The Clawback


The clawback is the term used for one of the main tools that in Spanish Law protects the reserved share.

Taking into account that the reserved share is calculated from the sum of the value of the assets left by the deceased and the value of any gifted assets during his or her life, it may occur that either those gifts or other dispositions of property upon death, such a legacy bequeathed in the last will, have an effect on the reserved share of the forced heirs. There might be insufficient assets left in the estate to complete the reserved shares so the gift made in life or legacy ordered in the testament, must be reduced.

Who is affected by the reduction?

If there is only one recipient of the gift, or one beneficiary of a legacy, this will be affected by the claim of any, or all, forced heirs.

If there is more than one recipient, or more than one legacy, or one gift and one legacy, the reduction follows this order:

.-If there are gifts and legacies, the gifts made during life will be maintained, so legacies will be reduced first.

.-If there is more than one legacy, they will be reduced pro rata unless the testator established that one of them will be the last to be reduced.

.-If the reduction of the legacies is not enough to complete the reserved share, and there is more than one gift, gifts will be reduced, starting from the most recent.

When is it done?

.-If the reduction affects only the assets that are left upon death among the inheritors, the reduction usually takes place at the sharing out of the estate and is done by contador partidor the contador partidor if one is named in the will. If there is no contador partidor named, the heirs can make a claim to share out the estate in a court proceeding that has as its main object the naming of a contador partidor.

.-If the disposition of property upon death to be reduced is a legacy, as this must be delivered by the contador partidor, if one is named, or with the consent of the forced heirs, if there is no contador, at that moment the reduction may be claimed.

.-If a gift is to be reduced, it is done by making a court claim which has a time limit of five years from the date of death.

How does the reduction work?

.-The reduction implies that the beneficiary of the legacy or the gift must complete the reserved share of the forced heir claimant.

.-If the reduction amounts to the total value of the gift, the recipient of the gift does not have to reimburse the benefits already obtained from it.

.-If the reduction does not amount to the total value of the legacy or gift, and the assets legated or gifted do not allow a proper division, they will be reduced in this way:

If the reduction does not amount to half of the value of the asset, it will be kept by the legatee or the recipient of the gift. If the reduction amounts to more than half of the value, the assets will be given to the forced heir. In both cases compensation must be paid.

If the legatee, or the recipient of the gift in the first case, or the forced heir in the other, does not want to use the right to keep the property of the asset, it will be sold in a public auction.

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