Inheritance
Inheritance

Wills - New Rules   

Warning: The information set out below is a general guideline provided by DOMENECH ABOGADOS. Specific advice should be sought before any action in reliance on it is taken, as explained more fully in this website's legal notice.

Many know that, if you own Spanish properties (flats, houses, land, company shares) or have Spanish bank accounts in your name, then traditionally having a Spanish will to cover these assets has been an essential protection for your heirs. That said, initial consideration should be now given to whether a separate Spanish will is necessary, given that such wills are presently the object of controversy.

From 17 August 2015, an EU Regulation came into force in Spain and most other EU countries (although excluding some, such as the UK and Ireland). The new regime it introduces is complex and so proper, case-specific advice needs taking before making any decision over your wills. However this article highlights some important changes introduced by the Regulation:

  • First, broadly speaking, what happens to a person’s estate after death used to be governed by his/her national law. So a Swede’s estate on death will be ruled by Swedish law.
  • However, with the new EU Regulation, the law of someone’s country of habitual residence when they die will be decisive in deciding what happens to their assets on death.
  • That means, for example, that a foreigner living in Spain, who does not bother making a will at all, in the belief that his national intestacy rules he’s familiar with will “do the job for him”, is in for a shock – or rather his heirs could be. And that’s because, should he continue living in Spain without having made a will and die habitually resident there after 17 August this year, it’ll be Spanish (not foreign) rules that govern what happens to his Spanish assets. And Spanish rules might differ significantly from those applicable in other countries. Specifically, Spanish rules require certain proportions of someone’s estate to be left to given members of their family (notably children).
  • Those Spanish rules under which certain family members must inherit pre-determined proportions of a person’s estate - known in Spanish as legítmas – can, for instance, be particularly relevant to a man with “two families”, that is children from a first marriage or relationship, who he’s no longer in touch with and who he does not wish to benefit when he dies, and a new wife or partner and new kiddies who are the apple of his eye and to whom he intends to leave his wealth (to the exclusion of his first set of children). Were he to die habitually resident in Spain, the risk is that his new family will be obliged to share their inheritance with their older half-siblings, despite their father not having intended that.
  • In order to avoid an inadvertent application of local, unfamiliar Spanish rules on death, the Regulation luckily allows you to specify that the rules of the place you happen to be habitually resident in when you die should not apply to your estate but, instead, it’ll still be your national law that should hold sway.
  • However, this election to revert to your national law must be clear and made in the right form, and in the right context. Here at Doménech Abogados, we’re able to ensure this important choice of law is correctly and successfully dealt with.
  • Another departure brought into force by the Regulation is something called an EU succession certificate. This will be a useful tool when it comes to trying to sort out the Spanish estate of someone who has died habitually resident outside Spain. Thus, when the Spanish notary, Land Registry or tax authorities want to know what should happen to the Mallorcan holiday villa of a German lady who’s died habitually resident in Berlin, a German notary can be asked to confirm that in the form of a certificate, as provided for in the Regulation, and such certificate should be a simple and clear way of demonstrating what the German rules applicable to dealing with her estate actually provide.
  •  

For advice in plain English about matters touched on in this article, the new Regulation or any other Spanish law issue, please contact the writer, Christopher Lee, at Doménech Abogados on (00 34) 93 415 0677 or at cl@domenechabogados.com or consult his firm’s informative website - www.legaladviceinspain.com

web design and online marketing: icode consultores