Did you know that two-thirds of your estate automatically gets passed down to your children in Spain?
While most people draft a detailed will to help manage their affairs, Spanish property laws are incredibly unique. When it comes to the question of who inherits property, Spanish law highlights that your children should automatically inherit a majority of your assets.
This differs from property inheritance laws in other countries, as a documented will would essentially dictate exactly who gets what.
Interested in learning more about Spanish inheritance laws? Read on for everything you need to know about inheriting property in Spain.
Who Inherits Property?
When it comes to inheritances, property is usually the largest single asset to consider. This is also the most debated asset since it’s not as easy to distribute as liquid cash. While inheriting property is simple in other countries, there are unique property laws in Spain to help with succession.
Property Law in Spain
Spanish Succession Law is incredibly clear when it comes to who inherits assets within an estate. While other countries may look at the will to determine who gets what, Spanish law makes it clear that at least two-thirds of your estate must go to your decedents.
The most important thing to keep in mind about this law is that children take preference over any spouse. This means that your assets will be directly distributed to your children even if your spouse is still alive. This is assuming that your children don’t waive the right to their inheritance.
However, the Spanish law breaks down the distribution even further. This is because one-third of your estate has to be distributed equally between all your decedents. Your second third can be distributed to your children in whatever proportion you decide.
What If You Have a Will?
A will is essentially a document that outlines your wishes after you pass away. These documents can be as detailed as you want, highlighting what should be done with all your assets. A will appoints an executor to consolidate your estate and distribute your assets to everyone.
As mentioned before, a will is the most important document that dictates how your estate is to be divided. However, the Spanish property laws supersede this entirely. This means that if you have a will in Spain, a majority of your assets, including any property you own, will still need to go directly to your decedents.
Rights of the Widow/ Widower
Children will receive preference over a spouse when it comes to distributing an estate. Since two-thirds of the estate is set aside for decedents, the spouse is left with the last third. However, this is only done if the will clearly states that the spouse should receive it.
Spanish law also has a provision called the “right to use” policy. This basically allows the spouse to continue to live on the property for the rest of their lives.
Other Relatives
If your children are not alive, the succession law states that your assets will be distributed to your grandchildren. When it comes to other relatives that may be listed as beneficiaries in your will, they can receive more than one-third only if you don’t have any children or grandchildren to accept the inheritance.
What If You’re Not Spanish?
The property law in Spain is very unique compared to other countries in the world. However, does this law still apply if you own property in Spain but are not Spanish? The answer is that it depends on the succession law in your home country.
If you have moved to Spain and are a Spanish citizen, you will have to abide by Spanish law even if your will was drafted in another country. If you’re living in Spain but are a member of another EU country, you can request for a will to be drafted when you buy your home in Spain.
Despite this, the updated regulations make it incredibly clear that at least two-thirds of your Spanish estate must still go to your direct descendants.
Inheritance Tax
When you inherit property in Spain, there are significant inheritance taxes to pay. These taxes can range depending on how valuable the property is. Even if you are not Spanish and are not living in Spain, you still have to pay this inheritance tax when transferring the property.
There are two different kinds of inheritance taxes that you can potentially pay. The first is a regional inheritance tax that all Spanish citizens and residents have to pay. If you have been living in Spain for more than five years, this tax applies to your inheritance.
If you are not living in Spain or have not been in Spain for more than five years, you will then have to pay a national inheritance tax. The difference is simply that the tax goes directly to the national government instead of the local government.
What Happens to Unclaimed Inheritance?
If an inherited property is unclaimed, the estate will be transferred to the Spanish state. As mentioned above, there are significant inheritance taxes associated with taking ownership of property in Spain. This is why many people choose to abandon their inheritance or sell the property as soon as they inherit it.
Inheriting Property in Spain
Spanish law is very clear when it comes to inheritance. While other countries around the world may prioritise a will, Spanish property laws protect the rights of children to inherit real estate from their parents. Even if there is a spouse, the children are still set to inherit the majority of all assets, real estate included.
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