Thanks, in part, to the now subsiding Coronavirus crisis, more of us than ever are taking stock of both our own mortality, and our finances, and ensuring we have written fully comprehensive wills. If you have recently moved to Spain, or purchased property in Spain, then now is the perfect time to better understand Inheritance Law options in the country and make a Spanish will. Here’s everything you need to know about making a will in Spain:
What Happens If You Don’t Have a Will?
If you own a property in Spain then it is very important to have a Will that clearly outlines your wishes, and the way you would like your estate to be divided. Without this, your estate will be divided according to Spanish Inheritance Law (which may, or may not, be aligned to your wishes).
A clear example of this is: A man dies and leaves behind a wife and three children, a small amount of savings, and a single property in Spain that he owns as a half owner (sharing the title deeds with his wife). 50 percent of the property would go to the wife, whilst the other 50 percent would be divided equally between the three children. The title deed will then be changed to show four names rather than two (the wife owning half, each child owning one-sixth). The children could not force the wife to sell the property, and she would be entitled to live their until her death, but she would equally be unable to sell the property and move on without the permission of the children, leading to a potentially messy and legally convoluted process.
In short, if you share a property with your spouse, and would like them to have the security of full ownership of that property in the event of your death, you must write this wishes down clearly in a Spanish will.
Three More Good Reasons to Make a Spanish Will
Still not sure whether the slight inconvenience and minor expense of making a Spanish Will is worth it for your family right now? Here’s three more good reasons why you should consider making your Spanish will:
Reason 1: It Will Save Money in the Long-Run
If you die without a will in place then your heirs will be left with a potentially time consuming and lengthy legal proceeding to navigate in order to resolve the legitimate ownership of your property. It’s important to note that a British Will will have no bearing on proceedings in Spain, and a Spanish Will will not be legal in Britain: you can and should have two wills outlining what you would like to happen to your assets in each country.
Reason 2: It Will Protect Your Spouse
As was clearly outlined in the example above, Spaniards have to divide their assets equally among their heirs, and leave two-thirds of it all to their children. Without a will in place, these same inheritance rules will apply to you, but writing a will can help you to circumnavigate them. Foreigners are able to divide their estate however they wish, although it’s important to note that this will be subject to inheritance tax. The rate of this is high when property is left by non-residents to non-relatives, so you may wish to consider this when writing your will. What’s more, foreigner's resident in Spain are subject to the same taxes on any of their worldwide estate. But if you have a will then you will be ab to navigate these various taxes at your discretion, effectively leaving more of your money in the pocket of your family.
Reason 3: It Will Reduce Your Inheritance Tax
If you wish to leave your assets to your spouse or children, then the inheritance tax on your estate can be dramatically reduced. The law was changed on 28 January 2018 to mean that the “first level” (wife/husband and children), won't pay any inheritance tax up to €1 million per heir. This is applicable to both residents and non-residents, and could dramatically reduce the tax payable on your estate.
Key Inheritance Law Facts
The Laws surrounding inheritance and inheritance tax in Spain can be complex, and we strongly advise that you seek the advice of a professional when writing your Spanish will, to enable you to ensure your money goes exactly where you want it to go. Some other key facts surrounding Inheritance Law that you may find useful include:
- Your family should apply for a death certificate within 24 hours of death in order to make the inheritance process much easier.
- Inheritors should apply for (or already have) a NIE number, and they should also be prepared to give power of attorney to the Spanish lawyer representing them in order to arrange it.
- Inform your intended inheritors of what you intend to bequeath them, where your title deeds are, the contact details of your lawyer and any other official piece of paperwork that they will need when you die now – this will help speed up the process and minimise the risk of them not being able to find your will, and thus not getting what you wanted them to.
- If your heirs do not process the change of ownership of the property to their names, they cannot sell it or rent it out, so it is important for them to be aware of the legal procedures. Working with a knowledgeable local lawyer will help with this.
Are you thinking of buying a property in Spain? Is now the right time for you to invest in that Spanish bolt hole you’ve been dreaming of? Then why not get in touch with our local property specialists today. With a wealth or expert knowledge, we’re perfectly placed to do all the hard work for you!