Changes to EU inheritance law affect owners of Spanish property
Spain, along with most of the other European Union nations, has recently seen changes to its inheritance laws that could benefit foreign residents who would prefer to leave their Spanish property to whom they choose.
On August 17, the EU implemented new regulations that affect 25 of the 28 member states (Denmark, Ireland, and the UK, for a change, opted out) that are set to make cross-border succession simpler, quicker, and cheaper.
Until last month, each member state applied different rules regarding the jurisdiction under which cross-border succession cases should fall and the legislation that determined who, if anyone, had rights to inherit.
The new rules mean things should now be a lot clearer in cases where a person from one country dies in another, something the EU estimates happens 450,000 times a year, involving assets worth more than 120 billion euros. Not only have criteria been unified across the 25 states, independent of the country of death, but documentation is now standardised, to avoid any possible confusion.
In Spain, for example, both national and foreign property owners who passed away in the country have, until now, been obliged to comply with mandatory rules governing who inherits in case of death, something that has come as a surprise to more than a few surviving partners of those who originally hailed from elsewhere.
Using the principle of ‘legitimate heirs’, independent of whether the deceased was Spanish or from overseas, children and other descendents have the right to receive one third of all assets, which is distributed on a per capita basis. They also have rights to another third, although this can be bequeathed on a discretionary basis.
In cases where there are no descendents, the deceased’s parents have the right to one third of all assets if the deceased was married or in civil partnership, or half, if the deceased was unmarried.
The deceased’s spouse or civil partner only has the right to one third of any assets if there are children, or half if the deceased’s parents are still alive, and in both cases solely to use and enjoy for the length of their lifetime. Only if there are no children or parents, do spouses or partners inherit all of the deceased’s assets.
In the UK, on the other hand, as long as your will is valid, you can choose to leave property and other assets to whomever you wish, with no requirement to pass all or part on to your children or other heirs.
Where there’s a will, there’s a way
Now, the new European Certificate of Succession allows administrators (executors) and heirs not only to prove their status more easily, but also to exercise powers under a will across the European Union.
According to Adolfo Martos, a partner at Costa del Sol law firm GAM Abogados, the regulations offer greater legal certainty and facilities for cross-border succession: “For instance,” he says, “a British citizen who is resident in Spain and owns properties in France can decide that UK law applies to his succession as a whole. The choice, however, must be made in the form of a disposition of property upon death that is valid under national laws.”
This means the deceased must leave either a valid will, a notarised document, or, in the case of the UK, a document signed by two witnesses, specifying his or her wishes. If the choice is not made in a valid manner, however, the regulations stipulate that succession will be governed according to the rules in the country where the deceased was last resident, in this case Spain.
Adolfo adds that the regulations also clarify which jurisdiction has the authority to rule in case of disputes concerning cross-border succession. As a general rule, he points out, this is the courts of the country where the deceased was last resident before his or her death.
By Adam Neale | Property News | September 18th, 2015