As stated in our headline, it is of great interest for those citizens with long-term residence and property ownership in Spain, or those planning to acquire property in the future with the intention of residing on a long-term basis in Spain, to make a Spanish will. Without doubt, we also advise non-resident property owners in Spain to make a Spanish will.
The reasons are clear and beneficial for the testators, obviously a Spanish will would only apply to any assets situated in Spain. It would avoid costly probate and translation procedures, and the recognition process of an English will by the Spanish authorities, leading to delays in the inheritance process. All of the above affecting the heirs during emotionally difficult times.
Finally, the reason we consider to be most important is that inheritance regulations established under national laws differ. While the British inheritance law allows discretionary last will and testament, in contrast the Spanish inheritance law limits who you can leave your assets to, it is obligatory that descendants (children) receive two-thirds of your assets. An option which could conflict with the legitimate wishes of the deceased.
Once we have taken the appropriate decision to make a will in order to regulate the inheritance process of our assets in Spain, we should now concentrate on the correct manner to do so.
For that reason, wills should be made in accordance with the requirements laid down by EU Regulation 650/2012, of 4th July 2012, which contains an important amendment as from its entry into force on the 17th of August 2015 (Article 84).
Although over a year has passed since its entry into force, it is extremely relevant today to warn of its impact. This is due to the fact that there are many foreign residents in Spain whom due to unawareness or incorrect advice, have not acted in accordance with the law. This includes those foreign residents that before the 17th of August 2015 made a specific will for their assets in Spain, and have erroneously interpreted not to be affected by the amendment.
In fact, initially it was widely interpreted that due to neither the United Kingdom, nor the Republic of Ireland having adopted the regulation, citizens of those nations would not be affected. This deduction, and any other that may have arisen for example from the range of speculative theories resulting from BREXIT, have no legal foundation. Given that the we are subject to the scenario of assets located in Spain, and that the Spanish State has ratified the EU regulation, there is therefore no doubt that any assets in Spain are affected by it.
Previous to the 17th of August 2015, the Spanish Legislation (Civil Code Art. 9.8) applied the national inheritance law corresponding to the country of citizenship of the foreign resident in Spain. As from the entry into force of the EU Regulation 650/2012, wills made by foreign residents in Spain will be bound by default to Spanish legislation and not to that of their country of origin.
So, what happens to wills made previous to the amendment (of 17th August 2015)? Can we supplement them or include an addendum that clarifies the interpretation?
The only valid solution is to make a new will, expressly stating, as laid down by Art. 650/12, that the testator wishes for the inheritance of his or her assets to be governed by the country of citizenship. This new version will automatically replace any previous version at the National Will Register, providing total security and legal guarantee for the testator and his or her heirs.
Finally, we would like to advise that the options commented in this post and more concretely the decision making capability provided for under Regulation 650/12, only applies to inheritance law (governed by this process). It does not affect under any circumstances any fiscal aspects. This is due to the fact that we are dealing with assets located in Spanish territory, which makes them subject to Spanish taxation legislation. Therefore, the inheritance tax payable will be in accordance with Spanish legislation. In our coming articles we will analyse the topic of management and settlement of inheritance tax, and more specifically the local legislation applicable to the Costa Blanca (Region of Valencia).
As always, we advise you to consult a local expert lawyer before drawing up a will (whether new or a modification of one made previously) in order to protect your interests and above-all the interests of the heirs that you choose.
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice.
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