrative organ. If any party chooses the applicable foreign laws, he shall provide the laws of this country. If foreign laws cannot be ascertained or there are no provisions in the laws of this country, the laws of the People’s Republic of China shall apply.
Article 11 The laws at the habitual residence shall apply to the civil rights capacities of a natural person.
Article 12 The laws at the habitual residence shall apply to the civil acts capacities of a natural person. Where a natural person conducting civil activities is determined as incompetent for civil acts in accordance with the laws at the habitual residence but is determined as competent for civil acts in accordance with the laws at the locality of the acts, the laws at the locality of the acts shall apply unless they are related to marriage, family or inheritance.
Article 24 As for the property relation between husband and wife, the parties concerned may choose the applicable laws at the habitual residence, of the state of nationality or at the locality of the main properties of one party by agreement. If the parties do not choose, the laws at the mutual habitual residence shall apply; if there is no mutual habitual residence, the laws of the mutual state of nationality shall apply.
Article 32 A testament shall be confirmed as valid if its form conforms to the laws at the habitual residence, of the state of nationality or at the locality of the testamentary acts when the testament is made or at the time of death of the testator.
Article 33 The laws at the habitual residence or of the state of nationality when the testament is made or at the time of death of the testator shall apply to the validity of a testament.
Interpretation of the Supreme People's Court on Several Issues concerning applying to The Law of the Application of Law for Foreign-related Civil Relations of the People’s Republic of China (1)
In any of the following circumstances, involving the public interest of the People’s Republic of China, the parties cannot be excluded by convention, and apply directly to the laws on foreign-related civil relations without a guide from conflict rules, provisions of administrative regulations, the people's court shall recognize them as mandatory provisions under Article 4 of The Law of the Application of Law for Foreign-related Civil Relations:
（1） Involving the protection of laborers' rights;
（2） Involving food or public health safety;
（3） Involving environmental safety;
（4） Involving financial security such as foreign exchange control;
（5） Involving anti-monopoly and anti-dumping;
（6）Other circumstances that should be recognized as mandatory provisions.
（二）Lawyer brief analysis
1、Determination of the validity of a will
Whether it is through the notary office or the court to complete the inheritance matters, if the will established by the decedent abroad is valid or not in China is the primary problem that the successor, notary, and judge should face.
The validity of a will refers to the legal consequences of a will established by the testator. As a unilateral civil legal action, a will can be established as long as the testator expresses his own will, but only if it has the conditions prescribed by law can it have legal force effectively. Every countries and region stipulate in the law some conditions for the establishment of wills and wills themselves. The main effective factors include the disposing capacity of the testator / the declaration of will of the testator / the certainty of the property involved / the legality of the form of will.
Therefore, whether a will is legal and valid depends on whether various conditions meet the requirements of the law. Then, is the law used to confirm the validity of a will made abroad necessarily the Chinese inheritance law and relevant laws? The answer is No.
2、Application and identification of laws
According to the articles of law mentioned above, the judgment of rights capacity and disposing capacity of the testator in the case of foreign testamentary succession shall apply to the law of the testator’s habitual residence. If the form of will meets the law of the testator’s habitual residence, the law of the country of nationality or the law of the place of the testamentary act at the time of the testator’s will making or death, the will is established, This rule’s scope is relatively broad, as long as it complies with the law of any of the four related places; the validity of a will shall apply to the law of the place of habitual residence at the time of making a will or death, and the law of the country of nationality or the law of the place where the will is made.
Therefore, in a case of testamentary succession, a lawyer should make clear the place where the testator died, where the testator made his will, his habitual residence before his death. It seems like a simple "sit in the right seat", but in practice, it is not so simple. Some testators do not live in a fixed country before their death, but live in three or four countries, and live in each country for a period of time, only can be judged by collecting the comprehensive factors such as the testator’s family, the location of the real estate, the social relationship, the location of the investment relationship and so on. After figuring out the applicable law by combining with the above factors, it will involve the identification of foreign applicable law. The main ways to identify are two ways which are found out by the authority and the parties to provide. The space is limited and will not say more here.
Testamentary succession cases involve family relations and property relations, which are complex and diverse in nature, especially involving foreign factors. It will be more difficult in collecting evidence, filing a case, application, and identification of laws. However, with the help of professional teams, it will be solved smoothly.
