If you build yourselves a house in Spain, in
theory, the Spanish law of enforced inheritance will restrict the disposal of this property as it does for Spaniards. This is simply because
most countries apply the law of the land where the property is
located. However, Article 9 of the Spanish Civil Code provides
that when a foreign property owner dies, even if he holds an official
residence permit, the disposal of any assets he has in Spain will
be governed by his own national law, not Spanish law.
If
your own country's law permits free disposal of the estate, this
frees you from the Spanish law of compulsory heirs. Both the English
and American laws provide for free disposition of assets but Scottish
and German laws require some part of the estate going to the children.
Whilst this is very good news for the English, it does not unfortunately
free them from Spanish inheritance tax.
This
freedom to dispose of assets as you wish only applies if there
is a current Spanish or foreign will. To die intestate will result
in Spanish law being applied and assets being distributed among
the children. So far so good but now the situation becomes a little
more complex because a number of countries including Great Britain
have laws which say that the disposition of real property such
as land, houses and apartments will be governed by the laws of
the country where the deceased is legally domiciled at the time
of his death.
So
on the one hand we have Spanish law saying that English law will
apply and on the other hand English law saying that Spanish law
will apply because that's where the property is located. In theory
an Englishman is subject to the Spanish law which means he can
freely dispose of only one third of his assets in Spain.
This
is the theory but in practice things are different. Any foreigner
can make a Spanish will bequeathing his Spanish property to any
person of his choice as long as his own national law is ruled
by the principle of free disposition of property by testament.
The Spanish Registrar of Wills accepts this. Come the time, the
will is executed and the inheritor takes possession of his new
property. Spanish lawyers routinely make such wills. In a nutshell,
this means that if you are British, you can make a Spanish will
leaving your Spanish property to whoever you choose.
However,
something to bear in mind is the fact that if you leave your property
to your favourite daughter and cut out your black sheep son, it
could be that he takes expert advice and contest the will on the
grounds that Spanish law stipulates that half of the inheritance
is his and win his case. This situation can be avoided by transferring
the title deed of the property to your chosen heir while you are
still alive. Remember, where there's a will - there's relations!
When
making a will do take the very best legal advice you can afford.
Don´t assume all lawyers are the same they are not. Carrying
out your instructions are not the same as advising you in your
best interests. This
important subject is dealt with in great detail in David Searl's
book "You & the Law in Spain". ISBN: 84-89954-41-0.
Available at all good UK bookshops and throughout Spain.
One thing is certain. Anything you do or don't do now in regard to the disposal of your possessions and Spanish property is not going to have any effect at all on you should you be unfortunate enough to die for any reasons. As for your loved ones and relations, the same cannot be said. Not leaving a clearly defined and legally drawn up will can involve them in years of probate hassle, the cost of which quite easily could consume most if not all of the assets. You may not wish to think about your own demise or believe you have time enough to sort things out but the simple truth of the matter is that whilst we know that the clock ticks for all of us - no one knows when it will stop.
As a routine, all SPC clients are advised by lawyer on the situation regarding the house they may build and whether or not a will is appropriate. At this stage they can start to give careful thought to any action they may like to take.
