Have you got a will – Important changes from 2015

Filed under : Tax Planning - Inheritance

Free disposition of assets has a long tradition in England & Wales and you will have heard stories of wealthy individuals leaving all their assets to friends or even the local dog’s home. In one recent case a Judge had to decide if the owners of a local Chinese restaurant could receive their inheritance from a rich client’s will. In that case it was shown that the restaurant owners had befriended the testator many years ago and the Judge upheld the principle that the man was free to leave his assets to whoever he wished and to exclude family members.

In many other countries such as Spain a person has obligatory heirs and in Spain you must leave 2/3 of your estate to your children. Scotland has a concept of prior rights for spouses and children but the English and Welsh legal system does not.

Even more important for many Spanish property owners will be the changes coming in from August 2015. The new European legislation could mean you are bound by the rules on obligatory heirs and cannot leave everything to a spouse which is one of the most common wishes for English testators. This will be particularly important for people in second marriages or civil partnerships where there are children from a previous marriage.

Once the regulation is in force and IF you fail to make a valid will with a particular clause about the application of your national law your estate may fall to be decided by Spanish rules. There has been some confusion because Notaries often state in your Spanish form will that they make no comment on your national law which is English law. This is different from actually electing or choosing your national law.

If you are resident in Spain and have not made a Will then as from August next year, the possibility is that Spanish law will apply to your estate if you die. This means that your children, and possibly even your parents would take priority over your spouse in the distribution of your estate.

Prevention is better – and considerably cheaper – than cure as contesting wills is a very costly matter in any jurisdiction.

Prior to 1975 there was little protection for those excluded from a will but legislation was brought in to protect immediate family members who were economically dependent on the deceased. From October 1st the Inheritance and Trustees’ Powers Act has extended this protection for dependents to include children who have been treated as a child of the family and some who are later adopted.

This article mainly covers the situation for people from England and Wales. For information about the rest of the United Kingdom, Ireland, Dutch, Danish, Skandinavian, French and Italian wills and succession For more information contact wills@decottalaw.net