Wills and Trusts
Estate planning refers to the preparations for the transfer of assets of someone upon his or her death.
A Will is the legal declaration in writing of the intentions of a person in respect of the disposal of their movable or immovable property after their death and this includes a codicil.
A will enables you to plan what will happen to your assets following your passing away. Subject to any forced heirship rules (see below) that may apply on a will having Cyprus law, a will ensures that those you would like to benefit, actually do so.
In order to be able to make a valid Will, a person must be of sound mind and be at least 18 years old.
A valid Will must have 2 adults (of sound mind) as witnesses.
The Executor of the Will and the beneficiaries mentioned in the Will cannot sign as witnesses
You can prepare your own will considering that you are of ‘sound mind’, above 18 years old and know what the requirements may be for valid wills. However, it is highly recommended to prepare your will through your lawyer.
Yes, a will can be revoked at any point, provided you are of ‘sound mind’ i.e. you have the capacity to understand the effect of your actions.
The most common way to revoke a will is to execute a new one that states an intent to revoke all previously made will.
No, a beneficiary in a will cannot be a witness to it.
Yes, you can be a beneficiary and the executor of the will.
Any type of assets that are settled on trust will not be part of the deceased’s estate. This means that your affairs will be placed in order before your demise as domestic forced heirship rules will not apply. Settling assets on trust can be cheaper while by using a trust you can provide for your needs at the point that you might not be able to take care of yourself.
’Administration of Estates’’ refers to the Court process taking place to facilitate the dealing of assets of a deceased who did not leave a will behind.
If the deceased had left behind a valid Will then his assets should be dealt with in accordance with his wishes and this process is commonly known as “Probate’’.
A definitive answer cannot be given because it depends on each case. We finish straightforward probate and administration of estates procedures between 6 – 12 months, which is probably the fastest in Cyprus. In general, it is easier and takes less time to deal with the estate (i.e. the assets) of a person who has left a valid will in place.
Typically, the main delays in the conclusion of an administration /probate in Cyprus, are due to the local and foreign tax offices (such as the HMRC). From our experience, the HMRC typically takes between 3-6 months to deliver the requested certificates (as the online format given is not acceptable to the Cypriot authorities). Local tax authorities, typically take 1-2 months to issue the final tax clearance certificate, provided that all the required documents are in place.
If you are domiciled in Cyprus then Cyprus law applies for your movable property worldwide and all your immovable property in Cyprus.
As a general rule, if you are domiciled in any third country then Cyprus law applies only for immovable property in Cyprus and the law of that third country applies for your immovable property there and movable property worldwide.
Domicile may be a complicated matter. In brief, every person has a domicile which he or she gets at birth. This is referred to as Domicile of Origin. A person can change his or her domicile and obtain a Domicile by Choice. To change domicile to Cyprus a person must:
(a) Have a residence in Cyprus; and
(b) Must have the intention to permanently reside in Cyprus.
No there is no inheritance tax or estate duty in Cyprus. It has been abolished since the 1st of January 2000.
Yes. Cyprus has forced heirship rules which previously applied only to Cypriots. In 2015 the law has changed and the forced heirship rules now apply to people from the United Kingdom as well. This means that people can only leave by their will a specified portion of their assets (estate).
As the law has recently changed, people should review their wills to ensure that they achieve their intentions and benefit those that they want to benefit.
The Cyprus forced heirship rules are the following:
a) Should the person have a spouse and children, children and grandchildren, spouse and grandchildren then only ¼ of their estate can be left elsewhere.
b) Should they have a spouse, father or mother but no children or grandchildren then can leave ½ of their estate elsewhere.
c) Should they not have a spouse, children or grandchildren nor father or mother, then they can leave all of their estate at their absolute choice. (Article 41(1), Cap 195).
People can appoint anyone to be the administrator/ executor of their estate. If such a person is not a lawyer then he or she will probably need guidance, advice and legal documents from lawyers which tends to make the process more expensive than appointing a lawyer to be the administrator/ executor.