Viva Espana

Increasingly, clients have assets in a variety of jurisdictions all over the world. This article will seek to guide practitioners whose clients own assets in Spain by identifying the principal reasons for a British national making a Spanish will, as well as explaining the procedure to be followed. I will identify some of the notable differences between Spanish and English wills and highlight the most important provisions to be included in a Spanish will in order to ensure that the intentions of the testator are given full effect.

Relative ease

The most compelling reason to make a Spanish will is the relative ease with which your estate in Spain will be administered upon your death. In all other respects an English will has equal effect, although, if one has the opportunity to choose, a Spanish will must always be made whenever one has assets in Spain.

If your English will is drafted in a straightforward manner and either the executors, or the beneficiaries of the assets in Spain, are fortunate enough to engage a lawyer specialising in Spanish succession law with cross-border elements, any complex issues arising will be dealt with as a matter of course.

However, as is often the case, either the will was drafted in such a way that only an English lawyer specialising in will trusts can determine its effect, or the matter lands in the hands of a Spanish lawyer who, while having the best intentions, has never dealt with a similar cross-border matter and for whom the case may be a steep learning curve. This can lead to unnecessary cost and delay.

Unlike in England, wills made in Spain must almost always be signed before a notary who will ensure that the document complies with all legal requirements. (Spanish law provides that the elderly may make holographic wills in their native language, but it is submitted that the use of such wills is to be avoided unless there is no alternative.)

Once the will has been signed, the notary sends information relating to the identity of the testator and the place at and date on which he made a will to a centralised registry of wills at the Spanish Ministry of Justice. The will signed by the testator does not leave the notary’s office, but is bound into a volume of documents signed before that notary and, in due course, when the notary retires, dies, or leaves the municipality, is passed to another notary in the same municipality for safekeeping.

The helpful result is that upon the death of the testator a certified copy of the will can be obtained from the relevant notary’s office (by presenting a death certificate and evidence of standing in the matter), a document that can then be used by the beneficiaries to administer the estate.

Indeed, whether or not a Spanish will has been made, it is a strict requirement of Spanish law that a certificate of last will be obtained from the centralised registry of wills that indicates if and where the testator made a will in Spain.

Prior experience

In the event of an intestacy, or if an English will is the last testamentary disposition in relation to the estate in Spain, the Spanish authorities will have to be satisfied as to who has the right to administer the estate. In certain instances an application may need to be made to the Spanish court in order to proceed, but usually matters can be handled before a Spanish notary.

One is then reliant upon the expertise and prior experience of the judge or the notary in relation to such cross-border matters. It can be particularly difficult to explain the effect of a discretionary trust, for instance. In any event, any documents issued outside of Spain will need to have the Hague Apostille (or equivalent) attached to it to authenticate it as a genuine document. In addition that documentation will need to be translated.

When presented with an English will in relation to Spanish assets, a common error made by lawyers lacking the necessary experience is to treat each executor in the same way as he/she would be treated in England, so that the entire Spanish estate vests in the executors. Where all of the beneficiaries are executors, this will have no fiscal impact.

If the beneficiaries are either a spouse, parents, children, or limited companies such as many charities, and the executors do not form part of that class of people, inheritance tax will be paid at a far higher rate. It can be more effective for the final beneficiaries of the Spanish assets to inherit directly, with the agreement of the executors.

This is permitted by the rules, and avoids reference to the executors from a fiscal perspective, thus minimising the inheritance tax liability. An error relating to inheritance tax may be difficult or impossible to correct, but in order to avoid such errors altogether the best advice is to make a Spanish will that dovetails with any other will that the testator may make in relation to the rest of the estate.

Upper limit

Whatever the content of other wills, it is most sensible to ensure that the Spanish will is limited expressly to assets situated in Spain. Further, it is possible to appoint someone as administrator of the will (albacea) who can administer the Spanish estate. Unlike executors, the estate does not vest in an administrator of a Spanish will, although the administrator may be a legal or other professional, expressly authorised in the will to charge for his work.

Probably the most frequently asked question relating to Spanish succession is whether forced heirship rules will apply. The simple answer is that Spanish law provides for the testator’s national law to apply, that being the law of the country of which the testator was a national as at the date of his death. So a British national from England will have freedom of testamentary disposition according to English law.

In a previous article (https://www.privateclientadviser.co.uk/feature/international/place-sun-0) I considered in detail the effect on this rule of the British testator becoming resident in Spain, or owning assets only in Spain, both of which may result in Spanish forced heirship rules applying to his estate in Spain. Subject to that, the most effective way to ensure that English law applies to an estate is for the testator to make a Spanish will in relation to his Spanish assets, specifying that he wishes English law to apply to his estate in Spain.

Spanish nationals do not use lawyers to draft their wills. They simply attend at the notary’s office and set out what they want to happen to their assets when they die. This is not a sensible route for the non-Spanish national, whether resident in Spain or otherwise.

While the notary will consider his knowledge of Spanish private international law to be sufficient for the purpose, he may not have a correct understanding of all the issues relevant to the testator before him. It is important to note that one is never a client of a notary, as a notary’s function is public. It follows that specialist advice should always be sought. A Spanish will may be drafted by an independent adviser and then signed before a notary public during the testator’s next visit to Spain.

Jonathan Eshkeri is a director at Eshkeri & Grau Solicitors