A Will is the written declaration of a person, which states how and to whom will their wealth pass upon their death. The Cypriot Legislative System of Inheritance and Succession is influenced by the common law of England but also by the Ottoman system of vacant lands. The most important inheritance laws in Cyprus that apply to anyone who dies are the Law on Wills and Succession (Cap 195), the Law on the Management of Inheritance of the Dead (Cap 189), the Probates Law (Cap 192) and the E.U. Succession Regulation (Regulation 650/2012), hereinafter referred to as the Cyprus Legislative System for ease of reference.
Creation of a Valid Will
A valid Will under the Cyprus Legislative System is made only by a person who has reached the age of 18 (hereinafter referred to as the Testator) in writing and the procedural propriety order must be followed through with respect to execution. Firstly, the Will must bear signatures at the end of the document and for the purpose of avoiding any doubts, at the bottom of each page as well. The person making the Will (Testator) is the only person whose signature can be placed on the Will, however in the event that the Testator is unable for whatever reason to execute personally, then a representative can do so on his behalf provided the Testator is present and the execution occurs upon his express instruction. There must be at the very least two individuals which are able to directly witness to the execution of the Will at the moment it is being signed. The said witnesses can not be beneficiaries of the Will and must attest and countersign the Will in the presence of the Testator as well as in the presence of each other. Finally, each sheet of the Will must be signed or be initialed by or on behalf of the Testator and the witnesses.
The Government of Cyprus does not impose any taxation on inheritance however does impose a level of restrictions on a person’s ability in distribution. According to the Cypriot law, the possessors are not allowed to freely dispose of their property if they have living descendants or relatives, up to the fourth degree. The Cyprus Legislative System explicitly provides that 75% of the estate of the deceased’s wealth shall pass to the living descendants or relatives with the deceased retaining the freedom to choose to whom the remaining 25% will pass. This legal principle is commonly referred to as the Forced Heirship Regime. The four degrees of family relations as provided for by the Cyprus Legislative System are as follows:
1st Degree: Includes the legitimate children of the deceased and any living descendants of the children of the deceased, if such children passed away while the deceased was alive.
2nd Degree: Includes the parents of the deceased and if such are not alive then the siblings that are alive at the time as well as the children of the siblings, if both the parents and the siblings of the deceased have passed away at the time of making the Will.
3rd Degree: Includes grandparents and the closest living descendants.
4th Degree: Includes the closest relatives at the time of death.
An individual who wants to avoid following the forced inheritance rules or other side effects from the provisions of the compulsory inheritance, he may opt out for alternative arrangements with regards to passing on and re-distributing his wealth. The Cyprus Legislative System provides for a variety of options in managing such situations including but not limited to the establishment of a Cyprus International Trust, which holds many advantages over the traditional inheritance system. For example, it is not affected by the laws on inheritance and succession of Cyprus as well as the advantage of tax exemptions, confidentiality, protection of property and tax reductions. Even someone who intends to become a resident of Cyprus in the future can benefit from the Cyprus International Trust.
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