Estate Planning
International Succession

Estate Planning
International Inheritance

If estate planning is always advisable, it is even more so when some kind of foreign connection is involved.

A core issue for international estate planning is to know what law is going to rule the succession, which is important even in cases where at the time of death there are no assets to be inherited at all.

This can happen when there are only debts, and therefore the applicable law will determine the liability of the inheritors.

This can also happen when all the assets had been disposed of by the owner during his or her life by way of gift or life insurance policies and those disposition of assets can harm any reserved share some close relatives may have under the law which governs the succession, and therefore be subject to a clawback.

And all those problems may arise whether the deceased had made a Last will and Testament, or not.

The rules in Spanish law to determine the applicable law to a succession will be applied if a Spanish Authority has jurisdiction to deal with it whether it is for the succession as a whole, or limited to just Spanish assets.

This rule is the EU Regulation on Successions (EU 650/2012) for successions opened after its entry into force ( 17-August-2015). This rule will be applied whether the deceased was a national or a resident of an EU Member State or not.

This EU Regulation states that the law to rule the succession will be that of the last residence of the deceased.

In Spain there are different laws to rule the succession ( Galicia, Basque Country, Navarra, Aragón, Cataluña y Baleares) which will be applied to Spaniard with the corresponding “ Vecindad Civil” or to foreigners whose last residence was in one of these territories.

The EU Regulation gives, for the first time, the opportunity for the person who undertakes estate planning to choose the law of his or her nationality.

This choice may be important as:

.-The choice of Law will be valid, even when the law of the nationality does not establish its own application.

.-Will avoid the «renvoi» and all the problems that come with it

.-The choice may be for the law of the nationality that the person who makes the estate planning has, at the time of making the will or at the time of death

.-If the person has more than one nationality, any one of them can be chosen.

Even, when a foreign law is chosen, all requirements to inscribe the assets in Spanish Registers ( E.G. Land Registry) will be ruled by Spanish Law, so it is proper advice to make provision in the last will, even when a foreign law is going to be applicable, for some kind of figure to facilitate the recording of the assets by the beneficiaries in the Land Registry with the proper wording as may be the ordering of legacies with a person named to make the necessary notary deed ( advisable to do it before a Spanish notary).

In any case, if the person is a Spanish resident and accepts Spanish limitations on succession like reserved share, «pretericion», «reserva»,Trusts or «sustitución fideicomisaria», and the majority of the assets are in Spain, the law of the last residence will be advantageous because the concepts and wording of the laws make the succession much easier to deal with.

The interested party who may undertake estate planning under Spanish law can make a disposition upon death as explained in preparing the inheritance or even do nothing in which case the Spanish regulation on the legal inheritor would be applied.

Any Questions?

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