Your Guide to Making a Spanish Will on Mallorca – What you need to know.
If you own a property or have assets here on Mallorca or on Mainland Spain, you are strongly advised to make a Spanish will. If you are not Spanish and have a will in your country of origin covering your Spanish assets, that too will be valid. However before that will can be affected in Spain, your executors must have that will officially translated, notarized, and validated by a Spanish court before it becomes valid and official in Spain. This is a very lengthy and time consuming process and can be result in fines and interest charges being levied against your Spanish Estate if you do not comply with strict 6 month time limit pertaining to Spanish Inheritance tax rules and payments. If your will in your country of origin does not specifically deal with the distribution of your Spanish assets, you will be deemed to have died intestate (without a will) in Spain.
To ensure the task of transferring your estate into the names of your chosen beneficiaries much quicker, you should always ensure that you have a Spanish will in place, to deal with your Spanish assets, which is officially notarized and registered in the Central Registry in Madrid (Registro de Actos de Ultima Voluntad).
If you do not make and register a will in Spain, then the worst case scenario would be that your property will pass to the Spanish Government.
When a Foreign person, who owns assets in Spain, dies without a Will (intestate) Spanish law will be applied to their Spanish assets. The law in Spain differs vastly from that in other countries such as the UK for example. In Spain, where a person dies intestate, Spanish rules of inheritance automatically apply leaving two thirds of your Spanish estate to your compulsory heirs.
If you do make a will in Spain you can leave your assets to whoever you please, so long as the laws in your home country prevent you from doing so. The Spanish Civil Code states that the Spanish assets of a foreign deceased person will be governed by the law of their own country.
If you have assets in your home country as well as in Spain – it is recommended that you also have a will prepared in that country covering those assets as well.
Finally you should ensure that there are no legal conflicts between your Spanish will and any will made in another country.
I am married so if my partner dies, I automatically receive their share right?
Wrong. Unlike some other countries where if you die without a will your share automatically goes to your spouse, in Spain that is not the case. Therefore just because you have bought a house together do not expect that house to go to your spouse on your death – if you have not made a will it will not. You will be deemed to own 50% of the property and that 50% will in the first instance be left to your descendant children. So if you or your partner have a child to a previous marriage that does not have a good relationship with you or your current spouse, this may present untold problems in the unfortunate event of the death of either of you.
I want my children to benefit from my death but I want my partner to live in the property?
You can make a will leaving your estate to your children but on the proviso that your spouse has the right to live in the property for the rest of their years or until the property is sold or if your spouse remarries.
What happens if I do not leave a will or die intestate?
If you do not leave a will or the will you have made in your home country does not give specific instructions as to your Spanish assets, you are deemed to have died intestate i.e. without a will. As such, the Spanish Law of Succession who inherits your Spanish assets in Spain applies. The line of succession applies in the order as follows:-
- All of your children (descendants) will inherit your assets in equal shares.
- If you have no descendants, then your spouse will inherit your assets.
- If you are not married, your brothers and/sisters in equal shares. If any of your brothers and/or sisters have predeceased you and have left children, then their children will inherit their parent’s share in equal shares.
- If you have no brothers or sisters, nieces or nephews, then any cousins you have will inherit your assets.
- If none of the above family members exist, then your estate is inherited by the Spanish Government.
The Types of Wills available
This is the most common form of will and is used by the majority of people in Spain. An ‘open will’ is made before a Notary, who retains the original will on file at their office. The Notary will forward notification of the will to the Central Registry of Spanish Wills in Madrid.
This type of will is handwritten (not typed) by the testator. It must be signed and dated on the bottom of each page by the testator. However, before the instructions contained within the will can be carried out, on the death of the testator, the will must be presented to the courts and validated as a genuine document before a judge. The testator´s nearest relatives must confirm the deceased’s handwriting. Once the verification process has been completed, the judge will enforce the provisions of the will.
The contents and testamentary gifts are kept secret by placing them in a sealed envelope. The testator then declares before a Notary the following:-
- That the will is contained in the envelope.
- Whether the contents of the will were written by a third party or by you.
- Details as to whether the will has been signed by a third party or by you.
The Notary will then Seal and sign the envelope before filing the will at their offices. The Notary will then notify the Central Registry of Spanish Wills that a will has been made and the location of the will. The will must then be presented to the Spanish courts to validate the document.
We are a couple – can we make a joint will?
No. Each person needs to make a separate will detailing what needs to be carried out in respect of their Spanish assets.
What happens if I leave debts behind?
Your heirs are responsible for the payment of any debts that you leave behind. This should be deducted from your estate in the first instance (apart from inheritance tax) if your estate has sufficient funds and if the estate is accepted under the benefit of an inventory.
What happens to funds in my bank account when I die?
On your death your bank accounts will be partially frozen and no person will be able to withdraw any funds from your account (even if this is a joint account). The idea behind this process is to protect your estate, but in reality it is to protect the Spanish State. Bank accounts will only be unblocked once the bank has received the correct documentation as to the legal heirs of the testator and on confirmation that all inheritance taxes have been paid.
How do I pay my funeral expenses?
You will need to make advanced funeral preparations if you do not want your family members to bear the costs. If all of your money is in a bank account, remember the bank account will be frozen until such time as it is confirmed who the beneficiaries are and that the relevant taxes have been paid. It may be possible for the executor to include the funeral expenses as a debt as part of your estate when calculating taxes.
When does inheritance tax have to be paid?
Inheritance TAX must be settled within 6 months from the date of death. A further extension can be requested for a further 6 months by the tax payer, but the application to extend the date must be made and approved within 5 months from the date of death. Interest and late payment penalties will accrue on inheritance tax due after the expiry of the first 6 months from the date of death. Interest charged can be as much as 20% of the inheritance tax amount payable depending on the date in which it is paid.
Can inheritance tax be paid from my estate?
No. Inheritance tax is a tax personal to the individual heir and needs to be paid by them before they receive any inheritance. This has caused many problems in Spain as the heir may be due a large inheritance but may not have any funds to pay the tax so cannot release the inheritance.
Additionally, you will recall that as soon as the testator´s death is pronounced, assets are frozen.
Can I appoint an executor to deal with my estate?
Yes you can. The (almost) equivalent to an executor in Spain is an Albacea. An Albacea is named in your will and is responsible for carrying out your wishes and intentions on your death. They are also responsible for protecting the assets of your estate and ensuring that all assets are distributed in accordance with your instructions. Unlike other countries where the named executor has the power to sell property and distribute funds, an Albacea does not have that same power. The albacea has no power to sell a property and or distribute funds for example. Only the heirs to an estate can do this once the inheritance tax has been paid.
The Albacea can however:-
- Pay for the funeral and other expenses in accordance with the provisions of the Will.
- With the consent and agreement of the heirs, deal with any cash bequests and legacies.
- Guard the execution of the Will and stand as to its validity in a Court or any other place, when necessary.
- Take all necessary precautions to preserve and keep safe the deceased estate for the protection of the heirs.
If you intend to leave your Spanish estate to heirs who are resident in another country, it is always wise to appoint an Albacea who is on the ground here in Mallorca. You can appoint a personal friend or colleague or instruct a paid Albacea from a company who will ensure that all loose ends are tidied up for your heirs as soon as reasonable possibly. They can also later be instructed by your heirs, by way of a power of attorney, to sell any property and distribute those funds accordingly, should they choose to do so and once the property has been transferred into the names of your heirs.
What is the rate of Spanish Inheritance Tax?
Inheritance tax in Spain is very complicated and has many depending factors including (but not limited to):-
- The amount of the estate being bequeathed.
- Whether the testator is of Spanish or foreign nationality.
- The age of the Beneficiary.
- The personal wealth of the beneficiary.
- The calculated Cadastral and local land tax valuations.
- Regional and State Deductions available.
- Whether the beneficiary has any disability.
It is always advisable for the beneficiary to seek advice on this matter before accepting a testamentary gift. See our other guide: A guide to Inheritance Tax – Mallorca
It is always advisable to make a Spanish will to deal with your assets here in Spain for the following reasons:-
- It means that your beneficiaries do not have to go a lengthy legal process in their own country.
- Your Spanish will make clear how you intend to leave your property – thereby resolving any arguments that may occur as to who is entitled to what.
- Your beneficiaries will not have to pay lengthy legal and translations costs.
- It will save time preventing your beneficiaries from incurring fines and penalties and interest payments due for none payment of inheritance tax.
If you would like help on the making of a will here in Mallorca please do not hesitate to contact us.
The next steps
If you would like help and assistance or further advice regarding the making of a Spanish will, please feel free to contact us for a free consultation:-
Key Consultants Mallorca
Ramon de Moncada
07180 Santa Ponsa
: 971 680000