REAL ESTATE PURCHASE & SALE WILLS AND INHERITANCE TAXATION CORPORATE LAW

Wills & Inheritance in Spain

– Does the legal concept of trust exist in the Spanish Law system?

No. Spanish Law does not have an equivalent to the trust. The closest entity would be a foundation, which in Spain must have a public purpose, so that the beneficiary must be the general population. Unlike the trust, if a foundation is dissolved, its assets are not distributed among the beneficiaries.

 – Is there a deadline to pay the Inheritance Tax?

Yes. Inheritance Tax must be settled within six months from the date of death. An extension for another six months can be granted upon request of the taxpayer. The application for the extension has to be made within five months as to the date of death and it will have to be approved by the relevant Tax Department. If the extension is granted, default interest shall accrue.

 – Are the heirs responsible to pay the debts of the deceased?

Yes, unless the inheritance is accepted under benefit of inventory, in which case the debts are paid and the remainder, if any, will be inherited.

 – What is a lifetime usufruct?

Usufruct is the exclusive right that someone has to use and enjoy during lifetime an asset whose ownership is not held by the person in question. In these cases the owner (called bare owner) holds the ownership, but cannot use or enjoy it while subsisting the usufruct. The most common usufruct happens when one spouse dies having named as heirs their children. The surviving spouse becomes the beneficial owner and holds the right to use and enjoy the property during his/her lifetime.

 – Could the surviving spouse waive their inheritance rights in favor of their children?

Yes. They need to agree this disposition in a public title deed.

 – Can the heirs divide the estate in a different way than such set by the testator in the will?

Yes, provided that all the heirs are of legal adult age, agree to do it and are legally capable.

 – Could I sign several wills? How do I revoke a will if my circumstances change?

Yes, you can sign and revoke as many wills as you want. When you sign a new one, those signed before are automatically revoked. Wills executed before a Spanish Notary Public will be registered in the Register of Last Wills in Madrid. Upon your decease, the only valid will be that one appearing on the register as the last signed.

 – Do I need to indicate all my Spanish assets in my will?

It is not necessary. When the testator is a foreigner individual non-resident in Spain, it is customary to refer to the properties and rights that he/she may have here in general, without specifying any. Thus, if the assets change, it will not be necessary to execute another will.

 – Where is my Spanish Will kept once it has been signed?

The original will shall remain in the protocol and under the custody of the authorizing notary. You will get a copy stamped by the notary. Furthermore, execution of the will shall be recorded in the Register of Last Wills in Madrid. In this way, beneficiaries may have access to it from death, upon request.

 – I have under age children. Can I appoint a guardian in my Spanish Will? If so, can they dispose of the goods until my children are of full age?

Yes, you can appoint a guardian in your Spanish Will, but he/she will have to accept the position later. The guardian will need judicial authorization to perform acts of disposition of the minor’s assets.

 – Can a bank freeze accounts of a deceased person?

Money deposited in accounts is an asset of the estate and, therefore, the bank is legally bound to block them until it has been confirmed with the proper documents who the legal heirs are and only when the inheritance tax has been settled. In any case, the accounts will usually be operative, i.e., money can be deposited in them and standing orders and direct debits will still be charged against them.