However, you probably haven’t thought about what happens to your business or the money earned in Spain after you’ve crossed over.
Of course, no one wants to think about the end, but it’s absolutely necessary if you’ve gathered wealth and assets within another country.
That’s why in this article we’re going to discuss everything you need to know about why you should draw up a will in Spain, how to do it, and what your beneficiaries would need to know when the time comes.
Keep reading to learn more.
What Exactly Is a Will?
Generally speaking, a will—also referred to as a will and testament—is a necessary legal document. It expresses the who, what, why, and where of your asset and property allocations for when you pass away.
In other words, it dictates who among your loved ones or charity will inherit your money, properties, businesses, and other assets. It also dictates how the taxes on your wealth will be paid.
Of course, your will doesn’t become effective until after your death, which means you can add clauses or amend it as many times as necessary while you’re still alive. However, it’s not something that should be put off to the last minute, especially if you own high-value assets such as real estate or a business with employees.
While a will is a standard document, it may vary in its inheritance regulations or other stipulations both nationally and globally.
In Spain, there are three primary types of wills that an individual may draw up:
An Open Will
An open will is arguably the most common type of will in Spain. The process of writing an open will in Spain involves yourself (the testator), a notary, and two witnesses.
Once your will and testament is drawn up, everyone involved must sign it, and you would receive a copy for your personal files. The signature of the will (not its content) will be notified by the Notary to the Spanish General Registry of Wills
The notary will keep the original copy.
A Closed Will
A closed will and testament are virtually the same as an open will. but the document and all of its contents remain between you and your lawyer.
The testator may keep the closed will in his possession, or entrust its custody to a person he trusts, or deposit it with the authorizing Notary to keep it in his files.
A Holographic Will
Holographic wills in Spain, just like anywhere else, aren’t that common. This is because they don’t generally hold up in court since they are either spoken out loud among witnesses or handwritten.
In the unlikely case that you would write your own holographic will, you would need to sign every page. During the time of your passing, your handwriting would have to be verified for the will to hold any legitimate legal standing. It would also have to have been verified by the witness there at the time of its writing.
For this reason, holographic wills aren’t typically recommended.
Why Do I Need a Spanish Will?
Truthfully, it doesn’t matter what country you’re living in. If you own any assets in another country or pay taxes there, it’s strongly advised to have a will drawn up in that country.
As mentioned earlier, your will and testament determine how your wealth and assets will be distributed after you’ve passed. It acts as a contract that protects your assets, rather than leaving them to the country and city’s existing laws.
For example, let’s say you move to Spain and buy a business or start your own. What would happen to that business should you meet an untimely demise? What will happen to your employees? Your business name? The loved ones that may also benefit from your business, financially speaking?
This is technically where the inheritance law comes into play. However, things become especially complicated when you live in one country and have a business or important assets in another.
That’s why you should not only have a will drawn up as a protective measure, but you should also take the time to understand any relevant regulations that are involved in executing a will in Spain.
Wills and Inheritance In Spain
So, how do wills and inheritances work in Spain?
The first thing you need to be aware of is the Spanish Inheritance law—also referred to as the Spanish Succession law. The Spanish Inheritance law essentially states that if you are an official resident of Spain and you pass away, your descendants will be the first to automatically inherit a part of your estate.
It’s important to note that the Spanish Inheritance Law comes into play if you don’t have a Spanish will. If you’ve drawn up a will for your assets or properties in Spain, the inheritance law won’t come into effect.
In terms of the succession structure should you die intestate (without a valid will), this is how things would go for the distribution of your assets:
- Any children you have would receive a fixed part of your assets, wealth, properties, etc. The part would depend on which Spanish region you had lived.
- If you do not have any children, that percentage would go to your parents or grandparents or to your spouse depending again on where in Spain had you been living. In some cases, parents or grandparents have priority to spouses and in other cases spouses go first.
- If you do not have a legal spouse, then your assets would be distributed among your siblings
- If you do not have any sibling alive, then your assets would go to your nephews, if any.
- If you don’t have any of the family listed above, then 100% of your wealth and assets are taken by the Government
Keeping all of this in mind, it becomes rather obvious why having a will in Spain is so important.
What Are the Benefits of Having a Will In Spain?
Once again, if you’re an expat living in Spain with assets—whether it be part-time or full-time—having a legal will and testament is necessary.
However, the benefits go beyond simply ensuring the proper distribution of said assets. For starters, having a will save you a whole lot of time and money, as well as the hassle for the loved ones you end up leaving behind.
Let’s take a closer look at the benefits of having a will in Spain:
It’s Exclusive to Your Spanish Assets
What does this mean and why is it significant?
When you have a Spanish will, that will is only linked to whatever you own in Spain.
For example, maybe you’re originally a citizen of the United Kingdom or the United States. However, you own real estate or a business in Spain as well as your home country.
In this instance, your Spanish will won’t cancel out the will you have elsewhere. Therefore, you can rely on your Spanish will to dictate what will happen to your Spanish assets and your Spanish assets only.
Of course, if there are specific clauses in your home country will dictating certain aspects of your Spanish will, they may or may not take precedence. It all depends on the country and the clause—which is why it’s necessary to maintain the same clause in both wills.
To reiterate, your Spanish will and testament only dictate the future of your assets in Spain. It will not dictate the future of your assets elsewhere—even if you own a franchise of same-name businesses throughout various companies in Europe.
You’ll End Up Saving A Lot of Money
Regardless of whether you’re a resident or non-resident of Spain, you’ll always have the inheritance law as your backup.
However, having a specified will is much more beneficial considering the inheritance tax to be paid after the fact.
Essentially, whenever an individual inherits assets in Spain, they must pay an inheritance tax on those assets. This is the inheritance tax, and depending on the region your assets are based in, the exact percentage varies.
Some regions, like Madrid, have extremely reduced their inheritance taxes so that the individuals inheriting the assets pay next to nothing.Other regionshave much larger percentages and even allowances—and that’s aside from the percentage and allowances the Spanish government sets as a whole.
So, what does this all mean for you, the testator of your will?
Any taxes you paid on your assets, whether they be property, business, etc., that was more than what you actually owed, that difference can be reclaimed once the will becomes active.
Additionally, your inheritors will have up to six months after you’ve passed to pay any inheritance taxes owed. An extra six-month extension can also be granted should the inheritor need more time, or they can opt for a payment plan over a five-year period.
So, not only will your inheritors save money on the assets you’ve left behind for them, but they’ll have options in terms of paying those taxes if they need support.
There’s No Waiting Period
In certain countries, you need a document known as a Grant Probate in order to pay and accept the assets you’re inheriting. This process can take up to six months, in which case you’d likely be charged tax penalties for not making the inheritance tax payments.
In Spain, the execution of the will happens immediately. That means your loved ones won’t have to worry about waiting to accept their assets and incur fees for not paying their inheritance tax on time.
What Happens if You Don’t Draw Up a Will In Spain?
As we’ve stated multiple times throughout this article if you don’t plan and draw up a legal will in Spain for your assets within the country, they will be subject to the Spanish inheritance laws (or the intestacy laws of Europe).
While this may not seem like such a big deal, it could mean that your assets and wealth will be mishandled after you’ve passed. This is something that could affect your loved ones in need or your employees if you own and operate a business within the country.
What If I Already Have a Will Elsewhere?
Another common concern is what happens when you have a will and testament in another country. Having a will in another country is also a reason why so many expats don’t really think twice about drawing one up in Spain.
However, having a will and testament in another country does not transcend oceans and borders. What this means is that your will does not govern your assets in Spain. Even if you have a clause that refers to a property or business within Spain, it may not hold up legally.
Additionally having a will in Spain does not invalidate the will you have in your native country.
You can think of your Spanish will as a supplementary will, as it only applies to the assets you own and pay taxes for in Spain.
So, even if you have a well-planned will and testament in your home country, you still need a separate one for any existing assets and wealth in Spain.
How to Make Your Spanish Will
Even as an expat, drawing up a will in Spain is a pretty straightforward process. All you have to do is choose the type of will you want to create and communicate your wishes for how you want your assets and wealth to be distributed to the notary.
Essentially, there are two steps to drawing up a will in Spain:
- Preparing the document with your wishes and directions for the distribution of your assets and wealth
- Having it reviewed by your lawyer and signed by the notary and witnesses
Of course, it’s also a good idea to throw some tax planning into the mix so you can better define your after-life contract. This is where an international lawyer becomes necessary.
While writing a will for your wealth in Spain is as simple as the two steps above, it can be easy to forget things or overlook critical aspects of what you’re leaving behind.
Here are a few tips for drawing up a well-planned will:
- Make sure that it complies with the European Directive 650/2012. This is especially important if you have children and a spouse in the country.
- Make sure that it protects all the parties you’ve listed. In other words, if you have children from a previous marriage whom you wish to leave some of your assets to, ensure that the writing in your will cannot be contested by a beneficiary.
- Revise your estate planning accordingly with tax and exemption rates in your region to protect your beneficiaries from paying a hefty inheritance tax.
- Make sure you understand that there’s a significant difference between being a resident and a non-resident in terms of your inheritance tax declaration.
- Do not, under any circumstances, mention if there is a trust. This will cause complications and likely end in complete disaster.
- Triple check that your solicitor has extensive experience with probates as well as the Spanish Inheritance Tax laws and offices. Otherwise, mistakes will be made when it comes time to execute the will.
- Keep it simple. Anything overly complex will likely confuse both your solicitor and your family, ending in another disaster.
- Have your lawyer review everything before signing and handing it over to a notary. This is to ensure you haven’t left anything out and that all of your assets and wealth are accounted for.
Don’t forget, it does cost money to draw up a will since you’ll be involving an official notary, lawyer, and most likely an official translator. So, be prepared for the potential expenses—and don’t forget to periodically review your will and amend it as needed.
For the Benefactors: How to Accept Your Inheritance
Understanding how to write your Spanish will and all of the factors involved is the easy part. However, it’s also incredibly important that whoever is listed as a benefactor in your will understands how the process works once the will becomes active.
For the beneficiaries to accept the will and Spanish assets as expats, there are four essential documents needed:
- A copy of the will from your origin country
- A Grant Probate
- A certificate of legal compliance (el certificado de ley). This certificate explains the legal process in your home country so the probate can ensure nothing overlaps or interferes, legally speaking
- The NIE number, which is a basic identification number needed for any legal purposes involving taxes in Spain
Remember, the above documents are for expats living in Spain. If your beneficiaries do not live in Spain, it’s important that you verify with your lawyer and solicitor what they’ll need to do to legally accept their inheritance.
There are also general documents needed for the acceptance of the will and assets. These documents are necessary for the beneficiaries to pay their inheritance tax as well as to become the owner of their newly inherited assets.
The documents needed for this are as follows:
- A copy of the testator’s last will, provided by the notary
- The original death certificate—not a copy—from the Civil Registry
- A document from the Last Wills Registry that acknowledges that there is a testament and names the beneficiaries and the notary who signed the will
- The life insurance certificate, if the testator had taken out a life insurance policy
When the beneficiaries provide these documents to the solicitor, they will be given what is called La Escriture de Aceptación de Herencia—or, the Deed of Declaration of Acceptance of Inheritance.
This document in specific is what the beneficiaries will need in order to pay their inheritances taxes. It’s also what will allow them to officially accept their inheritance.
It’s Never Too Early
You may think that you’re too young to have a will or even think about the end. However, anything can happen, and in the event that something does happen, you want to ensure that your assets and wealth are protected—as are your beneficiaries.
When it comes to drawing up a will in Spain, let us help you. We have a full team of English-speaking experts that specialize in everything from relocation, real estate, economics, and of course, Spanish law.
Contact us today to learn more about how we can help you protect your assets with a will in Spain.