Will in Spain

Why You Need a Spanish Will If You Own Property in Spain

Spanish legalities: how to guarantee that your chosen beneficiaries will efficiently inherit your Spanish assets according to your wishes

If you are a non-Spanish owner of property in Spain, then except in unusual circumstances, you should make a will nominating the chosen beneficiaries of your Spanish property. 

If you do not make a will dealing with your Spanish property, you risk the following issues occurring following your death:

  • Someone other than your chosen beneficiaries could inherit your Spanish property. 
  • Your beneficiaries could end up with an unnecessarily lengthy and stressful legal process to claim their Spanish inheritance. 
  • Your beneficiaries could also be burdened with very substantial legal fees in securing their Spanish inheritance. 
  • Your beneficiaries could be faced with high Succession Tax charges, which can significantly erode the value of their Spanish inheritance.

So, could you feel comfortable knowing you were leaving your loved ones with the problems outlined above? 

That’s where a Spanish will can be of great help.

It will ensure sure that no-one else other than your chosen beneficiaries can claim your Spanish property. 

You can feel relaxed about the prospect of the Tax Authorities unnecessarily having a claim to a large proportion of your hard-earned wealth.

This is how a Spanish will an protect your family if you own a property or any other assets in Spain:

It is estimated that well over 50% of non-Spanish owners of Spanish properties have either not made valid wills for their Spanish assets, or they have failed to update their wills over time, so that their current wills no longer reflect their actual wishes.

The position in respect of British owners of Spanish properties is perhaps even more alarming, as the statistics indicate that the percentage of British individuals without wills or with inadequate wills is even higher. 

Many do make wills in Spain, for example when they purchase properties, but wills are often made as an afterthought, without particular regard to the pitfalls which are open to foreigners with properties and other assets in Spain. 

Also, valuable opportunities legally and legitimately available to reduce taxes through a carefully structured will are simply missed.

Some brief examples of particular problem areas which frequently arise and require special consideration are:

Language

It is essential in making wills when there are assets both in Spain and in another country or countries, to ensure that there are no inconsistencies or conflicts in the use of language. 

The consequences of a poor quality translation, for example, can be disastrous as the complete sense of the document can be lost.

Accidental intestacy

A particular danger of having multiple wills (i.e. separate wills for Spanish assets and non-Spanish assets respectively) can be that, due to incompatibility, the wills can be accidentally invalidated. 

This means that your actual wishes could be completely overridden, leading to quite unexpected (and often inconvenient) results in the distribution of assets following a death.

Succession

The legal systems of many countries, (including the UK), permit individuals, within reason, to leave their assets to whom they choose. 

This is not the case in Spain, where the Spanish Civil Code imposes an obligation for the bulk of assets to be left to specific family members in predetermined promotions, according to family circumstances.

However, in most cases, correctly worded wills enable foreigners to enjoy the freedom of choice of their own country’s legal system, which can also often be beneficial in estate and tax planning.

Taxation in Spain

The days are over when non-Spanish owners of Spanish properties could simply “forget” their Spanish properties for the purposes of their taxation liability.

The Spanish Tax Authority (‘Hacienda’) has made it abundantly clear that it means business and will no longer ‘turn a blind eye’ to tax evasion. 

Further, Hacienda and other national Tax Authorities (including the UK Revenue) are now in closer contact than ever before.  For those prepared to run the risk of tax evasion, or those who choose simply to ignore the issue of tax liability, these are extremely important developments. 

The only real option now for well advised Spanish property owners is to recognize and accept that owning a foreign property does create taxation issues. 

However, provided that correct professional advice is obtained, the taxation position can be managed, so as not to be unexpectedly onerous. 

In many cases, wills and estates can be structured quite legitimately to reduce or even completely (legally) avoid taxation liability.

However, to be on a safe side, its important to have a clear understanding how Spanish succession tax works and what your taxation liabilities can be.

In many cases, wills and estates can be structured quite legitimately to reduce or even completely (legally) avoid taxation liability.

Expertise

As in many other countries, there are minimal controls in Spain regarding the qualification and training of those engaged in the preparation and provision of wills and estate documentation. 

As a will is one of the most important documents you will sign in your lifetime, (at least, in terms of protecting your family’s wealth and future financial security), it is essential that only the best quality advice and documentation are obtained. 

Failing to take professional advice can result in mistakes and missed opportunities to save tax which, in the long run, can prove to be extremely costly and upsetting for families and loved ones.

Cost

Multi-jurisdictional estate planning is a complex area of professional practice, and the fees for advice in this area can be prohibitively high. 

However, in many cases, it is simply unnecessary to incur such high charges. 

The use of expert advisers in this area of legal practice, who specialise only in this type of work, can enable the correct documentation to be quickly, expertly and professionally provided, but on a surprisingly affordable fixed fee basis.

Preparation for a straightforward succession process 

The very last thing most people would wish for when making a will, is to leave their family and loved ones behind with a complex, time consuming and costly succession process. 

It is therefore essential that all will documentation is designed appropriately to pave the way for the most convenient, efficient and straightforward succession process possible in the circumstances. 

This means avoiding conflicts of language, the dangers of inconsistency and mutual incompatibility of wills, and confusion over succession issues and taxation liability.

In conclusion

It can be extremely dangerous and costly to sign a will, or to deal with estate planning in one country, without also considering the position in any other country where you have assets. 

More importantly, when making wills (particularly wills covering assets in two or more countries), appropriate expert advice should be obtained.  This ensures that the documentation operates correctly, and as intended, in the context of the legal and fiscal systems of each country. 

There really is no other way to guarantee that your chosen beneficiaries will efficiently inherit according to your wishes.

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