Wills for All Countries
Why Do I Need a Will?
For Your Heirs
Prepare a Will, and a List of Your Assets with identification numbers, so your Heirs can find them and prepare your estate for Probate. Otherwise they’ll have Ann’s dilemma below.
So your assets pass to the Heirs you choose. Without a Will, they pass according to the law where the assets are located and you’ll have John’s dlemma below.
The Importance of a Will – A True Story
John died suddenly at age 71. He did not have a Will or any information about his assets. His niece, Ann, is trying to locate John’s assets and prepare his estate for probate. She’s overwhelmed. John owned stock options with a company in Hawaii and assets in the UK. He might have more. He has a brother, whereabouts unknown, who might inherit the entire estate.
If you die without a Will, blood relatives normally inherit everything. Ann has to hire an investigator to locate John’s assets, his brother and other relatives. She has to send notice of John’s death to these relatives. She’ll need at least two attorneys, one in Hawaii and one in the UK. Ann is very busy with a career and family. “I loved John very much, but I sure wish he had left a Will, and some information about his assets, before he died.”
How Many Wills Do I Need?
Follow the Assets
You must have a Will for each country, or USA state, where you own assets. Only a local Court where the assets are located can dispose of the assets. Ex-Pats in Spain normally need two Wills.
We have an USA Attorney, licensed in California, and associate with a Spanish-licensed Attorney, and attorneys in other countries, to draft your Will(s) compliant with the law of the country where you own assets.
Ex-Patriates Living in Spain
If you own property in Spain, from real estate to a bank account, it must be in your Spanish Will. Only a Spanish Court can dispose of these assets and they prefer a Spanish Will. Foreign Wills must be ‘authenticated’; an expensive ordeal for your heirs.
If you own assets in the USA you must have a Will for the state where the assets are located. Only a state court can dispose of these assets – and most do not accept a foreign Will. It’s the same for each country where you own assets – it’s best to have a local Will.
These Heirs inherit as a matter of law; your Will has no effect. In most of Spain, your spouse receives one-half of all the property you acquired during the marriage. And your children receive 25% of your share of the ‘family residence’.
A USA Ex-Pat Advantage Case
Americans in Spain can ask the Spanish Notary to apply the law of their home state when disposing of their Spanish assets. Most US states have ‘free disposition’, so you can give your assets to whoever you want. USA citizen Sam lives in Barcelona and wants to take advantage of this.
Taxes for Your Heirs
In Spain, heirs must pay an ‘inheritance tax’. Sometimes the tax is higher than the value of the assets they inherit. When this happens, the heir must refuse the inheritance and opt out of the will. You can draft your Will, and do things now, to avoid this.
Sam is from California where he owns a vineyard. He also owns a flat in Barcelona where he lives with his wife. They have two adult children, Jordi and Gemma. Sam wants to give his California vineyard to Jordi, his Barcelona flat to Gemma.
Spanish Will. This Will must only include assets in Spain. In the Will Sam directs that the law of California apply. California has no compelled heirs so the Barcelona flat passes to Gemma just as the Will directs.
Spanish Will – Catalan Law. If Sam fails to direct California law, then Catalan law applies and Sam’s wife and children are ‘compelled heirs’. As such Sam’s wife receives 50% of Sam’s Barcelona flat and his children 25%. Sam can give the remaining 25% to whoever he wants.
California Will. Sam must have a Californai Will for his California assets. Under California law, there are no compelled heirs so the vineyard passes to Jordi just as the Will says. The flat in Spain is not affected.
With two sets of law, Ex-Pats have a big advantage. Knowing how they apply, and the tax consequences, can be confusing.
Spain’s inheritance tax is based on:
1) The value of the assets the Heir inherits and
2) the value of the Decedent’s world-wide assets.
The tax is doubled for an Heir who is a non-Spanish resident. (This is someone who does not file an income tax return in Spain).
The tax on a non-resident Heir can be so excessive that they have to opt out of the Will. Being aware of this tax, and the value of your assets, is very helpful in drafting your Will in a fair manner. You might be able to reduce your Heir’s tax burden so they can accept your gift(s).
Frequently Asked Questions (FAQ’s)
If your spouse sells the flat, your children will receive 12.5% of the sale’s proceeds. (12.5% equals 25% of your 50% share).
There is a way to eliminate these ‘compelled heirs’: If your home country allows for ‘free disposition’ of assets, you can direct that this law apply to your Will. Then you can give your entire flat solely to your spouse. Free disposition is the law in most USA states.
Ready to Draft Your Final Will?
It’s something we don’t like to think about, but it is important. Do your Heirs a huge favor by leaving them a valid Will(s) and a list of your assets; especially if more than one country is involved. They’ll be very grateful. Thanks again for visiting our site.