If you own assets in Spain, they must be in your Spanish will.
Why. Only a judge in Spain can only dispose of your assets located in Spain; a judge in your home country can’t do this. If you submit your ‘home-country’ will in Spain, it must be ‘authenticated’ before it can be used. A long, expensive process.
Will Contents. Only include assets located in Spain in your Spanish will; no need to list non-Spanish assets. The will from your home country, and any country where you own property, should likewise only include assets located in the country. Each will must comply with local law so you’ll need a lawyer in each country to prepare the will.
Ex-pat Advantage. You may direct the Spanish judge to apply the ‘disposition laws’ of your citizenship country, instead of Spanish law, when transferring your Spanish assets to your heirs. Why is this important?:
Spanish Law. Catalunya, and most of Spain, have ‘compulsory heirs’ who inherit certain assets no matter what. For example, if you own a flat in Barcelona where you live with your family, upon your death, your spouse will receive 50% of the flat and your children, regardless of age, receive 25%. It doesn’t matter what your will says; it transfers as a matter of law.
Your Country’s Law. Some countries, and most USA states, have ‘free disposition’ of assets. This means you can name any heir you want and the law compels no one. If this is the law in your country, you can tell the Spanish judge to apply it to your will.
An Illustration. USA citizen Sam is from California. He’s a resident of Spain and owns a flat in Barcelona where he lives with his Spanish wife Montse. They have two adult children, Jordi and Gemma. Sam wants to give his Barcelona flat to Gemma.
Spanish Will. Upon Sam’s request, the Spanish judge will apply California law and pass 100% ownership of the Barcelona flat to Gemma. The ‘compelled heirs’, Montse and Jordi, receive no ownership interest.
California Will. Sam has a house in California and wants to give it to his son Jordi. First, he must have a California will with this instruction included. The California judge will then transfer the house to Jordi. The Spanish judge is not involved.
Spanish Inheritance Tax. In Spain, a person who receives a gift in a will must pay a tax based on the gift’s value. The tax is a percentage and increases as the value of the gift(s) increase. If the person is a non-resident of Spain, the tax could be doubled.
Spanish Legal Assistance. Consult with a Spanish tax attorney (abogado fiscal) to help you prepare your will. There are things you can do now that will reduce the taxes your heirs have to pay.
Conclusion. Ex-Pats have some flexibility in disposing of their property in Spain, but knowing which and how the laws apply, and the taxes involved, require expert advice.
Questions. I’m a USA-licensed attorney from California and have lived in Spain since 2001. I work with a Spanish tax attorney. We draft wills for Spanish ex-pats from a variety of countries. I’d be happy to answer your questions. Mark Carr, [email protected]