Owning a property in Spain, living abroad or having family members and assets located in different countries is increasingly common in today´s international world. An international lifestyle offers many opportunities, but when someone passes away, it can also raise additional legal and practical questions.

What happens if someone dies while living in Spain but holds another nationality? Which country’s inheritance law applies? What happens to a property in Spain? Is a will made abroad valid in Spain? And where do the heirs have to pay inheritance tax?

At OTIS Legal Group, we regularly assist with estates involving Spain and one or more other countries. In this guide, we explain the most important aspects of dealing with an international estate in Spain.

An inheritance is about more than paperwork

Dealing with an estate is rarely just a legal matter

A parent, partner or other family member may have just passed away. At the same time, there are suddenly many practical matters that need to be taken care of. Where to start? Obtaining documents, contacting banks and public authorities, dealing with a property in Spain, taxes, notaries – and perhaps doing all of this in a language and legal system you are unfamiliar with.

It can be a lot to deal with.

At OTIS, we therefore believe it is important to look not only at what needs to be done legally, but also at the people behind an estate. We explain what is happening, which steps need to be taken and what you can expect from us. Where possible, we take care of the formalities in Spain on your behalf.

Sometimes an estate is legally complex. In other cases, the legal situation may be relatively straightforward, but family circumstances make matters more complicated. Heirs may have different interests, emotions can play a role and not everyone will necessarily have the same view on how the estate should be handled.

That is when having someone keep an overview can make all the difference.

Personal guidance. Clear legal expertise.

When does inheritance become international?

An estate can become international quite easily.

For example, someone may be a foreign national living in Spain. A person living abroad may own a holiday home on the Costa del Sol, Mallorca or elsewhere in Spain. Family members may live in several different countries. Or the deceased may have owned property, bank accounts or other assets in different jurisdictions.

As soon as more than one country is involved, different legal systems, tax rules and authorities may come into play.

And that is where confusion can arise.

The country in which someone lives, the country of their nationality and the country in which their assets are located do not necessarily have to be the same.

Which inheritance law applies?

One of the first questions in an international estate is: which country’s inheritance law applies?

For estates falling within the scope of the EU Succession Regulation, the general rule is that the law of the country in which the deceased had their habitual residence at the time of death applies to the succession as a whole.

This means that a foreign national who has been living in Spain for many years may, in principle, find that Spanish inheritance law applies to their estate.

However, there may be a choice of law.

A person may choose the law of their nationality to govern their succession. For example, a British, German, Dutch or other foreign national living in Spain may choose the law of their nationality to apply to their estate.

This choice can have significant consequences for the distribution of the estate and for the rights of a spouse, partner, children and other heirs.

It is therefore essential not only to establish whether a will exists, but also to examine its contents and whether it contains a valid choice of law.

Living abroad but owning assets in Spain

You do not have to live in Spain to become involved with the Spanish legal system after a death.

Imagine that someone lives outside Spain but owns an apartment or holiday home in Spain. Upon their death, the Spanish property becomes part of their estate.

That does not automatically mean that Spanish inheritance law applies to the entire estate.

However, the Spanish property will have to be dealt with in Spain and, ultimately, registered in the name of the heirs.

This involves dealing with Spanish formalities, documentation requirements, tax obligations, a Spanish notary and the Land Registry (Registro de la Propiedad).

An international estate therefore often involves two different aspects: determining who is legally entitled to inherit and dealing with the practical transfer of assets located in Spain.

What if you live in Spain?

If you move permanently to Spain, it is advisable to review your inheritance and estate planning arrangements.

Moving to another country can affect which law will eventually apply to your estate.

A will that was drawn up years ago in your home country does not suddenly become irrelevant simply because you move to Spain. However, it is important to check whether it still works as intended in light of your new country of residence, family circumstances and assets.

A change of country can otherwise have consequences that were never intended when the will was originally prepared.

Inheriting a property in Spain

One of the situations we encounter most frequently is the inheritance of Spanish real estate.

A property often has both financial and emotional significance. It may have been the family holiday home for many years. Perhaps a parent lived there permanently. Or perhaps several siblings inherit the property together and suddenly have to decide: do we keep it, sell it or does one of us take over the others’ shares?

At the same time, there are a number of practical and legal steps that need to be taken.

First, it must be established who the heirs are and on what legal basis they inherit. The Spanish part of the estate must then be dealt with. Depending on the circumstances, documents may include the will, death certificate, certificates relating to the last will, documents establishing the identity of the heirs, Spanish identification numbers (NIE) and other foreign or Spanish documents.

It must also be determined which taxes are due, after which the new ownership situation can be registered correctly.

At OTIS, we try to make this process as clear as possible. What documents do we need? What can we arrange for you? What do you need to do yourself? And what is the next step?

No unnecessary legal jargon: just clarity about what needs to happen.

Do you need a Spanish will?

That is a question we hear regularly:

“I own a property in Spain. Do I also need a Spanish will?”

Not necessarily.

A will made in another country may also be valid and relevant in relation to assets located in Spain. Owning property in Spain therefore does not automatically mean that you need a separate Spanish will.

However, in certain circumstances, having a Spanish will can make the administration of the Spanish estate easier or may be advisable as part of your wider estate planning.

The important point is that different wills must work together.

Drawing up a Spanish will without properly coordinating it with an existing foreign will can create significant legal complications. You want to avoid a new will unintentionally revoking previous arrangements or creating uncertainty about which provisions apply to which assets.

Any Spanish will should therefore be considered as part of your overall international estate planning.

Choice of law: a few words with major consequences

When people think about estate planning, they often focus on one question: who gets what?

But in an international situation, another question can be just as important:

“Which law determines who get´s what?

Under the EU Succession Regulation, a person may choose the law of the country whose nationality they possess to govern their succession as a whole. This can also be the law of a non-EU country.

Without a valid choice of law, the law of the deceased’s habitual residence will generally apply, subject to the specific circumstances of the case.

For someone who has moved to Spain, this distinction can have significant consequences for the position of a surviving spouse or partner, children and other family members.

A choice of law is therefore much more than an administrative clause hidden somewhere in a will. It can be a fundamental part of international estate planning.

Who are the heirs?

Who inherits depends on the applicable inheritance law and whether the deceased left a valid will.

If there is no will, the applicable rules of intestate succession determine who the heirs are.

And this is precisely where differences between countries can become important.

The rights of spouses, unmarried partners, children and other relatives are not regulated in the same way everywhere.

Spain adds another layer of complexity because different parts of Spain have their own civil and inheritance law systems. Depending on the circumstances, the rules applicable in Catalonia, for example, may differ from those applicable under the Spanish Civil Code.

It is therefore important not to assume that the inheritance rules you know from your home country will also apply in Spain.

Accepting or rejecting an inheritance

Being an heir does not necessarily mean that you have to accept an estate without further consideration.

An estate may include not only assets, but also debts and other liabilities.

Depending on the applicable law and the circumstances, an heir may have different options, including accepting or rejecting the inheritance. In some situations, mechanisms may be available to limit an heir’s liability for estate debts.

Before making a decision, it is therefore important to obtain as complete a picture as possible of both the deceased’s assets and liabilities.

With an international estate, this can be more complicated than expected.

There may be a bank account in one country, a house in Spain, investments elsewhere and outstanding loans or tax obligations in yet another jurisdiction.

The first step is often to establish the full extent of the estate´s assets and liabilities.

How is an inheritance dealt with in Spain?

The exact procedure depends on the circumstances of each estate, but it generally starts with gathering the necessary documentation and establishing who the heirs are.

The assets and liabilities must then be identified and the distribution of the estate determined.

If the estate includes Spanish real estate, the transfer of ownership will ultimately need to be recorded in the Spanish Land Registry.

Tax obligations also play an important role.

In an international estate, coordination is essential. The Spanish part of the inheritance cannot always be considered in isolation from what is happening in other countries.

This is why we regularly coordinate with foreign lawyers, notaries, tax advisers and other professionals when dealing with international estates.

Inheritance tax in Spain

Apart from the legal question of who inherits, there is another obvious question:

How much tax will have to be paid?

Spain has an inheritance and gift tax known as the Impuesto sobre Sucesiones y Donaciones.

Whether Spanish inheritance tax is due – and how much – depends on several factors. These can include the residence of the deceased and the heir, the nature and value of the assets, the relationship between the deceased and the heir and the Spanish autonomous region whose tax rules are applicable.

That final point can make a significant difference.

Inheritance tax differs between Spanish regions

If you search online for information about Spanish inheritance tax, you may come across very different percentages and examples.

There is a reason for that.

Spain’s autonomous regions have significant powers in relation to inheritance tax and often provide their own allowances, reductions and tax benefits.

As a result, the final tax burden can differ substantially depending on the circumstances and the region concerned. An inheritance involving a property in Andalusia may therefore have a very different tax outcome from a seemingly similar estate involving Catalonia.

For this reason, quoting one general percentage for “Spanish inheritance tax” is rarely useful.

The individual situation needs to be assessed.

Can inheritance tax be payable in more than one country?

Yes. In an international estate, more than one country may have the right to levy inheritance or estate taxes.

That does not necessarily mean that the same assets will ultimately be taxed twice in full.

Depending on the countries involved and the specific circumstances, relief mechanisms may be available to prevent or reduce double taxation.

It is important, however, to distinguish between inheritance law and inheritance tax law.

The fact that the inheritance law of one country governs the succession does not automatically mean that only that country may levy tax

These are two separate questions and should be analysed separately.

Common problems in cross-border estates

In practice, problems are often not caused by one major legal issue, but by several smaller issues occurring at the same time.

An old will that was never reviewed after moving abroad. A Spanish property that is still registered in the name of a parent who passed away years ago. Heirs living in several different countries. A foreign document that cannot immediately be used before a Spanish notary. Uncertainty about the value of Spanish property. Or heirs who only discover later that a Spanish tax return should have been filed..

Most of these situations can be resolved.

But as a general rule, the sooner the international situation is identified and analysed, the easier it is to manage the estate efficiently.

Can you prevent problems in advance?

In many cases, yes.

If you own assets in more than one country, live in Spain or own property here, it is sensible to review your will and estate planning from time to time.

Questions worth considering include:

· Where am I currently habitually resident?· Which country’s law would apply to my estate if I died today?· Have I made a choice of law in my will?· Do I have wills in more than one country and, if so, do they work together?· Where are my main assets located?· Have my family circumstances changed?· Would my heirs know where to find the relevant documents?

International estate planning does not necessarily have to be complicated. But it should be coordinated.

Frequently asked questions about inheritance in Spain

Does Spanish inheritance law automatically apply if I live in Spain?

Not necessarily, but it may. Under the EU Succession Regulation, the general rule is that the law of the country where the deceased had their habitual residence at the time of death applies. However, the deceased may have made a valid choice for the law of their nationality.

Is my foreign will valid in Spain?

A foreign will can be recognised and used in Spain, provided the relevant legal requirements are met. The fact that a will was made outside Spain does not in itself mean that it is invalid in Spain.

Do I need a Spanish will if I own property in Spain?

Not necessarily. A foreign will may also cover Spanish assets. However, in some cases a Spanish will can make the administration of Spanish assets easier. It is important that any Spanish and foreign wills are carefully coordinated.

Can I choose my national law if I live in Spain?

Under the EU Succession Regulation, you can generally choose the law of the country whose nationality you possess to govern your succession. If you have more than one nationality, specific rules apply.

I am British and live in Spain. Can I choose English law

A British national living in Spain can generally choose the law applicable in the legal jurisdiction forming part of their nationality, such as the law of England and Wales, under the EU Succession Regulation. However, the United Kingdom does not participate in the Regulation and the position should be assessed carefully, particularly because the UK itself contains different legal jurisdictions.

Do I have to pay Spanish inheritance tax if I inherit a Spanish property?

Spanish inheritance tax may be due when inheriting property or other assets connected with Spain. The amount depends on the individual circumstances, including the value of the assets, the relationship between the heir and the deceased and the applicable regional tax rules.

Can I deal with a Spanish inheritance without travelling to Spain?

Often, yes. Many steps can be handled through a lawyer in Spain, and powers of attorney can frequently be used so that heirs do not have to travel to Spain for every part of the procedure.

How can OTIS help with an international inheritance in Spain?

You may live in Spain, inherit a property here or be dealing with an estate involving several different countries. We can guide you through the Spanish legal and practical aspects of the process and coordinate with professionals in other jurisdictions where necessary.

Depending on the circumstances, we can assist with matters such as:

· analysing the will and determining the applicable inheritance law;
· establishing which documents are required in Spain;
· coordinating foreign documentation for use before a Spanish notary;
· applying for Spanish NIE numbers for heirs where necessary;
· preparing and coordinating the Spanish acceptance and distribution of the inheritance;
· dealing with Spanish inheritance tax formalities;
· transferring Spanish property into the heirs’ names;
· coordinating with banks, notaries and public authorities in Spain;
· reviewing existing wills and international estate planning.

Dealing with an inheritance in Spain?

An international inheritance can involve different countries, different legal systems and different tax rules. That does not mean the process has to become unnecessarily complicated.

Our aim is simple: to give you a clear overview of what needs to happen and guide you through the Spanish process from start to finish.

The key is to determine at an early stage which law applies, who the heirs are, which assets are located in Spain and which legal and tax steps need to be taken here.

At OTIS Legal Group, we assist international clients with the Spanish side of cross-border estates and inheritance planning.

Personal guidance. Clear legal expertise.

If you are dealing with an inheritance involving Spain, or would like to review your international estate planning, our lawyers are happy to assist you. Contact OTIS Legal Group for tailored advice on cross-border estates, Spanish inheritance law and succession planning.