Have you recently bought a villa or an apartment in Spain? This article is an essential read for anyone who has invested in Spanish real estate and relates to the importance and the process of making a Spanish will.
It is imperative that you are aware there is a distinct difference in the way in which the Spanish legal system works in comparison to the laws in England, Wales and Scotland. If a foreigner or non-resident Spanish national with Spanish assets dies without having made a will in Spain, Spanish inheritance law will apply to those assets.
PropExtra spoke to Helen Brasington, director of law firm Bench & Co in Puerto Banús, who has represented the estates of foreigners and non-resident Spanish nationals with Spanish assets, who were unaware of the pitfalls of failing to leave a Spanish Will.
Helen states: “It is important to prepare a properly drafted Spanish will for many reasons not least of which to ensure you can freely dispose of your Spanish assets and avoid the Spanish compulsory heir rules.
“A Spanish Will can also be beneficial in the area of tax planning and to ensure the provisions you make for your home and Spanish estates are complementary.”
So why make a will?
1. Avoid unpleasant surprises!
To set a clear example of how this could affect you, be aware that there can be unintended consequences even for married couples with Spanish assets if they fail to prepare a will correctly. When a husband dies intestate Spanish law will apply and subsequently, some of his assets will automatically pass to his children. Clearly, this rule could seriously affect the surviving wife if there are problems within the family, and particularly if the husband has offspring from a previous relationship.
2. Reduce the inheritance tax bill
If you have raised a Spanish will then your estate may be eligible for a large reduction in the percentage of inheritance tax that is required to be paid by your heirs. This will vary from region to region and is only available to residents & EU non-residents. In certain circumstances, it might be wise to investigate the option of Spanish residency in addition to the inheritance tax situation in the area of the country that your property resides.
3. Avoid time-consuming and expensive legal fees
If you don’t address the issue of making a Spanish will your chosen beneficiaries may have to spend a great deal of time and money resolving unnecessary problems relating to their inheritance.
Types of Spanish Will
There are three types of will available to you:
Open Will (testamento abierto): an open will is prepared directly before a notary and they have the responsibility of ensuring that it is completely legal and correctly drafted. A copy of the document is sent to the registry of wills in Madrid. You will receive a copy and the original will remain at the notary’s office. If you don’t understand Spanish you must instruct a suitable person to create an official translation into your native language so that you can understand the details of the will fully.
Closed Will (testamento cerrado): the contents of a closed will must remain completely confidential and it is essential that a closed will is drawn up by a Spanish lawyer as it must comply with Spanish law. A closed Will will be taken to a notary to be sealed and signed by the acting notary and two witnesses, and then filed and recorded in the same process for an open will.
Holographic Will (testamento ológrafo): this version can be handwritten by the person who makes the will but it does have some disadvantages that could create problems at the time of death. It must be precisely drafted, signed and dated and you must ensure that your wishes are evident and set out clearly.
No witnesses are required and the document can be voluntarily registered with the registry of wills. A holographic will does not require legal guidance or advice which is always a concern, and it will be necessary for the beneficiaries to attend court to validate the document when the testator dies.
- A notary is a person authorised by the government who is permitted to perform certain legal procedures and create legal documents.
- When someone dies outside of the country (Spain) it is essential that the death certificate is legally translated and notarised to ensure its validity.
- Trusts which offer protection from inheritance tax do not exist in Spain.
- If you have an English will it is important to translate it into Spanish and to include the clause to select English law.
- Pay attention to the rules relating to witnesses! If they are not followed correctly they may render a will null and void.
- Executors of wills are not normal in Spain and you should be aware that by appointing one, you may increase the amount of inheritance tax that is payable to the government.
Bench & Co. are an international law firm based in Puerto Banus, Spain that specialise in the complex legal issues that foreigners and expatriates face in Spain.
Please note that ReSales Online is not property lawyers. The information provided in this article aims only to highlight some common questions, and while we do our best to be complete and correct. We would strongly encourage you to seek appropriate counsel when entering into any financial transaction!