Escape to an Island in the Sun

Wills and Inheritance

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Where there’s a Will…

Several of our friends have died this year. It comes to us all eventually; death, that is. As the old adage goes, ‘the two certainties in life are death and taxation’, and the death of family and close friends certainly concentrates the mind. Without being too morbid about the issue, I guess the only way to deal with it, as it is a certainty, is that we had better ensure that we make a good job of it, and not create too much of a burden for others after our passing.

A few days ago, I received an email from a recently retired British couple, who had moved to Spain and needed a will to cover their new property. They asked if they could simply update their UK wills, or whether they need to have new ones prepared especially for their new assets in Spain?
 
There seems to be considerable uncertainty amongst many expats, who think that as they have a will in the UK, there is no need to have one in Spain. I still even meet expats who boast over their gin and tonics that they have no written wills at all, and that Spanish inheritance laws will deal nicely with the issue when the time comes. Maybe this is the case, but only after considerable expense and distress for those that they leave behind.

This often-held view about inheritance laws may be partly true if the transfer of the estate is a simple one; for example, from husband to wife. However, it is not without considerable expense and delays for heirs if there is no Spanish will and executors have to rely on a UK will. The reason is that Spanish inheritance laws are very different from those in the UK, and that there is no guarantee that assets will be distributed in the way that the deceased had intended.
The message is clear; it is important that expats with property or other assets in the country make a Spanish will. Having a Spanish will does not mean that your UK will is forgotten. However, your UK will would be concerned only with those assets that you still own in the UK, whilst your Spanish will would deal with your Spanish property and assets. Needless to say, it is very important that you continue to update both wills should circumstances change, such as separation, divorce or death of a partner.

It is important to remember that if an update to your UK will is required, your Spanish will is not revoked in the process. The best way to overcome this issue is to ensure that the first clause of your UK will has words to the effect of “I revoke all my earlier UK Wills, but not my Spanish Will”, or words to that effect.

In many of the expat destinations in Spain there are a number of people who will offer to prepare your Spanish will for you. Be careful with this one; my best advice is to have it prepared by a suitably qualified Spanish lawyer, and registered at the Central Wills Registry in Madrid.

ASSETS IN SPAIN

This section is of particular importance to those who owned property jointly with the deceased.

Firstly, apply to the Registro Civil in Madrid for the Certificado de Ultimas Voluntades.  The easiest way to do this is through a gestoría who will send them an original copy of the death certificate with full details of the deceased.   However, the appropriate official form, which has to be completed, and an envelope, can be obtained from a tobacconist, if you have sufficient fluency in Spanish to do it yourself.  The death certificate will be returned from Madrid with the Certificado de Ultimas Voluntades. This usually takes about two to three weeks. 


When the certificate arrives, take it to a notary where the inheritance deed (Escritura de Aceptación de Herencia) will be prepared.  This is the deed that has to be signed by all heirs (or their representatives) simultaneously, to confirm that they accept their inheritance.  Any heirs not in Spain can appoint a representative (holding their power of attorney) and this can be arranged by their nearest Spanish Embassy or Consulate. 


To prepare this deed, the notary will need full details of all assets, deeds and the last Urban Tax receipt for any property, documentation covering bank accounts, shares, etc.  Be sure you understand exactly what is required so that the Escritura de Aceptación de Herencia is correctly prepared.  Once the Escritura de Aceptación de Herencia has been signed, you will be given an original, plus several official copies.   These must be taken to the tax office to pay the death duties.  Remember death duties must be paid within six months of death or surcharges will be applied. 


If you are unable to complete the Escritura de Aceptación de Herencia within this time, you can present an autoliquidación by going to your nearest Spanish tax office, completing the appropriate form and paying the estimated taxes.  These taxes will be adjusted later when the deed is available. 


If property is involved, proof that any tax has been paid, plus the stamped inheritance deed must be taken to the Property Registry (Registro de Propiedad) so that the name(s) of the new owner(s) of property can be registered.  Another copy of the inheritance deed must then be taken to the local Town Hall to pay the (Plusvalía) tax.  This must also be paid within six months.  It is advisable that you rely on professional advice in all these matters.

ASSETS IN THE UK

If the deceased made a U.K. will and appointed an executor, that person should be contacted immediately and sent an original copy of the death certificate ratified by the local British Consular Office.


NOTE: The British Consular Office should ratify all death certificates sent to the UK because they will be in Spanish unless, of course, an official translator has already translated them.


If no executor was appointed, or you are the executor, you have two options:
a. You can appoint someone in the U.K. (usually a lawyer) to act on your behalf by power of attorney. b. You can deal with the matter yourself.

In the case of the latter, apply to the Probate Office for the necessary forms. You will have to attend the Probate Office for a personal interview, so it is advisable to select an office within easy reach.  The forms come with complete instructions but, if you are unsure of how to proceed, consult an expert.


At present, death duty is payable on estates in the U.K. valued at over £200,000. An extra stamp duty form (for the Inland Revenue) must be completed in this case. 


Any death duties due must be paid within six months of death.  If, for any reason you are unable to complete the probate forms within this time, contact the Inland Revenue and pay them the estimated tax amount.  Any difference will be adjusted later when the probate forms have been completed and probate granted.

DEATH WITHOUT A SPANISH WILL HAVING BEEN MADE

A Grant of Probate must be obtained from the Probate Office in the UK in order to prove who has the right to any inheritance. The documents must be translated into Spanish by an official translator and have the ‘Hague Convention Apostille’ attached. To seek a public deed of inheritance, the Spanish solicitor will require the following:


A grant of Probate.
A Death Certificate for submission to the Ministry of Justice to establish if a will was registered with them. A Certificate from the Ministry of Justice, which will certify if a will exists.
The title deeds of any house or property in Spain.
A certificate from each bank where accounts exist stating the details of the balance of each.


The importance of making a Spanish will cannot be stressed enough, because it simplifies the winding up of the estate following a death.

Some couples hold bank accounts in joint names. Inheritance Tax is payable even on these accounts. The account or half of the money in the account may be frozen in the event of one spouse dying, once the next of kin has notified the bank. Therefore, open a new account at a different bank, before advising the bank about the death. The new account should be in the name of the surviving spouse using the money from the existing joint account. However, sufficient funds should be left in the joint account to cover any immediate standing orders and cash transfers to cover future standing orders should be arranged from the new account.


Make sure that any pension companies or other income sources in the UK are advised of the details of the new account.

New contracts should be signed with the central services i.e. water, electricity and new standing orders should be arranged from the new bank account.

Important Update - September 2015

The Wills of foreigners who are fiscally resident in Spain now need to contain a specific clause of preference about which national law should apply to their affairs in the event of their death: most British people, for example, would want ‘British law’ (i.e.. the law applicable in England and Wales, Scotland or Northern Ireland) to apply. The requirement for a direct statement of preference is a result of EU regulation 650/2012, which comes into force on the 17th October 2015.

Whilst new Wills have had this clause in them for some time in readiness for the application of the regulation, it was not clear to me that existing Wills would need to be amended, but I have now had legal opinion from a notary that existing Wills – those drawn up before the clause was added routinely – should be redrafted to be sure that the appropriate law will apply.

To be specific:
  • anyone making a new Will will find that this clause is automatically inserted;
  • anyone with an existing Will drawn up in the last year or so should check their Will to ensure that the clause was inserted;
  • anyone with an older existing Will, or a recent one without the clause, should get a new Will drawn up if they wish to ensure that British law applies to their Will in the event of their death.

Please note that this applies only to those who are resident for tax purposes in Spain. Non-residents do not need to be concerned about this because under the EU regulation the law applicable to their Wills will be that of the country in which they are resident – i.e. the UK.

IMPORTANT

This information is given in good faith and is intended for general guidance and support only. Different rules may apply to different regions in Spain. Regulations change regularly and so, if in doubt, always consult a professional.

If you enjoyed this article, take a look at Barrie’s websites: http://barriemahoney.com and http://thecanaryislander.com or read his latest book, ‘Footprints in the Sand’ (ISBN: 9780995602717). Available in paperback, as well as Kindle editions.
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