Testament - is it necessary?
2023-03-24
Estate Planning in Spain: What You Need to Know
Do you live in Spain year-round or own a holiday home there? How much time do you spend in Spain each year? If so, it’s worth familiarising yourself with the inheritance laws introduced in 2015 that affect your property in Spain.
When the EU’s new Succession Regulation came into effect in August 2015, it significantly changed the rules. If you’re a Swedish citizen living abroad, the inheritance laws of the country where you reside will apply unless you choose otherwise.
The primary rule is that the deceased’s country of habitual residence determines which law applies to the inheritance and which court has jurisdiction. This is a substantial change for Swedes living abroad and has significant implications for those residing in another EU country.
The Basics of EU Inheritance Law
If, for example, you live in Spain, Spanish inheritance law will apply to your estate unless you specify otherwise. However, the new regulations allow you to draft a will stating your preference for Swedish inheritance law to apply upon your death.
One might assume that inheritance laws across European countries are similar, but issues such as reserved shares of inheritance, stepchildren’s rights, and the treatment of personal property can vary greatly. Therefore, it’s advisable to review and update any existing wills or draft a new will specifying your choice of applicable law if this has not already been done.
The Transition from Nationality to Domicile
Since August 2015, the EU has applied a new Succession Regulation. Previously, the *nationality principle* determined inheritance law, meaning the laws of the deceased’s country of citizenship were applied. Now, the *domicile principle* applies, meaning inheritance is governed by the laws of the country where the deceased was residing at the time of death.
In brief:
1. Inheritance for Residents in Sweden: Inheritance for individuals residing in Sweden will follow Swedish inheritance law, even if they own assets in Spain.
2. Inheritance for Swedish Citizens Living in Spain: If you are a Swedish citizen residing in Spain, you can draft a will specifying that Swedish inheritance law should apply, even though you live in Spain. The will should meet Swedish formal requirements, such as being signed in the presence of two witnesses. (Although some Spanish lawyers may insist the will must comply with Spanish formalities, this is incorrect. However, it can be helpful to draft the will in both Swedish and Spanish.)
3. EU Succession Certificate: A key innovation of the new EU regulation is the ability for authorities in any EU country to issue a succession certificate, which is legally valid across all EU member states. In Sweden, the Tax Agency (Skatteverket) issues succession certificates for estates governed by Swedish inheritance law.
Spanish Wills and Tax Considerations
You only need to draft a Spanish will under Spanish formal requirements if you live in Spain, wish Spanish inheritance law to apply, and want to determine how assets are distributed under Spanish law.
Even if the deceased was a Swedish resident, Spanish inheritance tax must still be paid on real estate in Spain.
Having a Spanish will can significantly simplify the process—not only in terms of cost but also time, as Spanish inheritance tax must be paid within six months of the date of death.
Practical Implications of the New Law
As with any new legislation, it’s interesting to observe how courts and other authorities apply the rules in practice. The full impact becomes clear only after several years. Therefore, staying informed and seeking professional advice is essential to ensure your estate is managed according to your wishes.
For more information please contact Veronica Nyberg at Nyberg Legal
Tel: +34 654486642
[Text: SkyBlueMedia for Destination Los Alcazares & Destination Torrevieja]