It is said that approximately two-thirds of people in the UK die without making a will. It is an unfortunate fact that many with assets in Spain fail to make a valid will either in Spain or in their country of origin.
This can leave their families having to try to manage at a distance a complex legal matter – Spanish law when someone dies – which of course can be quite overwhelming. Below we set-out some information as a guideline to anyone in that situation.
Similar to most countries, there are effectively 3 possible options when dealing with the assets of a deceased’s estate in Spain. We consider these below as well as providing some practical information on payment of Spanish inheritance tax.
This scenario is dealt with at length in this post: Probate in Spain
It is often the case that foreign nationals do not draw-up a Spanish will to deal with their Spanish assets meaning that any Will created in their home country must be used.
The process for dealing with an inheritance under a foreign will is the same as that for a Spanish will with the only addition being that all of the relevant documents need to be legalised and officially translated so that the Spanish notary can draw-up the necessary Spanish documentation allowing for assets to be distributed to the heirs. Unfortunately this will add considerably to the expense and in addition can delay the process substantially.
In order for a foreign will, for example an English will, to be valid and given effect to in Spain, it needs to be verified as being:
- A valid will with regard to inheritance laws in England & Wales
- That the testator was of sound mind
- Any executor or trustees named in the will are empowered to administer the estate
A will in the UK will typically name one or more executors to handle testamentary matters when the testator dies. The executor should request a ‘Grant of Probate’ which is an official document issued by the probate registry that certifies the executor as having the right to deal with the assets of the testator.
This may be done personally or a solicitor can make the application for a fee.
Once the Grant of Probate has been issued by the probate registry, that document must be legalised by having the Hague Apostille stamp attached by a Notary Public whereupon it is ready to be translated into Spanish. This can be done by either sending it to an official translator in Spain or to the closest Spanish consulate.
Once the will has been legalised and translated it is simply a matter of following the standard process for an inheritance under a Spanish will.
No Will – Intestacy
For anyone not domiciled in Spain, then the laws of succession of the country where they are nationals shall be applied. If a valid will has not been written that means that the rules of intestacy of that country shall apply.
Below is a brief summary of some of the more important rules of intestacy in the UK, Ireland and Spain.
Rules of Intestacy – England & Wales
Married couples or civil partners can inherit under the rules of intestacy in England and Wales. So if a couple has divorced, the ex-spouse will not inherit although informal separations do not prohibit from inheriting.
Where an estate is valued at more than £250,000, and the deceased has left no valid will evidencing how the assets should be distributed, any spouse or civil partner inherits:
- All the personal property and belongings of the person who has died, and
- The first £250,000 of the estate, and
- A life interest in half of the remaining estate (the spouse or partner can benefit from that half but not sell or spend it).
A distinction should be made where any property or bank accounts were owned ‘jointly’ by the couple as in those cases the assets belonging to the deceased would automatically pass to the surviving spouse.
The couple’s children will inherit one-half of an estate over £250,000. If there is more than one child that half is shared equally.
Rules of Intestacy – Scotland
The rules of intestacy in Scotland are rather different to those in England & Wales and are found in the Succession (Scotland) Act 1964 as amended.
Firstly, any debts owed by the deceased must be dealt with. The surviving spouse is the primary beneficiary under Scottish intestacy rules.
In Scotland the surviving spouse is entitled to what is known as ‘prior’ which means a right to any:
- House (up to a value of £300,000)
- Furniture (up to a value of £24,000)
- Cash (up to a value of £42,000 if children, or £75,000 if no children)
‘Moveable and ‘Heritable’ Estates
After this it should be noted that Scottish rules of intestacy distinguish between a ‘moveable’ and a ‘heritable’ estate. The former relates to cash, jewelry, car, shares etc. The latter relates to property and land.
Once the prior rights have been distributed to the surviving spouse, the moveable estate is distributed as follows:
- One-third to the surviving spouse or one-half if no children,
- One-third to the children or one-half if no surviving spouse,
- One-third to the free estate
The ‘free’ estate refers to that which is left after debts, prior rights and legal rights. The free estate should be distributed equally among the children or if no children then jointly to brothers and sisters and parents followed by brothers and sisters solely then parents solely…and so on down the line of succession until the Crown.
Should a husband and wife or civil partners die together in circumstances where it is not possible to determine who predeceased who, then for the purposes of intestacy in Scotland both are said to have predeceased the other when considering the rights of beneficiaries to their mutual estates. As a result each is ignored when considering the legitimate heirs to each others’ estate.
Should there have been a judicial separation then the husband is barred from inheriting the wife’s estate but the reverse does not hold and a wife would not be so barred. Divorced partners do not benefit from each others estate.
It is important to note that under Scottish inheritance law, a testator does not have 100% freedom of disposition of personal assets and a beneficiary may choose to inherit under the laws of succession or under the will (if named as a beneficiary). However, the beneficiary must renounce one or the other.
Rules of Intestacy – Northern Ireland
The rules of intestacy in Northern Ireland may be summarised as follows –
If there are no children (or other relatives):
- The surviving spouse or registered civil partner inherits all of the estate
If there are children:
- The surviving spouse or registered civil partner inherits personal assets such as car, jewelry, art collection, household goods
- Equity in the estate (inc. property etc) up to £250,000
- A life interest in one-half of any remainder if one child or one-third if more than one child
If there are no children/grandchildren but parents alive:
- The surviving spouse inherits personal assets, the estate up to a value of £450,000 and one-half of the remainder (not a life interest)
- Parents inherit the remaining half
- If parents no longer alive then brothers and sisters share the remaining half equally
In Northern Ireland as in other jurisdictions in the UK, a divorced spouse receives no interest in the estate but a merely separated spouse would.
Rules of Intestacy – Republic of Ireland
In the Republic of Ireland it should be understood that whether or not a will has been created there are minimum guarantees for surviving spouses that ensure that they will inherit a minimum portion of the estate.
So even where a will has been made, the following applies:
- Where there are no children of the marriage a spouse is entitled to one-half of the estate
- Where there are children a spouse is entitled to a minimum of one-third of the estate
- If there is a surviving spouse, no children but there are surviving grandchildren then the spouse is entitled to one-half of the estate
In general, where there is no valid will, the following rules of intestacy apply:
- Where there are no children, the spouse inherits the entire estate
- Where there are children and a surviving spouse, the spouse inherits two-thirds of the estate
Rules of Intestacy – Spain
Spanish Law when someone dies – Spanish succession law operates a system of ‘forced heirs’ and only a minor portion of any estate may be freely distributed by the testator.
Should a person die intestate in Spain and the Spanish rules of intestacy apply then the first matter than needs to be defined is the size of the estate. If the deceased was married and the marriage was classified as a ‘sociedad de gananciales’ (the most typical in Spain) then under Spanish law, assets obtained during the life-time of a marriage are shared.
Accordingly, the deceased spouse may transmit only one-half of those assets upon death.
Other assets accumulated outside of the marriage – for example before the marriage or a personal inheritance from a parent – are added to this one-half to form the inheritance.
Rules for the Distribution of Assets
Spanish Law when someone dies stipulates that in the absence of a valid will assets should be distributed as follows:
- Equally to any children of the marriage (or if any child has predeceased the parent then to their children per stirpes),
- If no children, equally to surviving parents,
- If no surviving parents then to the closest of other surviving ascendants (uncles, aunts, grandparents),
- In the absence of surviving ascendants, to the surviving spouse,
- If no surviving spouse then to brothers and sisters
The outcome described above may be completely at odds with the preferred outcome and so it is important to make a will that covers Spanish assets to prevent this occurring.
Payment of Inheritance Taxes
A time-limit is established for the payment of inheritance taxes in Spain, being six-months from the date of death. An application may be made during the first five months to have the deadline extended by a further 6 months. Once granted the extended period of six months begins when the first six months has ended.
Interest will be charged at an annual rate of 5% until the date the tax is paid.
The process for applying for the extension may vary slightly in each region, however typically you will need to present original and copy of the following documents:
- Death Certificate
- Identification (Passports/NIE)
- Brief inventory of assets and values
- Reason for requesting the extension
Should the application be denied for any reason, the original deadline will be extended by the period of time between application for the extension and notification of the refusal.
Spanish Law when someone dies – Documentation Required
It is necessary to complete official form 650 or 652 (simple version) when paying inheritance taxes. These can normally be found in any office of Hacienda (Consejería de Economía, Hacienda y Empleo).
Along with the official form it is necessary to include all relevant information regarding the deceased, the beneficiaries and the assets that are the subject of the inheritance. So the following documents will be necessary depending on the assets to be distributed:
- Form 650/652
- Original and copy Passport Deceased
- Original and copy passport Beneficiaries
- List of assets with valuations
- Original and copy of death certificate
- Original and copy of RGAUV certificate
- Original and copy of will
- If no will, original and copy of ‘Declaración de Herederos’
- List of costs of funeral and support through final illness of deceased
- If Life Insurance then Certificate of Life Insurance
- Original and copy of property IBI receipt
- Original and copy of Vehicle documentation if any
- Original and copy of Bank Certificate regarding bank accounts, shares etc
- Original and copy of proof of relation with deceased (Birth Certificate)