UPDATED: 10th May 2021
For foreign residents in Tenerife such as English, Scottish and Irish, it is strongly advisable to prepare a separate Will for each country in which you hold assets. Hence, for those with assets in both Spain and their home country, it is recommended to have two separate Wills, each limited to one country’s assets.
The advantage in having separate Wills is that the executors/beneficiaries can begin taking independent steps in each country in respect of that country’s estate and the assets without having to wait for probate to be granted in the deceased’s home resident country.
There is also the potentially serious consequence that in Spain, it is difficult or even impossible to renew insurance or pay taxes and bills on the deceased’s assets until probate has been granted. Given that Inheritance Tax interest and penalties accrue on the estate from 6 months after the date of death, waiting for probate to be granted first in the UK or Ireland is simply not a valid option. Hence, the small additional cost of preparing a separate Will in each country is a ‘no-brainer’.
Many foreigners making a Will in Spain are not properly advised as to the law that will apply to their individual wills. Under Spanish law, if a foreigner makes a Spanish Will, then that foreigner’s national law should automatically be applied to his or her circumstances. Since 2015, a clause is routinely inserted into most Spanish Wills to expressly apply the law of the testator’s nationality. However, if no such clause has been inserted, or if no Spanish or home country Will is ever prepared (i.e. an intestacy), then the applicable national law will be the law of the country where the person died.
So whereas Spaniards are automatically required by law to leave their assets in fixed shares to direct family, this will not typically apply to a foreign national who makes a Will in Spain (unless of course their own country’s law also imposes any rules on compulsory beneficiaries). Laws differ in each country, so we recommend consulting a lawyer in your own jurisdiction if you are unsure of the rules that will apply in your own home country. However, for English & Welsh nationals, please see the further information below.
Problems can also arise where somebody makes a Spanish Will, but then subsequently makes a Will in his or her home country, which due to its careless wording, inadvertently cancels or revokes the Spanish Will. This is a surprisingly common scenario. In that instance, there may end up being no valid Will for the Spanish assets. In that case, when the testator dies, his or her Spanish estate must be administered using the default statutory Intestacy Rules. This can have very unexpected or undesirable consequences as to the division of assets.
Another potential pitfall that many clients are not advised about when making their Will(s) is that in Spain, leaving your estate to a large number of beneficiaries (especially to charities outside Spain) can be an administrative nightmare. It is usually recommended to only leave gifts to charities in the same country that the Will is made and that no more than 1 or 2 charities are specified.
In the UK, everything is dealt with by the executor(s), who pay the taxes and then administer the assets in the most expedient way possible. However, in Spain executors are rarely appointed and even when they are, they do not generally hold the same powers. In Spain, it is the beneficiaries who generally administer the estate and who each pay their own individual Inheritance Tax on what they receive under the Will.
Therefore, each beneficiary must apply for an NIE tax number and in most cases, will give a power of attorney to the lawyer or family member handling the probate process in Spain. Whilst close family members will appreciate the responsibility and will generally cooperate, the same cannot be said for non-related beneficiaries, e.g. UK/Irish charities, who will have complicated bureaucratic procedures to follow before accepting a foreign gift. Unless the gift is particularly large, very few foreign charities will be prepared to grant a power of attorney to a foreign lawyer and apply for a foreign tax number, that may result in potential unforseen tax liabilities on their behalf in the foreign jurisdiction.
A further unintended consequence of leaving somebody a gift in a Spanish Will is that legally, the beneficiary is required to pay Inheritance Tax on their gift before they actually get their hands on it. For a beneficiary with no substantial savings, that is obviously not a practical option. We have also seen examples of parents or grandparents wanting to leave a holiday home to their children, on the expectation that they can enjoy it for life, without anticipating that the property may have to be sold in order to pay substantial inheritance tax bill; thus defeating their initial intention.
It is therefore vital that anybody drafting a Spanish Will is well versed in the laws and procedures applicable for making a Will in the testator’s home country and can review any existing or proposed home-country Will to ensure that there are no clashes with the Spanish Will. Unfortunately, very few Spanish lawyers or Gestors have such knowledge or experience. Using dual qualified lawyers such as TENERIFE SOLICITORS is therefore strongly recommended.
TENERIFE SOLICITORS strongly advises clients making a Spanish Will to think about the effect of their proposed wishes as far as possible so as to take into account the availability of beneficiaries and their ability to deal with such administration or payment of tax. Gifting small amounts to a large number of non-Spanish charities or friends and relatives dotted all over the world is also strongly discouraged for the same reason. Unlike some law firms in Spain, TENERIFE SOLICITORS has considerable experience in preparing Wills for expats and they aim to ensure that clients fully consider and understand the practical effects of their proposed Will.
TENERIFE SOLICITORS charge a fixed fee of €240 plus 7% IGIC per Will, which includes all notary fees. A small discount is also available where 2 Wills are executed at the same time.
Best of all, as qualified and practising English Solicitors, they can also advise upon and prepare English Wills for use within England & Wales and ensure that the contents do not conflict with any Spanish Will already prepared, or envisaged for the future.
Clients can complete the firm’s Wills Questionnaire HERE, which can be submitted online. The firm will then contact you to discuss the contents and to arrange an appointment to advise you and sign the Will before the Notary in Tenerife.