We are an English couple, resident in Spain, and we are in the process of putting our assets in order and so will be drawing-up Wills in Spain. Can you explain whether Spanish or English law would be applied to the distribution of our assets?
This is a common question at the moment as many are correctly reviewing the preparations they have made for estate planning in the light of changes to European law that will affect those who are resident in Spain.
According to the article 9 of the Spanish Código Civil, the applicable law, regarding inheritance issues, is determined by the nationality of the deceased. The 8th section of the mentioned article specifies that, regarding the applicable law, there is no distinction made as a result of the nature or the location of the assets.
New EU Regulations from 2015
That said, things are going to change as a consequence of the REGULATION (EU) No 650/2012 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 4 July 2012, on “jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession”.
Article 21 of that Regulation establishes, as a general rule, that “the law applicable to the succession as a whole shall be the law of the State in which the deceased maintained habitual residence at the time of death”. Where, by way of exception, it is clear from all the circumstances of the case that, at the time of death, the deceased was manifestly more closely connected with a State other than the State whose law would be applicable under the previous paragraph, the law applicable to the succession shall be the law of that other State.
According to Article 22, a person may choose as the law that governs the succession of their assets as a whole, the law of that State whose nationality they possessed at the time of making the choice, or at the time of death.
This Regulation cannot be formally invoked currently, because according to Article 84, the regulations will enter into force on the 17th of August 2015. Meanwhile, in any case, if a person drafts a Last Will and Testament before that date, the law applicable to the succession can be chosen by the testator, if it is according to the mentioned rules stated in the European Regulation.
So, in summary, if you are planning to become resident in a European country other than the country of your nationality, such as say Spain, and you wish the rules of succession of your country of origin, say England, to apply, then you must state this explicitly in your Last Will and Testament. Otherwise, Spanish law will apply and the system of forced heirs that pre-determines the beneficiaries rather than permitting you to elect them, will apply.