Laws that dictate how you must leave your estate in your Will are a totally alien concept to most British people, yet there is a surprising number of countries in continental Europe where ‘enforced heirs’ are the norm. However, no two countries seem to have exactly the same set of rules, and no two countries seem to apply them in the same way.
Spain is just one such country. Every naturallyborn married Spaniard is obliged by law to leave his assets in Spain in the following manner: one third to be divided equally between his children, absolutely, one third to the children or grandchildren as he wishes, with the surviving spouse retaining a life interest in this portion, and one third as he wishes in his Will. There is no compulsion to leave anything to a spouse.
As all property is owned as the equivalent of “tenants in common” these laws can lead to children and step children owning small shares of the family home. This can cascade through generations and it is not uncommon for properties in Spain to have a multitude of minority owners.
However, Article 9 of the Spanish Civil Code allows foreigners to leave their assets in Spain according to the succession law of their country of domicile. This is domicile for IHT and similar purposes, it is not the tax domicile of the “non-dom” taxpayers we have heard so much about recently. This means that any UK resident with a holiday home in Spain can distribute his Spanish property according to UK law, i.e. he can leave it more-or-less to whomever he wishes.
This is the market position with a Spanish Will. You can take advantage of this by including a property in Spain within your clients’ overall worldwide estate planning.
This is much more than a remote Spanish lawyer can ever hope to achieve as he has absolutely no knowledge of the bigger picture.
Domicile also dictates which intestacy laws apply. In the case of no English or Spanish Will, we have administered estates in Spain for UK-domiciled citizens according to the English Intestacy Laws. Fortunately the worldwide estate was a lot less than £125,000, so there was no decision as to how the estate was to be divided.
However besides the uncertainty of the distribution, intestacy adds considerable complication and delay, resulting in a significantly higher cost of administration of the estate. The additional cost is much higher than the price of a Will.
Now, where have we heard that before?
(NB all the above comments apply equally to ladies).
