The free movement of people may be one of the fundamental rights of the European Union, but it has arguably caused the greatest difficulties for EU nationals in matters of probate.
Which law will be applied to my Spanish estate?
Laws across Member States are rarely uniform for succession purposes. In cases where the deceased was a national of one Member State but domiciled in another, careful consideration will need to be taken as to which laws will govern their estate. The national of a deceased person, where he or she was domiciled, and where his or her assets are located will all play a part in determining what laws should apply. To demonstrate, we take the example of a Spanish and Scottish cross-border estate in a more recent article here.
This disjointed approach to succession among Member States has been much discussed and bemoaned over the years. Thankfully, there have been moves to make EU-wide probate more simplified by way of European Regulation (No 650/2012) on succession. The new Regulation No 650/2012 aims to harmonise and clarify the conflicts of laws that exist between jurisdictions in the EU.
Who will benefit from my Spanish estate?
With Regulation No 650/2012 it is hoped that EU citizens will no longer be stopped from asserting their rights in the context of succession with cross-border implications. Essentially, EU citizens will be able to organise their succession in advance and set out who is to benefit from their estate by making a Spanish Will, without fear of their wishes being overridden.
Matters of succession will be treated under a single law and by one single authority, with each citizen electing whether the laws applying to their succession should derive from his or her country of origin or their habitual residence.
On face value this would appear to solve a myriad of problems for those wishing to adopt the rules of one relevant Member State, while having a foothold in another.
Will English law or Spanish law apply to my Spanish estate?
But what is to be made of the UK having opted out of the application of the Regulation No 650/2012? When trying to discover which jurisdiction will apply to their probate matter British citizens from England should bear in mind the following:
Irrespective of the nationality of the deceased and the location of all of the deceased’s assets, Spanish law will look to the national law of the deceased’s country of origin as the law of succession applicable to the deceased’s estate. So, if the deceased was from England but resident in Spain, then English law would apply to the distribution of the deceased’s estate, wherever the estate assets may be located.
Notwithstanding that, it is important to determine whether English law truly applies to the estate assets. If, for example, the deceased in our example had moveable assets, such as money in bank accounts wherever situated, and real estate in Spain but not in the UK, then English law provides that Spanish law applies to the succession of the moveable assets as well as to the real estate.
If, however, the deceased in our example owned real estate in the UK, whether or not he owned real estate in Spain, the Spanish Supreme court has held repeatedly that English law will apply to the entire estate in Spain.
Hence, if a deceased was resident in Spain and owned no real estate in the UK, then Spanish succession law will apply. It is in this instance that Britons should beware.
Spanish estates and forced heirship
Spain’s laws on forced heirship, where the deceased’s children have a right to receive a proportion of their late parent’s estate, are well established. If a British citizen has specifically excluded his or her offspring from benefiting from his or her estate in a will, and yet is living in Spain with no immoveable assets in the UK, then upon death the administration of his or her estate will be governed entirely by Spanish law and the rules on forced heirship will apply.
It remains to be seen whether the Spanish courts will take a different view of the applicability of Spanish law once the EU Succession Regulation comes into force, in circumstances in which a deceased British national elects English law as the law to govern his Spanish estate.
What is certain is that anyone looking to make a will specific to certain individuals and/or charities should seek independent legal advice to ensure that no one else benefits from their estate.
If you are affected by these issues and you would like to seek further advice, please do be in contact with us. You can contact us by email at email@example.com, by telephone on 020 3478 1420, or by completing our contact form.