| Hundreds of thousands of foreign citizens have assets in Spain. Many of them are elderly and should for that reason arrange their affairs so as to make life easier for their heirs and the change of ownership of the Spanish assets less costly. As inheritance laws are different in the various countries, you should not rely on information from your neighbour from another country, who will explain the law to you as he knows it from his country. Also there are certain differences, even contradictions, between foreign and Spanish laws on inheritance that must be taken into account. We like to point to the changes in the regional legislation on Inheritance, where some of the governments have introduced changes in the deductions for close relatives that in certain cases mean a suppression of inheritance taxes. {mosimage}
Most lawyers outside Spain do not know Spanish inheritance laws and most Spanish lawyers have no knowledge of foreign law on the subject. If you have a complicated family situation we would recommend that you see a lawyer conversant with both the law of your country and Spanish law. If your case is simple and straightforward, you may feel able to take the necessary steps after having carefully read this information. However, you should be aware that this is a general guide only and cannot replace professional advice on the specific circumstances of your case. Without a will
If a deceased person has assets without leaving a will, his assets will be distributed in accordance with the law. But if the person is a foreigner and some of the assets are situated in Spain, the question arises: In accordance with which law, the Spanish or the one of his home country? The answer to this question depends on the nationality. Spanish law says that the assets of a foreign citizen should be distributed according to the inheritance laws of his home country. For instance Swedish inheritance law agrees with this and states that the inheritance of a Swedish citizen should be done after Swedish law, even if that Swede was living abroad and the assets are situated there. Norwegian inheritance law has another position, and rules that the distribution of assets of a Norwegian living abroad should be done in accordance with the laws of the country he was living in. And English law says that the distribution of real estate located abroad must be done according to the law of the country where the property is situated. So for the citizens of some countries we have diverging rules for the assets in Spain. Spanish legislation contemplates this situation, technically called "conflict of laws" in articles 9-12.2 of its Civil Code. It states that the law applicable to foreign inheritances is the national law of the deceased. As far as the English legislator is concerned, the law of the domicile for movables and the law of the place where they are situated for inmovables (ley de situs) apply. Domicile can depend on two factors: origin and choice. For the last factor two conditions are required: residence and intention. You may have become domiciled in Spain by taking a residence permit there, but if you have in any way stated your intention to eventually go back to the UK, English courts may consider that you are still domiciled in your home country. Domicile is a very complex subject and in case of doubt a professional opinion should be obtained. And for a Norwegian the situation becomes the following: If he has left Norway and take residency in Spain, his assets should be distributed in accordance with Spanish inheritance laws. But if he is a non-resident owner in Spain, his Spanish property will be distributed in accordance with Norwegian law, even if inheritance taxes for immovable assets must be paid to the country where the asset is situated. Complicated family situations
If a foreigner with assets in Spain has a complex family situation, maybe with children from several marriages or outside marriage, or where the relations between the possible heirs are bad, he should study well what will or could happen when he dies. He should buy our Info-File on Inheritance, and maybe also consult a lawyer. But for a normal foreign family with a property in Spain, where the assets will pass to spouse and children, the situation is not complicated, even if it calls for answers to some questions:
a) Is it obligatory to make a will? No, it is not obligatory. If a foreigner with assets in Spain dies without a will, his assets will be distributed in accordance with Spanish law or the law of his home country, depending on the legal situation we mentioned earlier.
b) Will a will made abroad be accepted in Spain? A will which is valid under the law of your home country will generally be taken to be formally valid in Spain. But if it written in another language than Spanish, the Spanish notary will demand an authorised translation. c) Is it better to make a will in Spain? In almost all cases it is an advantage to make a Spanish will for your assets in Spain. However, a will does not change the criteria of the law when it comes to distribution of assets. But a Spanish will for your assets in Spain in accordance with the inheritance laws of your home country is in most cases accepted by a Spanish notary making the new escritura. But if one of the heirs challenges the legality of the will, the matter will be looked into in more detail. Arguments for a Spanish will The reasons why we in all cases of a normal inheritance recommends a will in Spain, are the following:
* If your inheritance in Spain is done over a will made abroad, or decided by an inheritance court abroad in absence of a will, the heirs must prepare an authorised translation and also have an "apostille" (an official stamp verifying the signature of the judge) on the original document. This means additional work, costs and time. * The time limit for making an inheritance tax declaration in Spain is 6 months from the death. If you are waiting for the probate from the home country to be issued, and then have to make the translation and get the "apostille" before taking it to Spain, you may easily overrun this time limit and be in for fines.
* With a will in Spain you can to a certain degree regulate the distribution of the assets. For instance you can make sure that your spouse will have the undivided users right for life, or that only one of the children is taking over the house in Spain, the others having been compensated by assets in the home country.
* You can also make an inheritance tax saving by making the right kind of will in Spain. We shall go into the details of this in a later chapter.
The different types of will 
There exist a number of different ways to make a will in Spain. Here are the main forms: "Testamento ológrafo" is a hand-written will, completely written and signed by the testator in such a way that there can be no doubt about its authenticity. It must also contain a date of signature.
This will is a private document which is transformed to a public document after the death of the issuer. It can be kept safe or given in a sealed envelope to a person of confidence. It needs no witnesses, nor a notarial confirmation.
This form of will ensures complete confidentiality. On the other hand it may easily be forgotten or lost . Only for very valid reasons should this form of will be chosen.
"Testamento cerrado" (closed will) is also confidential, where the issuer writes it down without any person knowing its content, and thereupon placing it in a closed envelope. He may also seal the envelope and then he takes it to a notary, or the envelope is sealed in front of the notary. The notary and 5 witnesses confirm the act by signing the envelope.
The issuer of the will may keep the sealed envelope himself, give it to a person of confidence for safe-keeping or deposit it with the notary.
"Testamento abierto" (open will) is the most used form, where you tell the notary what the contents of the will shall be, or let a lawyer make it. The notary then gives it the official form and signs it together with the issuer. A report on the will is then sent to the "Registro de las Ultimas Voluntades" in Madrid. When the issuer of the will dies and before the adjudication can be made, a search must be made in the registry in Madrid to find out if a will has been registered or not. Even if no will has been registered, written confirmation from the registry in Madrid is obligatory.
According to law number 30 of 20th of December 1991 it is only mandatory to have 2 witnesses to the signing of such a will if the issuer or the notary asks for it, or if the testator cannot read what is written, if he himself cannot write or if he is mute. If the testator can express his will in Spanish or another language that the notary understands or can have translated on the spot, or if testator can understand what is written or have it translated, then witnesses are not necessary. But if the testator cannot express his will in a language the notary understands, it is necessary to use a translator to be chosen by the testator. The will must then be written in two languages and it must be made clear in the will that the testator understands the second language. The Spanish inheritance rules 
Again we repeat what we wrote at the beginning of this information, that Spanish inheritance rules will be applied only in exceptional cases. If you have a normal family situation and make a will for the inheritance in Spain, they will not be used.
The "legítimas", persons with legal rights in an inheritance in Spain are the children, grandchildren, spouse, parents and grandparents of the deceased. But not all of them have such a right in all cases; some of them are only subsidiary heirs.
Children (and their descendants) have a legal right that represents 2/3 of the inheritance. Half of this (i.e. one third) is unchangeable - "legítima absoluta" - while the testator in his will may distribute the other third - "tercio de mejora" - according to his wishes, but only among the children and their descendants, not anyone else.
Parents have a legal right if the testator has no children or grandchildren. If the testator is not married, the parents have a right to 1/2 of the inheritance. If there is a spouse, the obligatory part of the parents is only 1/3. If the parents are dead, the grandparents take over the rights. A spouse has in principle only the "life interest" as a legal right. If children exist, the spouse has only the life interest to a 1/3 part, called "tercio de mejora". If there are no children or grandchildren, but parents, the spouse has the life interest of 2/3 of the inheritance What is left of the inheritance after the distribution of the obligatory parts, the testator can freely dispose of in his will. If there is no will, the court decides the distribution of what is left after the obligatory parts.
Children outside wedlock, from previous marriages or adopted children have the same rights as children of an existing marriage. But the children from the surviving spouse's previous marriage have no inheritance rights. If a child with an obligatory part is dead, his children have the right to take over.
A spouse from a previous marriage, where a definite divorce is completed, has no obligatory part in the inheritance. Common law spouses have no inheritance rights under Spanish law. After the children and grandchildren (first place), parents and grandparents (second place), and spouses (third place), in fourth place come the sisters, brothers, nephews, nieces and thereafter (fifth place) other relatives. Last in the queue is the Spanish state. Regional variations on Inheritance taxes
As our members will know, the Inheritance Tax is one of the taxes that the national government has given over to the regions. Since there are 15 regions in Spain, and they all want to be different from the rest, we are approaching a situation where a citizen is unable to find out what are the correct taxes and deductions in the various parts of the country. Moreover, changes are made in the budget for the regions from year to year, to complicate the picture even more. Some of the biggest rating companies in the world, like Moodys and Standard & Poors have warned Spain that this situation may keep foreign investors away.
No great changes in tax rates
There are not many or great variations in the tax rates, going from between 7 and 8% on the smallest inheritance, to 33 and 34% on the highest. You will find the general rates from 2004 on our web-page www.spain.c-euro.org under Members Only and Info-File on Inheritance. The regional differences existing in the rates are insignificant and will not have any serious impact on the tax payment.
Nor are there any great differences when it comes to the multiplication for the pre-existing wealth of the heir. You can use the table in our Info-File and will not be far from the truth, whichever region you have a property in.
Detective work
But when it comes to deductions and exemptions, we have had to perform almost a detective work. The taxes are dealt with by the regional governments in their budgets, normally approved at the end of each year for the coming year (it happens that the approval of the budgets is delayed well into next year). But tax changes can also come in accompanying laws to the budget. In some years there are no changes in the inheritance taxes, in others yes. But they may be hidden in a text mainly dealing with the income tax, under such words as "y restantes tributes cedidos" (Valencia region), meaning "other taxes ceded". On the web-page for the Catalan government, they are trying their best to avoid giving information in any other language than Catalan, one must be very insistent to get the text in Castellano. For the Balearics we could not find any information in Castellano, only in Mallorquin (or is it Catalan as well?).
For this reason, we recommend to consult a lawyer or fiscal advisor in the area where yo have your property what are the currect deductions in your area, to see if this warrant any changes in your will. But be aware that new changes may come without much warning or information in any of Spains 16 regions! We sent in the beginning of 2007 e-mails to all tourist regions asking them for any recent changes in the inheritance rules. None of them have answered!
Deductions and exemptions
At least seven of the regions (Madrid, La Rioja, Valencia, Murcia, the Balearic islands, the Valencia region Castilla – Leon and Aragon) have introduced reductions in the tax base for inheritances between close relatives (inheritance classes I and II) that goes from 95 to 99%. Other regions (Castilla – La Mancha, Asturias, Galicia and Cantabria) has limited the reductions to heirs of less than 21 years (inheritance class I), or to a certain maximum amount. Andalucia has an exemption on the inheritance of a permanent dwelling of 99,99%, and a reduction of up to 125.000 Euro for inheritance in class I and II (close relations).
Since this information is very short and summarily, and since the situation and its interpretations are continuously changing, we recommend anyone affected by any of the regional variations, to contact a lawyer from the region, to verify the impact of regional legislation.
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