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Dealing With Spanish Probate

Probate in Spain Posted on Thu, February 02, 2017 15:29:55

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.



An Introduction to Spanish Probate

Probate in Spain Posted on Thu, February 02, 2017 15:23:20

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.