November 12th, 2014
In preparation for dealing with the
administration of estates which include Spanish assets, it can be useful to
have an overview of the Spanish probate process- to be prepared; and to avoid
surprises.
Ten key procedural stages in the
Spanish probate process are:
1. Collating Documentation and
Information. As with any estate succession,
thorough preparation at the outset is essential. Principal items to locate/
cover for Spain typically include: Death Certificate; Will; title deeds for
Spanish properties (‘escrituras’); most recent property rates receipt; Spanish
registered vehicle documentation; asset valuations; bank account details (and
official extract covering the date of death); full details/ date of death
statements for any Spanish loans, mortgages, investments; and Spanish fiscal
number certificates (N.I.E’s) for deceased and beneficiaries. If the deceased
left no Spanish Will, then an official sealed copy of the UK Grant (with UK
Will annexed, if applicable) may be required; and possibly further proof of
legal status and relationship with the deceased (e.g. Birth and Marriage
Certificates).
2. Signature of Power of Attorney. A professional 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. UK estate administrators may also need to be
represented in Spain (under Power of Attorney), in addition to beneficiaries.
Usually, experienced Spanish practitioners will have arrangements in place with
UK Notaries’ Society members and The Foreign and the Commonwealth Office, to
enable the Power of Attorney to be signed just as easily in the UK as in Spain-
for signatories’ convenience. Generally, the entire Spanish legal process can
be conducted without the need for UK executors/ beneficiaries having to go to
Spain.
3. Obtaining N.I.E’s. As indicated, a Spanish fiscal number is required by
each estate representative/ beneficiary. Often seen as a significant hurdle,
but experienced Spanish practitioners will have a system in place for these to
be simply and rapidly obtained- including within the UK.
4. Spanish Central Wills Registry
Search. An obligatory early step in
the process is that a search must be carried out to confirm the existence or
absence of a Spanish Will. If it is revealed that there is a Spanish Will, but
no official copy can be found; then usually a copy can be obtained via the
Spanish Notary.
5. Certification of Law and Official
Translations. Any non-Spanish legal
documents which are required to prove beneficial 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 (if there is one),
is that it reduces the complexity and extent of the documentation, which has to
be produced to the Spanish Authorities. In many cases, the Authorising Spanish
Notary will require a Certificate of English law, confirming the legal
entitlement of the beneficiaries and/or to provide any case-specific comfort as
may be required on cross-border legal issues.
6. Opening of Client Bank Account. It is fundamentally important before provision of
client funds, to ensure that the Spanish probate representative operates a
client accounting policy/ facility which fully protects the estate and the
beneficiaries. The standard obligatory requirements in Spain can be less
extensive than in the UK.
7. Execution of the Inheritance Deed
before the Authorising Spanish Notary. Generally,
the procedural urgency in achieving the signature of the official Inheritance
Deed and concluding the Notarial process, is that this then enables the Spanish
Succession Tax to be paid. Payment of the tax must be made within 6 months of
the date of death, in order to avoid interest/ penalties accruing on the tax
debt. As the tax can generally only be paid once the Spanish Notarial process
is completed, it is critically important that the Spanish process is commenced
at the very earliest stage possible; and proactively pushed forward, to settle
matters with the Notary as quickly as possible. Otherwise, there is a danger
that an unnecessarily inflated Spanish tax liability will arise.
8. Payment of Tax. It is important to have obtained from the Spanish
practitioner at the outset of the case, a detailed estimate of all applicable
costs and taxes. This ensures adequate preparation time for provision of funds,
to enable the tax payment to be made immediately following the signature of the
official Inheritance Deed. In addition to Spanish Succession Tax, Plus Valia
Tax may also be payable. This is a local Spanish Town Hall tax, payable upon
the transmission of a property interest. Most Spanish Town Halls charge this on
inheritance, as well as property sales. It is calculated by reference to the
Spanish property’s rateable value; and the period of ownership. Traditionally,
this was a nominal amount. But with revisions to rateable values in particular,
in some areas of Spain it can be a very substantial amount.
9. Banks. Dealing with bank accounts in Spanish probate cases
can often be the longest and most frustrating part of the process, but this can
only be fully addressed once the Inheritance Deed has been signed and any
Spanish Succession Tax paid. Succession of bank accounts is not addressed at
local bank branch level in Spain. The bank’s central legal department instead
usually 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.
10. Property and Vehicle Registries. Following the signature of the Inheritance Deed; and
payment of any Spanish Succession Tax; applications can be made to the Property
and/or Vehicle Registries, in order for the Spanish estate assets to be
registered in beneficiaries’ names. The Property Registration process in
particular, involves a further level of legal scrutiny. So, in some cases,
additional requisitions can be raised at this stage, beyond matters covered
with the Authorising Spanish Notary earlier in the process.
Conclusion.
The Legal 4 Spain team offers a full
Spanish probate service; and is always available to provide preliminary advice
on a no-obligation basis in relation to probate cases, which include Spanish
assets.
