One of the most frequent questions we are asked about when clients approach us considering to make a Spanish Will, is whether Spanish law and Spanish Tax rules will apply to their assets, and in most of the cases, clients are surprised when we say that not necessarily Spanish Law will apply to their assets in Spain but the contrary, it is most likely that English Law will apply.
Therefore, to the question of whether English Law can govern someone´s Spanish estate, the answer to that question is YES.
Regulation (EU) 650/2012 of the European Parliament more commonly known as EU Successions 'Regulation), states that the applicable law to an international estate is the law of the last habitual residence of the deceased. Before 2015, when the said regulation entered into force, the applicable law to an international estate was the national law.
Therefore, Spanish law shall have no impact to UK citizens owning property in Spain, as long as they are based in the UK at the time they die.
Spanish law shall apply to their Spanish estate, only if at the time of death, they had moved to live in Spain, and therefore, die being Spanish residents.
However, the European Regulation gives the testator/testatrix the ability to choose which law will be applicable to their succession, or, in other words, it allows them to choose their national law instead of the law of the last residence. This way, UK citizens owning property in Spain can make sure that if they live in the UK when they die, or if they had decided to retire in Spain, their Spanish assets will be transferred according to English law, avoiding Spanish law and the forced heirs' rules.
Therefore, it is advisable to introduce a clause of choice of law on a Spanish Will.
The main reason we recommend that to our clients, is to avoid the above-mentioned forced heirs' rules. Under English law there is freedom of testament, so there are no legitimacies. The testator can freely leave the estate to whomever he/she wants. However, in Spain there are "forced heirs" ("herederos forzosos"), who, by law, will inherit a share of the estate (in Spanish, the "legitima").
To avoid that applying to your Spanish estate, the previously mentioned choice of law is of essence.
There is some confusion about Spanish Wills and Spanish law. One thing is what Will is valid i.e. it could be a UK Will or a Spanish Will, and a completely different aspect is what succession law we shall use. It could perfectly be the case that a UK citizen who owns a property in Spain and who had a Spanish Will, will see his/her Spanish estate governed by English law.
Furthermore, we should distinguish the above from the tax rules that will apply to the Spanish estate of a British national. Again, we could see a UK citizen, with a property in Spain, having a UK Will, having to deal with the transfer of the asset using English law, but Spanish tax rules applying.
Therefore, as you can see there are several aspects to consider when dealing with an international estate, where both jurisdictions are going to interact in one way or another.
We will talk about English Wills covering Spanish assets of UK citizens in another post.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
