The dangers of not having a Spanish Will if you own assets in Spain
If a British citizen who is resident in Spain or a non-resident who owns property in Spain dies without a Spanish Will or fails to include a choice of law clause, Spanish law may be applied by default.
This could result in unintended consequences because Spanish law has an unfamiliar concept to English law of ‘forced heirship’.
Spanish forced heirship (known as legítima) is a key principle of Spanish civil law and reserves a fixed portion of a deceased person’s estate for specific family members, such as children, even if the deceased’s Will states otherwise.
However, read on and you can understand some of the solutions available to you to avoid the Spanish forced heirship rules applying to your Spanish assets.
Forced heirship rules
The first point is that the forced heirship rules (legítima) are not uniform in Spain. While the national Spanish Civil Code serves as the default, several “Foral Law” regions have their own specific succession rules.
In most of Spain (including Andalusia, Madrid, and Canary Islands), the national rule applies and the following aspects should be noted:
- Two-thirds rule: Under the Spanish Civil Code, if a person has children or descendants two-thirds of their estate s generally reserved for them.
- Division of estate: One-third of the estate must be shared equally among all children, and another third (known as mejora) can be used to favour one or more children.
- The final third: Only the final third, which the free disposal portion, can be freely distributed to anyone, including a spouse or others.
- Spousal rights: If children exist, the surviving spouse is often only entitled to a life interest (known as usufructo) in one-third of the estate, not outright ownership, which can create issues for spouses inheriting a home.
- Parental rights: If there are no descendants, parents or other ascendants become the forced heirs, entitled to a share of the estate.
However, some regions offer more flexibility or different protections:
- Catalonia: The forced portion (legítima) for children is reduced to 25% of the estate (instead of 66.6%).
- Balearic Islands: Generally, children are entitled to 33.3% if there are four or fewer siblings, increasing to 50% if there are five or more.
- Aragon: The reserved portion is 50%, but the testator has the flexibility to distribute it unequally among descendants or even choose just one child to receive the entire half.
- Navarra: Offers the most “testamentary freedom”; the forced heirship is purely symbolic (legítima foral), consisting only of “five days of light and water,” effectively allowing you to leave your assets to whoever you wish.
- Basque Country: In some areas, the forced portion is one-third, but the testator can choose to leave it all to a single descendant, excluding others entirely.
In short, it can be quite complicated to understand the implications!
How I might mitigate the effects for British nationals:
- Despite Brexit, British nationals can still avoid Spanish forced heirship by using EU Regulation 650/2012 (Brussels IV), which allows them to choose the law of their nationality to apply to their entire estate, rather than the law of their country of residence.
- It is highly recommended for British nationals to have a separate Spanish Will that explicitly states, under Article 22 of Brussels IV, that they choose the laws of England and Wales (or Scotland/Northern Ireland) to govern their succession. The Spanish Will should be signed before a Notary and registered in the Central Wills Registry in Madrid.
- Please review your UK & Spanish Will regularly to ensure your Will is valid in both jurisdictions and that it is kept updated for changes in tax or residence.
- It is essential to seek specialised legal advice to navigate the interplay between UK succession laws and Spanish laws, as well as considering Spanish Inheritance Tax, which can be high.
Disclaimer: Spanish Inheritance Law is complex and professional legal advice should be sought. The details above are for informational purposes. Regulations are subject to ongoing updates, including regional variations within Spain. It is crucial to seek professional advice from a cross-border legal and tax specialist.
For more information, please contact Yolanda Perez Berges at yolanda.perez@theburnsidepartnership.com