Succession agreement

What is a succession agreement?

A succession agreement is a legal arrangement under which two parties agree that one of them will transfer to the other the expectation of acquiring an asset through the succession of a third party, who does not usually participate in the agreement. These arrangements form part of the complex framework of succession law and the restrictions it imposes on transactions involving future assets.

Under the Spanish general civil law system, agreements concerning the inheritance of a third party are subject to the prohibition against entering into transactions involving an estate that has not yet come into existence, in accordance with Article 1271, paragraph 2, of the Spanish Civil Code. This rule is reinforced by other provisions of the same Code, including Articles 816, 794 and 658.

However, Article 1674 of the Spanish Civil Code provides some clarification by allowing certain agreements relating to inheritance. In particular, it permits the proceeds of assets expected to be received through inheritance to be contributed to a civil partnership, even though the contribution of future assets themselves is expressly prohibited.

There are also exceptions to the general rule. For example, future spouses may agree in a marital property agreement to make gifts of future assets that will take effect only upon death, to the extent permitted by the rules governing testate succession, in accordance with Article 1341 of the Spanish Civil Code.

Current legal scholarship includes a line of interpretation supporting the validity of succession agreements in certain circumstances. Those who defend this position argue that such agreements concern future assets subject to a condition precedent and rely on the principle of freedom of contract established in Article 1255 of the Spanish Civil Code.

The following requirements are generally highlighted:

• Non-potestative condition: the effectiveness of the agreement must not depend solely on the wishes of one of the parties, but on the decisions of the third party whose future estate is involved.
• Specific and identifiable subject matter: the agreement must concern particular assets rather than the estate as a whole.
• Agreement for consideration: the arrangement should involve consideration in order to avoid the prohibition on gifts of future assets established in Article 635 of the Spanish Civil Code.
• Payment of the price: the parties may agree that the price will be paid unconditionally, introducing an element of risk similar to transactions involving deferred delivery or promises taking effect after death.

Spanish case law has contributed to this interpretation by limiting the scope of the prohibition on agreements concerning future inheritances. Of particular relevance is the Spanish Supreme Court judgment of 22 July 1997, which held that the prohibition applies to agreements concerning the estate as a whole or a proportional share of it, but not necessarily to agreements concerning specific and existing assets.

Conclusion

A succession agreement is a complex legal arrangement involving the transfer of an expectation of inheriting a particular asset. Its validity may depend on compliance with requirements intended to ensure that the assets are clearly identified and that the agreement is lawful and equitable.

The Spanish Civil Code, legal scholarship and the interpretation adopted by the Spanish Supreme Court establish a framework in which certain agreements may be admitted in specific circumstances.

Frequently asked questions about succession agreements