Wills and Succession Planning in Cyprus: A Guide for Internationally Mobile Individuals

For internationally mobile individuals with assets in Cyprus — whether real estate, company shares, bank accounts or other investments — succession planning is not optional. Without a valid will that addresses the Cyprus assets, and a coordinated succession plan that takes account of all relevant jurisdictions, the transmission of those assets on death will be governed by rules that may produce outcomes very different from what the individual intended.

This article addresses the key aspects of wills and succession planning under Cyprus law for internationally mobile individuals.

Cyprus Succession Law

The succession of Cyprus-situated immovable property — land and buildings — is governed by Cyprus law regardless of the nationality or domicile of the deceased. The succession of movable property situated in Cyprus — company shares, bank accounts, personal property — is governed by the law of the deceased's domicile at the date of death. For individuals domiciled in Cyprus, Cyprus law governs the succession of their worldwide movable estate.

Cyprus succession law is contained principally in the Wills and Succession Law, Cap. 195. The law contains forced heirship provisions — compulsory portions of the estate reserved by law for certain categories of heir — that cannot be defeated by will. The statutory portion available to forced heirs depends on the family circumstances of the deceased and can range from a quarter to three quarters of the net estate. The balance is the disposable portion, which the deceased can leave as they wish by will.

The forced heirship rules are a material constraint on testamentary freedom for individuals domiciled in Cyprus and must be taken into account in any succession plan. For individuals who are not domiciled in Cyprus but hold Cyprus immovable property, the forced heirship rules apply to that property regardless of what their will or the law of their domicile provides.

EU Succession Regulation

EU Succession Regulation 650/2012 applies in Cyprus and provides a framework for determining which member state's law governs the succession of an individual who dies with assets in multiple EU member states. The default rule under the Regulation is that succession is governed by the law of the member state in which the deceased was habitually resident at the date of death.

The Regulation allows individuals to elect for the law of their nationality to govern their succession across all EU member states. For individuals who are habitually resident in Cyprus but are nationals of a country with a more flexible succession regime — one without forced heirship provisions, for example — making a nationality election in their will can significantly increase testamentary freedom in respect of their EU-situated assets.

The interaction between the EU Succession Regulation, Cyprus domestic succession law and the succession law of any other relevant jurisdiction requires careful analysis on a case-by-case basis and should not be approached on the basis of general principles alone.

Making a Valid Will in Cyprus

A will dealing with Cyprus-situated assets should be made in accordance with Cyprus law to ensure its validity and ease of administration. A Cyprus will must be in writing, signed by the testator in the presence of two witnesses who are present at the same time and who each sign the will in the presence of the testator and of each other. The witnesses must not be beneficiaries under the will or the spouses of beneficiaries.

For individuals with assets in multiple jurisdictions, the question of whether to make a single worldwide will or separate wills in each relevant jurisdiction requires careful consideration. A single worldwide will drafted in accordance with the law of one jurisdiction may not be valid or easily admitted to probate in all relevant jurisdictions. Separate jurisdiction-specific wills can avoid this problem but must be carefully coordinated to ensure that they do not inadvertently revoke each other.

Probate and Estate Administration

When an individual dies leaving Cyprus-situated assets, those assets must be administered through the Cyprus probate process. Where the deceased left a valid will, the executor named in the will applies to the Cyprus court for a grant of probate, which authorises the executor to collect the assets, pay debts and distribute the estate to the beneficiaries. Where the deceased died intestate, an administrator is appointed by the court.

The Cyprus probate process can be time-consuming, particularly where assets are located in multiple jurisdictions, where the will is contested or where the identity or location of beneficiaries is uncertain. Engaging experienced Cyprus probate lawyers at the outset of the process and ensuring that all necessary documentation is gathered promptly will minimise delays.

For beneficiaries based outside Cyprus, the practical and administrative aspects of receiving their inheritance — including the transfer of funds, the transfer of real estate title and the tax position in their country of residence — require coordination between advisers in the relevant jurisdictions.

Lifetime Planning

The most effective succession plans combine a valid will with lifetime planning measures that reduce the assets passing through the estate and the administrative burden on executors and beneficiaries. Measures commonly used in the Cyprus context include the transfer of Cyprus real estate into a Cyprus company during the owner's lifetime — which means that on death the shares in the company pass under the will rather than the real estate passing directly through the Cyprus probate process — the establishment of a Cyprus International Trust to hold assets outside the estate, and the use of joint ownership arrangements where appropriate.

Each of these measures has tax, legal and practical implications that must be assessed before implementation. Lifetime transfers of Cyprus real estate are subject to capital gains tax considerations, transfer fees and potentially stamp duty. Trust arrangements require careful drafting and ongoing administration. The interaction between lifetime planning and the forced heirship rules must be considered, as certain lifetime transfers can be challenged by forced heirs in some circumstances.

Keeping Succession Plans Current

A succession plan is not a document to be filed and forgotten. Family circumstances change — marriages, divorces, births, deaths, changes in the location or nature of assets — and the legal and tax framework changes too. Wills and succession structures should be reviewed regularly and updated whenever there is a material change in circumstances.

Kourtellos & Co advises internationally mobile individuals and families on wills, succession planning and estate administration in Cyprus, including the coordination of advice across multiple jurisdictions where required.

This article is for informational purposes only and does not constitute legal advice. For advice specific to your circumstances, contact us.