July 8th, 2014
Discovering that there
are Spanish assets in a non-Spanish estate gives rise to a number of issues in
preparing for the estate administration.
Some key points are:
Location of Death. If the death occurred outside Spain,
then the death has to be proved to the Spanish Authorities as the first stage
of the legal/ procedural work. This enables the compulsory search of the
Spanish Central Wills Registry to be carried out, to establish with certainty,
the presence or absence of a Spanish Will.
Will. A major factor in assessing the
complexity of a Spanish probate case (and of course, actual beneficial
entitlement) is determining whether: there is a valid Spanish Will; no Spanish
Will but a foreign Will covering the Spanish assets; or no Will at all. The
search of the Spanish Central Wills Registry confirms whether or not there is a
valid Spanish Will; and also (if there is), the date and Notarial location of
the last such Will. However, it should be noted that the Spanish Authorities
will admit evidence of later revocation of such a registered Spanish Will by a
subsequent non-Spanish Will. (Hence, drafting of English Wills where there is a
pre-existing Spanish Will has to be undertaken with considerable care).
Location of Assets. Generally, it is unnecessary that the
legal practitioner appointed to deal with the Spanish assets is in the actual
locality of the Spanish assets. Administration of Spanish estates for
non-Spanish individuals is a specialised area of legal practice. So, the key
factor in appointing a legal practitioner is not their actual location, but
that they have the necessary dual-jurisdictional qualification and experience
in dealing with the succession of Spanish estates for non- Spanish individuals.
Asset Type. The exact legal procedures and necessary
documentation in a Spanish probate case will be determined principally by the
type of Spanish assets. In some cases, a simple monetary legacy left in a
Spanish Will can involve the same amount of procedural documentation and legal/
Notarial work as the succession of a Spanish property.
Property ownership. The regime of property ownership in
Spain for multiple owners is the equivalent of tenants in common in the UK.
Spain also has a forced heirship law which may-or may not- apply in dealing
with the Spanish assets of non- Spanish individuals, depending on the
circumstances.
Power of Attorney. A Spanish representative is generally
appointed under Power of Attorney, in order to minimise inconvenience for
beneficiaries, as the Spanish inheritance process involves a significant amount
of personal attendance. Estate administrators may also need to be represented
in Spain (under Power of Attorney), in addition to beneficiaries. The form and
wording of the estate legal documentation will determine this.
NIE Number. Having a Spanish fiscal number is
obligatory for beneficiaries and sometimes for estate administrators also.
Generally the NIE number can be obtained under Power of Attorney, without the
need for the applicant to be personally present in Spain.
Apostille. Non-Spanish legal documents which are
required to prove entitlement (Death Certificates; Grants of Probate, etc) may
need to be Apostilled by the Foreign and Commonwealth Office, in order to be
legally admissible in Spain. In some cases, they must also be translated and
certified by an official translator. An advantage of the existence of a valid
separate Spanish Will is that it reduces the complexity and extent of the
documentation, which has to be produced to the Spanish Authorities in a Spanish
probate case.
Taxation. The Spanish Succession Tax liability in
a Spanish probate case must be very carefully assessed at the outset. The more
remote the relationship between the deceased and the beneficiary, and the
higher the value of the estate, the higher the tax rate. There are other major
differences of approach between Spain and other countries- for example in
Spain, there is no automatic inter-spouse exemption. Also for real estate
interests, in addition to Spanish Succession Tax, there is also usually a local
Town Hall (Plus Valia) tax liability payable on succession. Although post-death
Will variations are not allowed in Spain, depending on the family circumstances
and the estate documentation, it may be possible to achieve alternative
succession routes in the succession process; thus potentially reducing the tax
exposure. Any such strategy in the case handling must be determined right at
the outset, agreed upon with the beneficiaries; and implemented during the
course of the case handling. It cannot be addressed retrospectively.
Banks. Dealing with bank accounts in Spanish
probate cases can often be the longest part of the process. Succession of bank
accounts is not addressed at local bank branch level in Spain. The bank’s
central legal department instead deals with succession matters. Direct contact
with the bank’s central legal department is generally fairly difficult. For the
Spanish banks, succession work is decidedly low priority. So, considerable
patience is required on the part of the practitioner and beneficiaries!
Sale of Inherited
Assets. In order for
beneficiaries to be able to sell registered Spanish assets, the Spanish probate
process must be completed first. For relatively minor estate assets such as
vehicles, this can be inconvenient, as there can be a significant delay, before
a sale can be completed.
Conclusion. As the exact procedures and
documentation are always case-specific, an initial full analysis of a Spanish
probate case is always essential. This ensures certainty from the outset as to
the procedural steps which will be required; and the information and
documentation which will need to be produced. Unless a Spanish probate case is
carefully planned and programmed from the outset; and meticulously managed as
matters proceed, there is a very significant risk of delays. Any such delays
can be frustrating and time consuming for the practitioner; and costly for the
beneficiaries- as Spanish tax liabilities can increase over time, with the
imposition of interest and penalties.
The Legal 4 Spain team
is always available to provide preliminary advice on a no-obligation basis in
relation to probate cases, which include Spanish assets.
