The new succession regulation – Busting the Myths

Filed under : Civil Law, Wills, Probate & Inheritance

This affects the inheritance law which applies to the estates of people who die after 17th August 2015. Most people by now are aware that there will be a change but there is a lot of confusion in respect of who this affects and how.

Basically pursuant to Article 21 of the Regulation, as from August 17th 2015 the applicable law to the estate of an EU national will be the law of the country of their residency. A UK national resident in Spain would therefore have Spanish law applied to their estate. Under Spanish law (as applied to Spaniards) a testator must leave two thirds of their estate to their children. Indeed even the parents of the deceased are obligatory heirs to one third of the estate if there are no children with a priority over the spouse.

Any residents of Spain who die intestate will have Spanish intestacy rules applied to their estate regardless of their nationality. This means the spouse will not inherit the whole estate if there are living children or parents of the deceased. IF YOU HAVE PROPERTY IN SPAIN AND DO NOT HAVE A SPANISH WILL YOU SHOULD MAKE ONE AS SOON AS POSSIBLE.

However, Article 22 allows someone who is the national of one European State but resident in another to elect to have their national law applied to their estates. This for UK nationals means much more flexibility in the beneficiaries whom they can choose. The most logical document to use to declare this election would be in a Will and articles 22 and 27 would allow a declaration in a Spanish form Will that “English” law applies.

Article 83 provides for transitional provisions. The most important of these under Art 83.4 means that if a person made a Will before 17th August 2015 which was compliant with the law that the testator could have chosen (i.e. their national law) then they will be deemed to have elected this law to apply to their estate. This means it is not likely to be necessary in most cases for clients to amend their wills for Spanish assets. However this Article won’t apply to wills made after August 2015 so any will made from that date on needs to have the declaration of applicability of national law in order for that law to be applied to the estate.

Myths and truths

Myth – this Regulation doesn’t apply to British nationals.
Truth – whilst it is true that the UK has not signed up to this Regulation, it will apply to the assets of UK nationals in Spain. Indeed it applies to nationals of non EU countries such as Chinese or Russians.

Myth – Everyone has to make a new will specifying that they choose the law of nationality.
Truth – The election of national law only has to be stated in wills signed after 17th August. If you made a will before this date which complied with your national law this is a deemed election and your national law will be applied to your estate.

Myth – If you don’t make a Will by 17th August it is too late and you are stuck with Spanish law.
Truth – The opposite is in fact the case and the requirement to state an election of national law doesn’t come in until 17th August although if making a will before this date it is good practice to do so. Certainly any will made after 17th August should contain a clause stating that the testator elects their national law in accordance with the Regulation.
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