You may or may not know that a European regulation has been approved to regulate questions of jurisdiction, applicable law and enforcement of all successions where the deceased has passed away on or after the 17th August 2015 (Regulation No. 650/2012 of the European Parliament and of the Council of 4 July 2012).
This regulation can cause difficulties for those foreigners who have not made certain provisions regarding their last Will and Testament, especially for those habitually resident in Spain.
We must pay particular attention to the provisions of Articles 21 and 22 of the regulation. On the one hand, Article 21 establishes that “Unless otherwise provided for in this Regulation, the law applicable to the succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of death.” But on the other hand, Article 22 points out that “A person may choose as the law to govern his succession as a whole the law of the State whose nationality he possesses at the time of making the choice or at the time of death.”
But what is the difference between these two options? And how can this be resolved?
For those of you who don’t know, Spanish inheritance law provides a certain amount of protection for legal heirs which, to those who originate from other jurisdictions, seems completely foreign. Certain inheritors are deemed, under Spanish law, to be what are called “compulsory heirs”, entitling them to a legal minimum share of the deceased’s estate.
The new European regulation sets the place of habitual residence of the deceased as the sole criteria for determining jurisdiction, as well as the applicable law. This being the case, it means that any foreigner that is deemed to be resident in Spain who does not make the necessary provisions in their Spanish Will to ensure the application of their national law on their death, as opposed to that of their habitual residence which is automatic, will be limited regarding the distribution of his/her estate. Even if you are not legally registered as a resident here, the Spanish authorities may consider you to be resident here based on other external factors.
To help you understand this better, here is a practical example of what the application of Spanish law to your inheritance entails.
Let us imagine that you are married with 2 children and the total value of your estate amounts to 150,000 €. Spanish law would require, upon death, that your estate be divided in the following way:
- « Legítima »: 1/3 of estate (50,000€) must be left to all your “compulsory heirs” in equal parts (25,000€ each).
- « Mejora »: 1/3 of estate (50,000€) must be left to “compulsory heirs” but may be distributed in any way the testator sees fit (you can leave it all to one child, to two of them or to all three of them, but to no-one else).
- « Libre disposición » or « Tercio libre »: 1/3 of estate (50,000€) can be disposed of however, and to whomever, the testator wishes (legal heir or not).
There are autonomous regions with their own civil law in this matter, and they are Aragon, the Balearics, Catalonia, Galicia, Navarre and the Basque Country.
What does this all mean? It means that if you have made a Spanish Will, but not included the proper provisions to ensure the application of your national law on your death, any provisions for the distribution of your estate that overstep these limitations under Spanish law will be ignored. This could mean a great amount of inconvenience for your heirs in trying to have your Will recognised on your death.
It is for this reason that it has become strongly advisable for any foreigners with assets in Spain to make a Spanish Will for their property in Spain, or update it if necessary. Make sure to seek appropriate legal advice to make sure it complies with the new requirements of Regulation No. 650/2012 and to avoid the automatic application of Spanish law on death, which can result in your wishes not being abided by because of the legal restrictions Spanish inheritance law places on the freedom of the testator to dispose of his estate at his own discretion.
Gabriella Mary Trussler Rowland
4408 Ilustre Colegio de Abogados de Almería