Inheritance in Spain

Nowhere can a bit of forward planning produce such simple and dramatic results as in the area of inheritance. It can save you untold grief and inconvenience - and tens or hundreds of thousands of whatever currency you use to define your wealth. To think about this planning, you need to understand the inheritance rules in your part of Spain.

Click where you see lightbulb image for more information

This guide covers…

This guide covers the rules in Spain concerning who inherits what when you die.

It describes, in particular, who will inherit what in the area of Andalusia/Andalucía – which contains the Costa del Sol. See a map here. Please note that certain aspects of the law in Spain vary from one “autonomous community” (comunidad autónomalightbulb image - click here for more information on this subject to another.

This guide does not cover how to make a will in Spain. See our Guide to Wills for Use in Spain.

Nor does it deal with the steps you must take after someone has died. See our Guide to Dealing with a Death in Spain.

Video guide to inheritance in Spain

You can learn about inheritance in Spain by watching this full-length interview (below) with Spanish lawyer Antonio Manzanares, or by scrolling down and reading the detailed guide that he has written with us.

The video guide below is a playlist – split into several parts. One part will play right after the other.

Inheritance law in Spain

In Spanish law, articles 657 to 1,087 of the Civil Code regulate inheritance law.

Basically, on someone’s death (“the deceased”), their assets are divided into three parts.

  • One third of the net assets (after taking care of any debts or other liabilities) must go to the surviving children, if any, in equal shares.
  • One third must be distributed amongst the surviving children in whatever way the deceased set out in their Will. If there is a surviving spouse, they will have the right to use this third of the assets during their lifetime.
  • The rest of the estate can be distributed freely, in whatever way the deceased expressed in his Will

So, for example, if the deceased had three children, each must inherit a minimum of one ninth of the net assets (the first third divided by three). The deceased could also decide to distribute the second third to his children in equal shares of he could leave all of it to one (or two) of those children, in whatever proportions he chose. As to the third third, he could also choose to give that to his children – in whatever shares he pleases – or he could give it to his wife, his mistress, the church or absolutely anybody else.

If there are no surviving children, other rules apply to the first two thirds of the assets. See below.

However, it is important to understand that, if the deceased was married under the matrimonial regime of “community of property” (comunidad de bienes/sociedad de gananciales), which is the default regime for matrimonial property in Spain (though things are different in some Spanish regions such as Catalonia and the Basque Country), half of the decedent’s assets do not form part of the estate, but continue to belong directly to the surviving spouse. In these circumstances, the surviving  wife (or husband – it could be the other way round) is well provided for and the children inherit part of the family’s assets when their father dies and part when the mother dies.

On the other hand, if your matrimonial regime is “separate ownership of property” (separación de bienes), things can look very different. The husbands assets are his as pass directly to the children, with the  surviving wife only having the right to use some of them during her lifetime. Once again, of course, it could be the wife who has lots of assets and who dies first, so it would be the husband whose position was weak.

See out Guide to Matrimonial Regimes in Spain for more information.

The Legítima

The portion of your assets that  cannot be freely distributed is know as the legítima.

Certain relatives on your direct blood line (ascendant – through parents or grandparents – or descendant – through your children) and your spouse have the right to receive two thirds of your inheritance, regardless of what you say in your will.

This legítima is divided into:

  1. Legítima estricta, which is one third of the inheritance. This must be distributed as required by the law and in the proportions required by the law.
  2. Tercio de mejora, which is also a third of the inheritance. This can be distributed, broadly as you please, to such of the people entitled to the legítima estricta as you may choose and in such propostions as you may choose.

Any surviving spouse (widow or widower) has the right to, as a minimum, the use of (but not ownership of) the tercio de mejora.

In order to decide who is entitled to inherit the legítima you need four pieces of information:

  1. Which set of rules apply.  As we have already said, different rules apply in certain parts of Spain: Aragón, Catalonia, the Basque country, Galicia and the Balearic islands.
  2. Did the ceased make a Will?
  3. Was the deceased married?
  4. Did he have children?

This guide deals only with the ‘normal’ rules in Spain. As to what happens in the other regions, see our guides to those regions.

Tercio de libre disposición

In regards to the remaining third of the inheritance (tercio de libre disposición), the deceased is free to leave it to whom he wills. In that sense, there is freedom of testation mortis causa (by reason of death), whenever the legítima is respected.

If there is no Will (intestacy), the regulations of the civil code must be followed and the relatives indicated on it will be the heirs.

Together with the succession system regulated by the civil code, in our country there coexist the different systems established by foreign laws.

In general terms, within the scope of their own national inheritance laws, those systems grant the deceased more freedom when making a Will than would be offered to a Spanish person in Spain. It is often possible for foreigners living in Spain, or with assets in Spain, to take advantage of these more flexible arrangements.

I repeat that there are also significant regional variations of inheritance law in Spain. The laws vary from one autonomous community lightbulb image - click here for more information on this subject to another. For example, a specific case is the regional law of Navarra, where the testator has absolute freedom of disposition of his assets, except in regards to children from previous marriages and the requirement for fidelity established in favour of the surviving spouse.

These variations in the law mean that it is (especially for foreigners) often possible to bypass completely the Spanish rules restricting who can inherit what on a death.

See our Guide to Inheritance Planning in Spain.

The standard Spanish rules for inheritance

If there was a Will

If the deceased had children

The rules explained above apply.

The children (or the grandchildren if a child has died) must inherit one third of the estate in equal shares.

They must inherit another third between them in whatever proportions the deceased stipulated in his Will. However, if there is a surviving spouse, that husband or wife will have a usufructo – usufruct, in English – over that part of the assets. An usufructlightbulb image is, basically, the right to use those assets during their lifetime so that the children can only dispose of them after the surviving spouse’s death.

The final third can be given away as the deceased saw fit.

If the deceased did not have children

When the deceased died without surviving descendants (children or grandchildren), the surviving ascendants (parents, grandparents and – through them – their descendants) must inherit:

  • One third of the estate, if the deceased left a surviving spouse
  • and half of the estate, if the deceased had no surviving spouse

When there are neither descendants nor ascendants, the surviving spouse shall inherit the usufruct of two thirds of the estate.

The rest can be disposed of as the deceased stipulated in his Will.

It is important to stress that, according to the Spanish law, the will can only modify the destination of the assets when the legítimas are complied with, as those are imperative. In other words, if (by the general law) your children are entitled to inherit two thirds of your estate – one third in equal shares and one third in such proportions as you may choose – you cannot cut them out by your will. The most you could do would be to give one third to your children in equal shares and everything else to just one of your children. That would comply with the legítimas.

The only exception to this is if a small number of very specific circumstances arise. These are dramatic and very unusual.

It is always possible to name other heirs for the freely disposable part of the inheritance.

If there was no Will (intestacy)

If the deceased died leaving no valid will, the Spanish law of succession determines who must inherit. These rules also apply if there were assets not covered by the will, if the heirs decline to accept their inheritance and in certain other situations.

The Spanish laws of succession set out a hierarchy of inheritors:

  1. The deceased’s children will inherit in equal shares. If one has died, their descendants will inherit their share. All children, natural or adopted, have the same rights.
  2. Parents or grandparents will inherit, in equal shares, when the deceased dies without leaving children.
  3. The deceased’s spouse will inherit if the deceased left neither children nor parents/grandparents.
  4. Brother & Sisters will inherit If the deceased did not have descendants, ascendants or a spouse. His brothers and/or sisters will inherit equal shares of the estate. If they have died, their children will inherit their share.
  5. Cousins will inherit if there are none of the heirs mentioned above.
  6. Finally, if all else fails, the Spanish Government will inherit!

Current European regulations

European Union (EU) regulations have significantly altered the original Spanish rules.

The European rules about inheritance came into force with the European Regulation 650/2012.

From 17 August 2015 the applicable law, in general terms, that rules successions with cross-border consequences will be the law of the country where the deceased had permanent residency at the time of his death.

Permanent Residency

The European legislator does not establish an independent and self-contained definition of this point of connection needed to establish permanent residency. This is because they realise that it all depends upon the facts of each case. They, therefore, try to give guidance to those who must make the decision.

  • There must be a physical presence of the deceased in a specific State.
  • The European legislator does not establish a minimum stay to be considered as “habitual” residence. However, the time of residence must be significant.
  • Presence must be persistent, not a mere temporary residence.

So what must the legal practitioner do in order to determine habitual residence of the deceased on a cross-border succession?

  1. He or she will have to make a general evaluation on the circumstances of the deceased’s life.
  2. Over which period? During the years before he died and at the time of the death.
  3. What must be taken into account? The duration and consistency of the presence of the deceased in the relevant State and also the conditions and cause of the stay there.

The habitual residence thus determined should reveal a narrow and solid link with the State in question.

This evaluation of the objective circumstances surrounding the life of the deceased must always be carried out.

For example, for foreign retired individuals residing in Spain and whose social environment is largely limited to people from their home country, the point of connection mentioned in this regulation is likely to be the State (territory) where the deceased had his habitual residence at the time of his death. This will usually be the State where he/she is living, even though his social life is limited to their people from his own country.

For example, a British person residing in the Canary Islands, despite the fact that he does not speak Spanish and is almost exclusively in contact with other British people – and even though he keeps his British customs and habits and buys and consumes in shops and restaurants run by other British people – is likely to be treated as having his habitual residence in Spain.

Note that the “habitual residence” referred to in this regulation is not the “domicile” established by the United Kingdom Common Law.

The domicile of origin in the United Kingdom involves a narrow tie that links the individual to the legal system of a State (say the UK or France) or a territorial unit within a State (say England or Scotland within the UK).

For that tie to be broken and substituted by a domicile of the individual’s choice, it is necessary that he makes the residence in the new country his only and main residence, and that he does it with the intention that the residence will be permanent and indefinite; the clear and free intention of not returning must be proven.

Therefore, a British person can have his habitual residence in Spain but still keep his domicile in England, Scotland, Wales of Northern Ireland. If there is doubt when deciding the deceased’s domicile, there is a strong presumption of keeping the domicile of origin.

By contrast, Regulation 32 of the Regulations warns that, when using the concept of “nationality” for determining the applicable law, it is convenient to bear in mind the fact that certain States, whose legal systems are based on the common law, use the concept of “domicile” and not “nationality” as a guideline in the scope of succession.

Choosing the applicable law for your inheritance in Spain

All of this could be a disaster for those who would otherwise enjoy liberal rules allowing them to pass their assets, freely, to whoever they wish.

Fortunately, there are solutions – but you need to take action to take advantage of them.

The regulations allow people to choose the applicable law for the whole of their inheritance. This is in Article 22:

  1. 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.A person possessing multiple nationalities may choose the law of any of the States whose nationality he possesses at the time of making the choice or at the time of death.
  2. The choice shall be made expressly in a declaration in the form of a disposition of property upon death (Will) or shall be demonstrated by the terms of such a disposition.
  3. The substantive validity of the act whereby the choice of law was made shall be governed by the chosen law.
  4. Any modification or revocation of the choice of law shall meet the requirements as to form for the modification or revocation of a disposition of property upon death.

This is an incredibly powerful provision and really useful for many foreigners with connections to Spain. It means that, for example, a British person could say in his Will that he wants English law to govern who should be entitled to inherit what. Because English law, basically, gives complete freedom to leave your assets as you please, this means that you can completely bypass the restrictions in the Spanish system. A person who is dual national French and Canadian could choose either French or Canadian law.

The law chosen does not need to be the law of an EU member state – so an American could choose US law.

You need good legal advice before making this decision.

The effect of making this choice

The choice is applicable to all cross-border successions, regardless the nationality, domicile or residence of the deceased or the place where the assets are located.

The choice is applicable applicable to the whole inheritance – i.e. to assets in Spain or in any other country.

Conclusion

The Spanish way of dealing with an inheritance is similar to that in a lot of Mediterranean countries but has important differences. It is very different from the systems adopted in most Anglo-Saxon countries.

Dealing with an inheritance in Spain – and deciding who will inherit what – is complicated, and depends on many different factors. It is a is a complicated process even for the Spanish, who normally use a lawyer for dealing with it.

This is why it is of most importance to seek legal advice at an early stage, in order to ensure that all the formalities are complied with. The savings of time and money by getting this right can be huge.

Leave a Reply