The succession to the estate of a deceased person is dealt in different ways in the diverse national legal systems. Therefore, it is important to be informed about which law applies to us as well as its implications. Inheritance law is regarded as one of the most complex areas of international law; therefore, it is highly advisable to execute a will together with your solicitor in order to avoid eventual setbacks, conflicts among successors and litigations over inheritance money.
Changes to Inheritance law were introduced as a result of the European Regulation 650/2012 (Brussels IV), which became effective on the 17th of August 2015, affecting all foreign residents who live and own assets in Spain.
The main effect of this regulation is that it establishes that Succession in all Member States will now be ruled by the laws of the land where the testator holds residency status in lieu of his own national law (article 20). In other words, if a foreign resident dies without leaving a will or making an official declaration on which law they wish to apply, the law of the country where they resided will apply.
In contrast to the UK, in Spain you do not have the same flexibility with regards to successions and are obliged to allocate a certain percentage of your estate to direct descendants. This is known as the forced heirship rules (also known as The Law of Obligatory Heirs in Spain) which can cause great distress to expats, as they may see how they are limited as to the way they can distribute their estate.
Although the UK opted out of this regulation, it still applies to all UK citizens living in Spain or in any other member estate.
This regulation also allows for more flexibility as you can now choose which aw applies to you (Art.22). Thus, if you want to avoid falling under the stricter Spanish rules, you have to add a clause in your will specifying that.
Therefore, If the deceased has children the estate is divided into three sections. (See Diagram Below)
– First third is left to the children. No matter how many of them there are and is divided equally between them.
-Second third is also destined for the children, but the benefactor is able to determine how this is divided. Also, the property passed on in this third cannot be disposed of until after the surviving spouse has died.
– The thirst third of the estate can be passed to anybody. If there are no children, then surviving parents of the deceased are entitled to that particular share of the estate.
This following diagram illustrates the three parts in which your estate has to be divided under the Spanish Law:
- Legitima (Forced Share)
- Mejora (Forced share, but not in equal parts)
- Libre Disposición ( Free Disposition)
*Living spouse has usufruct over the second third(Mejora)
Therefore, we advise you to make a will in Spain, expressing choice of law and including all important clauses, as It helps to simplify the process when beneficiaries come to inherit, as documentation to be assembled is less complex and the procedure is swifter. Also, discussing with an expert will give you the opportunity to better weigh its implications and adjust it to your benefit; preventing unexpected results from happening.