Lawyers in France and the US are embroiled in the latest high profile international succession dispute, attempting to untangle the complex estate of Johnny Hallyday, the iconic French singer who died in December 2017 leaving four children and his wife Laeticia.
We thought it would be interesting to look at the scenario, as it is similar to that which often affects international clients with assets in Italy, and give our thoughts on the issues of cross-border succession law and perhaps even predict a possible verdict in the case.
Johnny Hallyday left a will made in California in 2014 in which he named as beneficiaries of his entire estate his widow, who was also named Executor, and his two younger adopted children Jade and Joy. His elder children David and Laura were disinherited, although it was reported that he had made a declaration stating that he had made adequate provision for them already in his lifetime. He directed that his assets be managed by a global trust.
His assets include a large home on the outskirts of Paris, where he died, a villa on the Caribbean island of St Barthélemy, and two properties in Los Angeles, in addition to rights to more than 1,000 songs, and a collection of prestige cars and motorbikes. A claim was lodged in the French courts by David and Laura in February 2018. In April the court of Nanterre made an order freezing the assets of the estate.
Lawyers for David and Laura will argue that Johnny Hallyday was a French national, and that even though Johnny was resident in the US and made a will valid under the law of California, at least some of his assets passing in succession should be governed by French inheritance law by which each of his children by law are entitled to an equal 18.75% part.
His widow’s lawyers will say the final will was drawn up under American law allowing him to distribute his fortune entirely as he wished.
As this case turns on issues of cross-border inheritance and involves assets in France, the French courts will start by considering the effect of the Succession Regulation 650/2012 which came into force in 2015, even though the will was made before that, because Johnny Hallyday died after it became law. The EU Regulation states that a person’s succession shall be governed by the law of their “habitual residence”. Could Johnny be deemed to have been habitually resident in the US? This seems possible as his family was based there and younger children attended school in Los Angeles, but the court will take into account his ties with other countries including France, and establish where he was habitually resident.
If France was his main residence, French law will apply to his entire estate and the children will be entitled to a fixed share of all his worldwide assets.
If habitual residence in the US is confirmed, the courts will need to look at what the law of the State of California says in relation to conflict of law on inheritance.
We are not experts on the law of the State of California, but many US states have rules similar to the common law “scission” principle deriving from English law. In English private international law rules, moveable property is governed by the law of the deceased’s “domicile”, whereas immovable property is governed by the law of the country where it is situated.
We could assume therefore that Californian law will deem the will valid in terms of succession to any property situated in the United States, which would therefore pass entirely to Laeticia and her children. It is possible that Johnny Hallyday could be considered to have moved his domicile to the United States, so all his movable assets would also pass under the will. That would leave property situated in France, which would be governed by French law and therefore divided between the surviving spouse and all four children.
If David and Laura’s lawyers can show this is likely to be what a court will decide, we are likely to see the case settled instead of dragging on for years, to the value of their share in the French property.
In theory, the French law permits the law of another country to override French forced heirship rights, this has been judged not to be contrary to public policy. However, a part of the estate must be granted to the rightful heirs if they are in a situation of an “economic instability or need”. This might be the last resort claim by Laura and David if the court upholds their father’s right to freedom to disinherit his children by his will.
The case is being closely followed by the French tax authorities which stand to lose their part in the inheritance (IHT on the French properties) if the US will is deemed valid and binding. As if it is found that Johnny was not habitually resident in the US, but in France, then the total worldwide estate would need to be declared in France and subject to inheritance tax.