It is astonishing to note that 380,000 British nationals live in Spain, who may not be aware of the succession laws in place.
Take back the control to protect your loved ones, especially during these unprecedented times. Taking action now will ensure that your financial affairs are in order, should the unthinkable happen, giving you a greater peace of mind.
In view of the above, drafting a Last Will and Testament ensures your Estate is distributed as you wish, as Intestacy laws may come into effect if there is no valid Will in place and thus an Estate may be distributed in ways you do not agree with.
What is a Last Will and Testament?
A Last Will and Testament is a binding testamentary document that sets out a Testators / Testatrix’s wishes on how they would like their Estate to be administered. It is a proof of ones wishes and can even include gifts, legacies and gifting of properties.
It is highly advisable to draft a Will in the jurisdiction where assets are held to ensure it complies with their inheritance laws, which differ worldwide. Therefore, if one has assets in Spain, it is recommended to draft and register a separate Will in accordance with Spanish inheritance laws to deal solely with any assets you may have in Spain. Consequently, this ensures the handling of ones affairs is kept simple, and will not interfere with other assets held in other countries.
In view of the foregoing, to draft a Will in Spain, the best course of action would be to instruct a specialised Spanish lawyer to take your instructions and provide you with the specialist advice that is entailed with drafting a Will. Thereafter, the Will must be signed and certified before a notary and it will be registered at the central registry in Madrid, known as ‘Registro General de Actos de Última Voluntad’
In relation to inheritance tax, this is payable to the relevant tax authorities in Spain in regards to any Spanish properties, subject to any exemptions and reliefs they may be applicable to the estate.
Succession Laws in Spain
Spanish succession law requires that a proportion of the estate is left toyour spouse and children, being the legal beneficiaries of the estate. To this extent, children must inherit two-thirds of their parents’ inheritance. Other nationalities living in Spain can follow the succession law of their own country, if they wish. However, EU legislation means that this intention must be declared in your Spanish will, this is covered with a specific clause which must be stipulated in your Will. Failing to do this will lead to your estate being distributed, in accordance with Spanish laws.
Contesting a Will
No Will in place?
Should you decide to not draft a legally valid Will in Spain, then your assets will be dealt with pursuant to Spanish Laws. Subsequently, this essentially means that the estate will be administered either through UK or Spanish intestacy laws. This is largely dependent on your domiciled status at the time of your death. Conversely, this is reliant on many factors which must be considered thoroughly and by a lawyer with expertise in cross border succession matters, if possible.
Once it is established as to which laws apply and who is entitled to inherit, the following steps listed below usually occur.
- Documentation must be prepared to support a ‘declaration of heirs’ which must be signed. This is a document setting out the estate in Spain along with the persons entitled stating their relationship to the Deceased. Evidence must be submitted in support of this declaration. Prior to signing this documentation, it is important to note how inheritance tax (‘IHT) will be settled. Therefore, it is wise to collate the assets and liabilities of the estate to calculate the IHT due;
- A further document ‘acceptance of inheritance Spain’ must then be signed before a Notary. Reference will be made to the declaration of heirs, in the case of an intestacy; and
- As soon as the aforementioned documentation is signed, any inheritance tax which is payable will become due immediately. Once the inheritance tax has been settled and the document stamped by the Spanish tax authorities, steps can be taken to deal with the administration of the estate. Such as, transferring legal titles of properties into the beneficiaries’ names.
In order to obtain Probate in Spain, it is a lengthy process which can be simplified by instructing a lawyer who deals with such Probates. It is important to abide by the laws set out in Spain to enable an Executor to deal with the administration of a loved one’s estate.
Furthermore, visits to various offices will be required when trying to obtain probate. In this instance, it is normal for one to give a Power of Attorney to their lawyer who can act on their behalf. This is useful for an Executor/beneficiary who does not reside in Spain. It will ensure the whole process can be carried out by the appointed lawyer.
Certification and Translation
Any death certificates that are not in Spanish, may be required to be ‘legalised’ by the Foreign and Commonwealth Office. It may also need to be translated by an official translator for it to be admissible in Spain. The legalised death certificate will then need to be shown to the Central Wills registry located in Madrid.
Spanish Will search
A search will be carried out at the Spanish Central Wills Registry in Madrid to confirm the existence or absence of a Spanish Will.
The Spanish tax number is known as a NIE number. Executors/beneficiaries are required to obtain this number before they can deal with and inherit from a Spanish estate. A Spanish lawyer can obtain and assist with obtaining a NIE number for the purposes of dealing with a Spanish estate.
In view of the foregoing, once the above steps have been undertaken the process will then entail collating documentation and asset relating to the estate; signing a Spanish inheritance deed in front of a Notary in Spain; settling any IHT and property taxes; transferring property titles; releasing funds from various bank accounts and distributing accordingly.