Spanish wills

Fiscal and legal advice from Webster Asesores

Dear Sir,

One thing we have been putting off is making Spanish Wills. We are now stuck in England and hoping to visit in the summer.

We have heard that, due to owning property in Spain, we are not permitted to appoint the surviving spouse as beneficiary of the Estate.

Please could you clarify? We have both been married before and have children from our first marriage, and we would like the children to be the beneficiaries after we have both gone.

Answer

English succession law allows you free disposition of your assets, and therefore if you include in your Spanish will that you wish English law to apply to your succession, you may leave your surviving spouse your Spanish assets, substituting the spouse by your respective children. If you don’t make a will, the assets will in all probability go to the direct descendants.

In the event of making a Spanish will, which it is your intention to do anyway when travel restrictions are over, you should look carefully at the inheritance tax implications. The reason for this is that there are special tax-free allowances if the beneficiaries are either the spouse or the children of the deceased.

In your email, you explain that your wishes are to leave each other’s assets to the surviving spouse and after the second death to the children. The maximum tax-free allowance will be applicable on the first death, but on the second death, the surviving spouse will presumably leave assets to the children of the deceased spouse who will not be direct descendants and therefore not entitled to the maximum tax-free allowance.

One way to ensure that your children receive your share of your assets and also are entitled to the maximum tax-free allowance, and to include your spouse in the inheritance, would be to leave to your spouse the life interest of the estate and leave to your children the bare ownership. By doing it this way, each beneficiary that you wish to include in your inheritance will receive their share and benefit from the tax-free allowances.

On the first death, the spouse will receive the share and so will the direct descendants and as such, will be entitled to apply the tax allowances.

By doing it this way, is also secures that your children inherit. The reason I write this is because it has happened sometimes that the surviving spouse, after the first death, decides that he or she does not wish to leave anything to the stepchildren and makes a new will, thus leaving the first spouses´ children out of any inheritance.

It is therefore very important to take the right advice and to think and plan ahead, although it may seem unpleasant to do, but necessary in our opinion.