Please note that the information provided in this article is of a general interest nature and intended as a basic outline only. You are well advised to contact a professional for advice specific to your circumstances. Nothing contained in this article should be seen or taken as the writer or publisher providing legal or financial advice.
Published statistics reveal that more than 50% of the UK adult population have either not made valid wills or have failed to update their wills over time, such that their wills no longer reflect their testamentary wishes.
The position in respect of non-Spanish owners of Spanish properties is perhaps even more alarming. Although many such individuals routinely make wills in Spain, for example when they purchase properties, these wills are often prepared without regard to the pitfalls which are open to foreigners with properties and other assets in Spain.
Some examples of particular problem areas which frequently arise and which therefore require special consideration are:
It is essential in making wills when there are assets both in Spain and elsewhere, to ensure that there are no inconsistencies or conflicts in the use of language. The consequences of a poor translation, for example, can be disastrous, as the complete sense of the document can be lost.
A particular danger of multiple wills (i.e.individual wills of your Spanish assets and your other assets respectively) can be that, through mutual incompatibility, the wills can be accidentally
invalidated. This means that your actual wishes could be completely overridden and this can lead to quite unexpected (and often inconvenient) results in the distribution of assets, following a bereavement.
The legal systems of many countries (including the UK) permit individuals, within reason, to leave their assets to whom they choose. This is not the case in Spain, where the Spanish Civil Code imposes an obligation for assets to be left to specific family members in pre-determined proportions, according to family circumstances. However, correctly worded wills enable foreigners to enjoy the freedom of choice of their own Country's legal system, which can often be beneficial in estate planning.
The days when foreigners could simply "forget" their Spanish properties for the purposes of their taxation liability in their own countries, are over. Communication between the Spanish tax authorities and those of other countries is now closer than ever before. For those prepared to run the risk of the consequences of tax evasion, or those who choose not to consider it, this is extremely worrying. The only real option now is to recognise that owning a foreign property does create taxation issues and provided that correct professional advice is obtained, the position can be managed, so as not to be onerous. In terms of inheritance/ succession tax planning, it is essential to have a clear understanding of the taxation
liability. In many cases, estates can be structured quite legitimately, to reduce taxation liability.
As in many other countries, there are minimal controls in Spain regarding the qualification and training of those engaged in the preparation and provision of wills and estate documentation. As a will is possibly the most important document you will enter into in your lifetime, (at least, in terms of protecting your family's wealth and future security), it is essential that only the best quality advice and documentation is obtained. Failing to take professional advice can result in mistakes which, in the long run, can prove to be extremely costly and upsetting for families
and loved ones.
Because multi-jurisdictional estate planning is a complex area of professional practice, the fees for advice in this area can be prohibitively expensive. However, in many cases, it is not necessary to spend so much. The use of expert advisers in this area of legal practice,
who specialise only in this type of work, can enable the correct documentation to be expertly and professionally provided, but at a surprisingly affordable cost.
Preparation for a straightforward probate
The very last thing anyone would wish for in making a will, is to leave their family and loved
ones behind, with a complex, time consuming and costly probate process. It is therefore essential that all will documentation is designed appropriately to path the way for the most convenient, efficient and straightforward probate process possible in the circumstances. This means avoiding confusion over taxation liability; conflicts in language; and the dangers of inconsistency and mutual incompatibility of wills.
In conclusion, it is essential when making wills which cover assets in two (or possibly more) countries, that expert advice is obtained from a professional adviser, with the requisite experience and qualification fully to understand how the legal and fiscal systems of each jurisdiction operate together. It can be extremely dangerous and costly to execute a will, or to
deal with estate planning in one country without considering the position in the other.