If a foreigner with assets in Spain, i.e. property, dies without having made a Spanish Will, known as dying intestate, his or her estate can be disposed of under the Spanish law of compulsory heirs, or enforced inheritance.
Spaniards are restricted by stringent laws governing compulsory heirs. One third of their estate has to be divided equally among their surviving children, another third is also to be left to the children with the testator deciding how this is to be divided; however it must remembered that any surviving spouse retains a life interest in this third. The remaining third can be divided as seen fit. If you have a surviving spouse but no children, your surviving parents have a statutory right to one third of your estate or, in the absence of a surviving spouse, half of your estate.
This division may be neither practical nor desirable to you; therefore, in order to avoid this happening, along with simplifying the procedure, it is imperative that a Spanish Will is drawn up to specifically cover assets in Spain.
If you are a British National, resident in Spain, you are permitted to dispose of your Spanish assets according to UK law, providing of course, you have a valid Spanish Will. If assets are retained in the UK, a second Will is necessary to cover these assets. On both Wills there should be a declaration stating that your own country's inheritance law is governed by the principle of free disposition of property by testament. You must also ensure that neither Will contradicts nor invalidates each other.
There are specific rules governing the contents and form of a Will in Spain, so it must be prepared by your solicitor. The Will must be drawn up in two columns, one in Spanish and the other in English. It must then be notarised, normally at the same time as completion takes place on the purchase, when it becomes known as a “Testamento abierto” (an open will). This is the usual form. The notary keeps the original and registers it at the Registro Central de Ultima Voluntad, which is the Central Testament Registry in Madrid. You, as the testator, are given an authorised copy. If you wish to keep the provisions of your Will secret you may make a “Testamento cerrado” (closed will). More details about this can be obtained from your solicitor.
The laws governing Inheritance Tax in Spain are extremely complex, with considerably less generous allowances for beneficiaries. These allowances are also dependent on the beneficiary’s relationship to the deceased.
We, at Guide2Granada, strongly recommend that specialist advice is taken in this area; details of both legal and tax advisors can be found in the Business Directory.
In the event of a someone with a fiscal interest in Spain dying intestate, i.e. without having made a will, there is a complex legal path that needs to be followed.
Initially an original copy of the death certificate must be obtained. If the death certificate is in a language other than Spanish an official, sworn translator must prepare a sworn, official translation into Spanish. Confirmation must be then sought from the Central Registry in Madrid that the deceased had not sworn a Spanish will. Next the identification of the legal beneficiaries must be established along with their relationship to the deceased. Children of the deceased must produce a birth certificate and passort (if they are in possession of one). Parents of the deceased must produce the same documents plus the deceased's birth certificate. It should be noted at this point that all beneficiaries are required to have an NIE number, which can be applied for either in Spain or in via the Spanish Embassy in their home country.
The deceased's estate is then itemised by a lawyer, with the information corroborated by recognised documentation such as an escritura (property deed), bank certificates etc. The beneficiaries are required to attend a Notary in Spain to swear a Deed of Inheritance (escritura de herencia) declaring they are legally entitled to inherit the estate. In the event they are unable to travel to Spain they may appoint a Power of Attorney to act on their behalf.
4 - 6 weeks later the beneficiaries or their nominated representative with Power of Attorney sign a Deed of Distribution (escritura de distribución) whereby the deceased's estate may be lawfully administered. Following this the acting solicitor will arrange for the property title to be transferred at the Property Registry along with submitting the necessary tax forms and forwarding any inheritance tax due to the Spanish Tax Authorities.