Inheritances

Inheritance issues are a common occurrence in family law, yet they can be quite complex. Seeking expert advice during times of heightened emotions can assist you in making the best decisions for yourself and your family.

Forced heirship: what surprises foreign clients most

If you come from the United Kingdom, Ireland or the United States, you are probably used to testamentary freedom: you leave your estate to whoever you choose. Spanish law works differently. Under article 806 of the Spanish Civil Code, part of the estate is reserved by law for certain relatives, known as herederos forzosos or forced heirs. You cannot freely dispose of that portion, even if your will says otherwise.

Where there are children or descendants, article 808 divides the estate into three equal parts:

• The strict legitimate portion (one third), which must be divided equally among the children.
• The mejora (one third), which may be used to favour one or more children or descendants over the others.
• The freely disposable third, the only part you may leave to anyone you wish.

The surviving spouse also has protected rights. Under article 834, a spouse who was not legally or de facto separated at the time of death is entitled to a life interest over the mejora third when inheriting alongside children.

This is the single point that most often catches international clients off guard: a will drafted abroad that leaves everything to a spouse may be partly unenforceable over assets governed by Spanish law.

Which law applies to your estate?

Since 17 August 2015, cross-border succession within most of the European Union is governed by EU Regulation 650/2012. The default rule is that your estate is governed by the law of the country where you were habitually resident at the time of death, regardless of your nationality and regardless of where the assets are located.

In practice, this means that a British or German national who has been living in Spain for years will, by default, have their worldwide estate governed by Spanish law, forced heirship included.

There is, however, a decisive exception. Article 22 of the Regulation allows you to make a professio iuris: an express choice, made in your will, that the law of your nationality shall govern your succession. For a British, Irish or American national with property in Spain, this is usually the most important clause in the entire document, because it can restore testamentary freedom over the estate.

Two points deserve particular attention. First, the choice must be made expressly and in the correct form; it is not presumed. Second, the Regulation does not apply in Denmark or Ireland, and the United Kingdom never took part in it, not even before Brexit, because it had opted out from the outset. That does not prevent a British national from making a professio iuris in a Spanish will: the Regulation allows the choice of the law of a non-participating State.

The European Certificate of Succession

The same Regulation created the European Certificate of Succession, a single document that proves your status as heir, legatee or executor and produces effects in all participating Member States without further formalities. It avoids having to repeat probate-style procedures in each country where the deceased held assets.

It is not available, however, where the estate is connected to Denmark, Ireland or the United Kingdom. In those cases the recognition of heirs follows the ordinary channels, usually involving apostilled documents and sworn translations.

Accepting or refusing an inheritance in Spain

Accepting an inheritance in Spain is not a formality. Under Spanish law, a plain and simple acceptance makes the heir liable for the debts of the deceased, and that liability is not limited to the value of what is inherited.

There is a safeguard. Article 1010 of the Civil Code allows any heir to accept the estate a beneficio de inventario, under benefit of inventory, which limits liability for debts to the value of the assets received. Where the estate may be insolvent, or where the debts are simply unknown, this is often the sensible route.

Heirs cannot postpone the decision indefinitely. Under article 1005, any interested party may ask a notary to formally require the heir to decide within thirty calendar days.

Inheritance tax: deadlines and residence

Spanish inheritance tax is governed by Law 29/1987 and is payable by the heir, not by the estate. The distinction that matters most for international families is between two regimes:

• Personal liability (article 6): heirs resident in Spain are taxed on everything they inherit, wherever in the world the assets are located.
• Real liability (article 7): non-resident heirs are taxed only on assets situated in Spain.

The filing deadline is six months from the date of death, extendable by a further six months if the extension is requested within the first five. Missing it triggers surcharges and interest, and the deadline runs whether or not the heirs have reached agreement.

Non-resident heirs are entitled to apply the rules of the relevant Spanish region. Following the judgment of the Court of Justice of the European Union of 3 September 2014 (case C-127/12), Spain amended the legislation so that non-residents are no longer treated less favourably than residents. What does remain is the substantial variation between the Spanish autonomous regions themselves, which can change the final tax bill considerably depending on where the assets are located or where the deceased was resident.

When heirs cannot agree

Disputes between heirs are common, and they rarely stay small. The most frequent are challenges to the validity of a will, claims that the forced heirship rules have been breached, disagreement over the valuation of property, and deadlock in the division of the estate where one heir refuses to sign.

Where agreement is impossible, Spanish law provides for judicial division of the estate, including the appointment of an independent contador partidor to draw up the division. Distance makes these situations harder: heirs living in different countries, documents in different languages and, frequently, a property in Spain that nobody can sell until the dispute is resolved.

How we work with international families

Most of the inheritance matters we handle involve more than one country: a deceased person who lived in Spain but was a national of another State, heirs scattered across Europe, or a property on the coast that has been in the family for decades.

Our work usually covers reviewing existing wills and advising whether a professio iuris is appropriate, determining which law governs the estate, obtaining the certificates and the European Certificate of Succession where available, coordinating apostilles and sworn translations, preparing the deed of acceptance and division before a notary, filing the inheritance tax return within the deadline, and litigating where the heirs cannot reach agreement.

We work in English and Spanish, and we are used to dealing with lawyers, notaries and tax advisers in other jurisdictions.