Making a will
Making a will is fairly simple in Luxembourg, and if you already have a will in another country it can be recognised here.
You can also choose to have a will in Luxembourg for your assets here, and a separate will in a foreign country relating to assets held there (which will be subject to inheritance laws and taxes in that country).
It is not essential to have a will in Luxembourg, but you can make one to take advantage of the tax-free portion of your estate and to protect the interests of your surviving spouse.
You can also opt for the law of citizenship to govern your estate. You can find out about making a will to cover cross-border inheritance here.
Anyone over the age of 16 years and of sound mind in Luxembourg can make a will.
There are three types of will:
A handwritten or holographic will, is made by the testator, dated and signed. It’s the simplest of wills but it should still be deposited at a notary's office or with someone other than the testator, then registered. To be valid it must be entirely handwritten by the testator (it is not possible for spouses to make a will on the same document or a joint will).
A recorded will, also known as an authentic will is drawn under the guidance of a notary and witnessed by another notary or two witnesses. This is the most legally secure will, and you can also benefit from advice on legal hereditary laws in Luxembourg from your notary and make any necessary amends to your marriage contract. Your notary will register your will with the AED (Registrations, duties, estates and VAT authority in Luxembourg).
A sealed will, sometimes referred to as a mystic will, is held by a notary and witnessed either by another notary or two witnesses. It can be typed or handwritten by the testator or someone else on their behalf, but it must be signed, sealed and deposited with a notary in the presence of witnesses (which can be other notaries). The notary will then draw up a subscription act (acte de souscription authentique), but the will’s contents will remain secret until the death of the testator.
Registering your will
You or your notary should register your will with the AED (Administration de l’Enregistrement et des Domaines). If the will is registered, heirs can access it upon death, although the actual will cannot be kept by the AED and should be either deposited with a notary or kept by a person other than the testator. Registration or research (to check if a will has been registered) costs €10 if the process is done electronically and €20 if done in paper format.
The registration request must state certain information including:
- The surname and first name of the testator, and if applicable the name of the spouse.
- The date and place of birth of the testator, his or her 13 digit national identification number, profession and home address.
- The date of the will.
- The name and address of the person or institution to whom the will was entrusted or the place where it is kept.
What happens when you die?
A notary or heir can check if a will has been registered with the AED (and where it is held), on presentation of a death certificate.
Your heirs do not have to appoint an executor, but if they do, the position is limited to one year. If you die intestate (with no will), then the president of the district court local to where you resided and died will appoint a notary to administer the estate.
Duties of executor/notary
Depending on whom you or your family appoint, the executor will have the following duties:
- Sign for absent adults, minors or adults in guardianship.
- Request an inventory of succession.
- Support the will's validity if it is challenged.
A notary or executor can compile a grant of probate listing the heirs and their rights. The notary or executor will then:
- File an inventory of the estate.
- File the estates tax return.
- Ensure the collection and payment of taxes and duties on completion.
Any unforeseen claims on the estate must be dealt with in court. The deadline in Luxembourg for filing the IHT tax return is 6 months after a death.
Heirship, marriage contracts and IHT
You should note that Luxembourg has a legal system of heirship and that some of your family will have an automatic claim on your estate regardless of your will. The choice of matrimonial property regime does not affect inheritance (in that it does not modify the legal order of inheritance), and the descendants of the deceased will always remain heirs in reserve. However the choice of matrimonial regime can impact how the estate is divided at the time of death. Normally on death, the community regime between spouses is liquidated much as it is done when a couple gets divorced, and shared assets are split 50/50.
A universal community marriage contract with a surviving spouse attribution clause, means the entire community of assets reverts to the surviving spouse. You can also choose that the spouse has usufruct (or the right to use of a property) until they die.
If you recorded your property as separate on marriage, then all the property of the diseased spouse will be divided by legal heirship.
You can find out about this system of heirship and changes you can make for your spouse in our article on Inheritance Tax which also includes details of IHT rates.
You can choose that the law of your country of nationality rather than residence to determine your will and inheritance, and thus circumvent the heirship system in Luxembourg, although heirs will still have to pay transfer tax. You can find out more here.
If you don’t have a will (intestate), your estate will be divided in this order:
- Surviving spouse
- Parents or other descendants such as nieces and nephews
- Other surviving relatives
- The state
Gifts before death
Gifts or donations are subject to duties paid by the recipient. This amounts to 1.8% if the gift is to your children, 4.8% for spouses or civil partners, 6% for siblings, and as much as 14.4% if it’s a donation to an unrelated individual.
If you want to transfer your property before you die, you will also have to pay duties and a 1% registration fee, with an additional fee if you live in Luxembourg city. You can find more information on how to do this and the duties and fees involved here.
If parents die or are unable to take care of their children whom are still minors, a guardian must be appointed. Parents can choose a guardian and have this written in their will.
Contesting a will
If an heir wants to reject their inheritance, they can do so but they must file this at a district court. Heirs or claimants on the will also need to appeal through a district court if they want to dispute the validity of a will. An heir can contest their portion of a will in the civil court, but be prepared for this to take a while.
Thomson Reuters has a web page dedicated to answering questions on wills and IHT for foreign residents living in Luxembourg, including the implications of putting your assets into a trust.