In England & Wales it is impossible for buildings and land to be registered in the name of a minor (someone under 18 years of age according to English law). Instead, property is held in trust for the minor, whereby the legal owner of the property is an adult who holds the beneficial interest in the property for the minor. There may be more than one trustee and more than one beneficial owner. The duties of a trustee in those circumstances are established clearly by law in England & Wales.
According to Spanish law there is no mechanism available for trustees to hold assets legally for beneficiaries in the same way. The person who is the registered owner of the property is the absolute owner. He or she may have obligations to a third party, but the interest in the property itself belongs to the registered owner, absolutely.
Inheritance of Spanish assets by minors
If a building is inherited in Birmingham and the sole beneficiary of that building is a minor, the executor of the estate (or the trustee of any Will trust owning the legal title to the property) will be able to register the property in his or her name. It may also be a personal representative in the case of an intestacy (where the deceased did not make a Will) who has an identical role. The executor/trustee or personal representative will hold the legal title to the property on trust for the minor, who is the beneficiary. When the minor reaches the age of majority the property can be held in the name of the beneficiary in his or her own right. If the property needs to be sold at any point prior to the minor reaching the age of majority, then provided the executor/trustee or personal representative is acting within the limits of his or her obligations according to law, the executor/trustee or personal representative may sell the property and reinvest the proceeds for the benefit of the minor.
If a building is inherited in Spain in similar circumstances, then provided all those with parental responsibility for the minor agree, the property can be registered in the name of the minor him/herself. Once the minor reaches the age of majority, the minor may sell the property without reference to anyone else. However, until that time the minor may only sell the property with the permission of his/her parents, or those with parental responsibility, and with the consent of the competent authority in the jurisdiction in which the child is habitually resident. (Please see Articles 5 and 8 Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children.)
This may not pose such a problem in a situation in which the minor is the sole owner of the property, as it is arguable that the minor and his or her parents (or others with parental responsibility) may simply exercise patience and realise the asset when the minor turns 18. However, where the property is owned by various beneficiaries, because, for example, the Will of the deceased left it to a number of people in equal shares, then there may be reasons for which the property needs to be sold more swiftly. Alternatively, there may be other reasons as to why an immediate sale of the property would be beneficial.
Ownership of property in Spain by a minor who is resident in England or Wales
If a minor owning property in Spain is resident in England or Wales, it will be the High Court that has jurisdiction as to whether those with parental responsibility may realise the asset. As you would expect, the court will be most concerned with whatever is in the interest of the minor, notwithstanding that any co-owners may be keen to realise their share of the asset straightaway. Given that a minor cannot engage a legal representative him or herself, or make an application as a litigant in person, it is necessary that a litigation friend be identified in whose name the application can be made. Any other interested parties will also need to be party to the proceedings.
In coming to its decision as to whether property owned by a minor in Spain may be sold, the court will need to understand the following:
(i) How the circumstances have arisen that necessitate such an application;
(ii) How an estate on death is administered in Spain;
(iii) The specifics of the administration of the estate in question including reference to all of the estate assets and the way in which they have been distributed to beneficiaries to date, if at all;
(iv) The practical reasons for which the property needs to be sold in the interest of the minor(s);
(v) The reason for which an order of the English court is required to sell it, including specific reference to Spanish law and the basis in English law of such an order, and finally and perhaps most importantly;
(vi) The current financial position of the minors and of those with parental responsibility for them, going to the crux of the reason as to why the asset needs to be realised now, rather than when the minor(s) attains the age of majority.
In addition, the court will expect to receive copies of all relevant documentation, translated into English if drafted in Spanish, supporting the application. An affidavit as to Spanish law will also be necessary.
Providing sufficient details to the court may seem to the applicant to be a very intrusive and onerous process. The court needs to understand the entire matter, leaving no stone unturned, in order to be able to take a decision in the interest of the minor(s). Failure to reveal relevant information at the application stage may well result in the court asking for further information, [staying the proceedings] until further information or documentation is made available, or insisting upon a hearing in person, thereby increasing the costs of the matter considerably and delaying any order, as well as delaying the sale of the Spanish property.
Making a successful application in England & Wales for permission to sell Spanish property belonging to a minor will depend to a very great degree, if not entirely, on engaging a specialist practitioner with experience of this narrow type of application. Detailed knowledge of both English and Spanish law and practice in this area are essential, as the English court is being asked to determine the outcome based on both the interests of the minor(s) according to English law, as well as the applicable Spanish law.
It is important to note that this article seeks to provide information to those who find themselves in a situation in which one or more minors already own property in Spain, which for whatever reason they want to realise. However, if at all possible it is highly recommended to avoid either oneself or the beneficiary(ies) of one’s estate being in this position in the first place. Careful estate planning is essential. Failing that, there are other ways in which to avoid minors owning interests in Spanish property that they have inherited in certain circumstances. In short, all steps ought to be taken to avoid a minor owning an interest in Spanish property, provided it is in the interest of the minor to do so.
At E&G Solicitors in Spain we have the necessary experience and knowledge in this field of law and practice, in respect of both English and Spanish law, and as such we are able to advise and assist anyone finding themselves or their client in scenarios such as those described in this article. If you are affected by any of the issues set out in this article, please do be in contact with us by email at firstname.lastname@example.org, by telephone on 020 3478 1420, or by completing our contact form.
Please also see our pages on Succession and Probate in Spain.