Succession Law glossary-Italy

Photo by Ju00c9SHOOTS on Pexels.com

This glossary is directed mainly to legal advisors dealing with deceased estates with some property situated in Italy, or where Italian domestic law applies.

The glossary lists some of the main Italian legal terminology on the subject, translated into English.  However, readers will be aware that the legal meaning and effect of certain translated terms will not be identical to their meaning under English law.

Specific legal advice will be required at all times and this glossary is intended to be a guideline only. 

Acceptance of succession

Under art. 470 of the Civil Code, acceptance of a deceased’s estate by an heir may be express or implied.

  • Express acceptance – may be either by way of a ‘simple’ acceptance or may be subject to the ‘benefit of an inventory’;
  • Acceptance subject to the benefit of an inventory – limits an heir’s liability for the debts of the estate to the amount of the net assets actually received from the estate. Very stringent deadlines apply in this case and beneficiaries are advised to contact Italian counsel as soon as possible;
  • Implied Acceptance – when an heir’s conduct is such that it unequivocally shows their willingness to accept the inheritance.

Administrator (Curatore Speciale)

Under art. 356 of the Civil Code, should the deceased have left assets to a minor, even if subject to parental control, the deceased would also be entitled to appoint a guardian to manage such assets. Unless the will provides otherwise, the administrator should request the judge supervising guardianship or court to authorise any act exceeding the normal course of management of the asset, as provided by articles 374 and 375 of the Civil Code (for example, in order to release a mortgage, to establish a pledge or undertake obligations as regards the asset).

Apostille

Used for the authentication of documents executed in another country which is signatory to the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents. The apostille is placed on official Government or notarised documents including (but not limited to) powers of attorney, solemn declarations, grants of probate and letters of administration, affidavits, birth certificates, death certificates etc.

Barrister and solicitor (Avvocato)

An Italian lawyer is known as an avvocato (please note that the legal profession in Italy does not provide any distinction between barristers and solicitors).

Central register of published wills

This is a centralised register held by the Notaries’ Registry in Rome it is possible to obtain information from as regards a deceased person having left a will which has been published and, if so, to obtain a copy of it. Italy is also a party to the Basel Convention which has reciprocal consultation arrangements with the centralised registers of countries which have ratified the Convention, including Belgium, France, Holland and Spain.

Children

In 2014 a law totally abolished any previous remaining distinctions between children who were born within or outside marriage, therefore all children now have exactly the same rights of inheritance.

Civil Code (II codice civile)

The Italian Civil Code consists of 2969 articles, divided into the following six books: On Persons and Families, Succession, Property, Obligations, Employment & Business, Protection of Rights.

Division 

Is the term used to describe an act, by court order or private deed, to divide up a deceased’s estate into separate portions representing the proportionate interests of the heirs or of persons in community of property.  In English, this act is known as partition. 

Domicilio (translated in English as domicile)

Of a person is, under art. 43 of the Civil Code, the place in which he/she has established the principal base of his/her affairs or interests. The English translation as ‘domicile’ often causes problems and misinterpretation.

Executor

The testator/trix may appoint one or more executors who must ensure that the provisions of the will are faithfully carried out, whether in relation to the entire estate or just to part of it. The figure of the executor is, however, rarely used in Italy.  The executor appointed under a will can only manage the estate for up to one year from the death of the testator. This is another instance where the translation into English causes misunderstanding, as the role of the ‘esecutore testamentario’ is very different from that of the executor under English law. 

Forced heirship (Reserve hereditaire)

Under Italian law, a testator does not have complete freedom of testation and a certain portion of the deceased’s estate is ‘reserved’ to their immediate family.  If a will breaches the share reserved by law, an heir who has been left less than his/her reserved share may bring legal proceedings to remedy such breach, through the reduction of the shares given to beneficiaries without a right to a reserved share or whose reserved share has been exceeded in the testamentary dispositions. Until such time as a reduction is granted, the will remains valid and enforceable.

General Registry of Persons (Anagrafe)

Where the records of births, deaths and marriages, residential address and family status are kept.  These are managed by local councils. It also records data for Italian residents as Italian nationals living abroad.

Gift inter vivos

A gift made during a person’s lifetime.  Under Italian law, any substantial gift must be taken into account and set off against the person’s inheritance in application of the forced heirship rules.  Immovables and movables not capable of simple delivery of possession must be transferred by a deed of gift executed before a Notary and two witnesses.

Heir

An individual who succeeds to all the rights and all the obligations of a deceased person, or a portion thereof, either pursuant to a will or by law, should the deceased have died intestate.

Hotchpot (Riunione Fittizia)

The taking into account of gifts inter vivos or advancements in order to ensure an equal distribution amongst the heirs.

Interim administrator

Should the person entitled to inherit have not accepted the status of heir and – so far – not taken possession of the estate property, the court may appoint an estate administrator either upon interested persons’ request, or of its own motion.

Intestacy

An ‘ab intestate succession’ means a succession where the deceased did not leave a valid will. In this case, the succession devolves pursuant to the provisions of the Civil Code. In Italy, it is frequent for a person not to prepare a will and rely on the provisions of the Civil Code.

Inventory

A detailed list of the assets, liabilities, credits and debts of the deceased, prepared by an heir who accepts the deceased’s estate with the benefit of an inventory.

Land Registry

All ownership rights relating to real property in Italy are registered at the Italian lands registries, which are organised on a provincial basis and now managed as part of the provincial revenue offices (Agenzia delle Entrate).  Each land registry is divided into two sections: one for the registration of title and charges, and the other for the mapping and classifying of property for tax purposes (catasto).  It is also possible to carry out on-line searches to identify any property owned by the deceased.

Legacy

A disposition of personal property by will.  A gift of personal property or money to a beneficiary (legatee) of a will.  

Legatee

A person who receives personal property through a will.  A person or organization receiving a gift of an object or money under the terms of the will of a person who has died.

Matrimonial regime

The legal system governing the property rights of a married couple that, in some jurisdictions but not in Italy, also applies to same-sex marriages, civil unions, and common law spouses. In Italy, spouses can be in either a ‘community of property’ regime or a ‘separation of property’ regime.

  • Community of property between spouses (comunione dei beni) is the presumed property regime applicable to them under Italian law, unless they choose a separation of property regime.  Community of property means that all property acquired by either or both of the spouses during the marriage is owned half each, irrespective of whether the property is registered in the name of one only or both spouses.
  • Separation of property (separazione dei beni) means that all property of the spouses is owned by them separately, with no right of ownership to the property registered in the name of the other spouse.

Notary (notaio) 

Is a private professional who performs public functions.  In Italy, a notary is vested by the State with public authority and faith which allows him/her to prepare ‘public deeds’, such as for the sale and transfer of real property registered in public registries, or take declarations which constitute proof in certain cases.  This system is widely spread around the world and has been adopted by many States, mostly belonging to the civil law tradition.

Opening of the inheritance 

The opening of the inheritance coincides with the death of the deceased. The title to the property of the deceased is deemed to pass immediately at this time to the heirs, unless they renounce the inheritance (doctrine of saisine).      

Representation (per stirpes)

From the Latin meaning literally ‘by branch’ which, in Italy, applies by operation of law where certain heirs who are close family predecease the testator/trix or the deceased in intestate succession, or decide not to accept the inheritance. In this case, the descendants will take the relevant quota in place of the heir who cannot or decides not to accept the inheritance.

Scission

In many jurisdictions the principle of scission applies whereby the distribution of movables upon the death of the deceased is governed either by the law of their domicile or the law of their nationality; whereas the distribution of immovables is generally governed by the law where they are situated (lex situs).  The principle of unity of succession, on the other hand, is applied in Italy.

Solemn declaration (acte de notoriété)

A document prepared and authenticated by a notary based on the statements of two witnesses.  It includes the civil details of the deceased person, the existence or not of a will, and details of the heirs and their respective portions. It allows heirs to demonstrate their status as heirs.

Statement of succession (dichiarazione di successione) 

A document that needs to be submitted to the Italian Revenue Office within one year of the death of the deceased, stating the succession of the deceased, thus listing details of all of the deceased’s assets and heirs, attaching the deceased’s death certificate, the family certificate of the deceased person and a legalised copy of the will. Upon filing, heirs are required to pay taxes and duties relating to the inheritance and once heirs comply with this procedure, it is possible to apply for real estate properties registered in the name of the deceased to be changed in the name of heirs in the land registry. 

Succession

Is the term used to mean Italian inheritance law, which is based on the Roman law tradition. Under Italian law, there are forced heirship rules for the protection of close family in the presence of a will or lifetime gifts. If the deceased dies intestate, the estate devolves to the closest surviving family in accordance with the provisions of the Civil Code.[1]

  • Unity of Succession – a fundamental principle of the Italian legal system.  Both in the sense that all the property and the rights of the deceased constitute a single entity passing to the heirs and in the sense that a single national law is applied to determine the succession rights of heirs and legatees even when property is situated in different jurisdictions.

Testamentary contracts

Contracts whereby a person agrees to dispose of his/her estate in a particular way, or concerning rights to the inheritance of a person who has not yet died are null and void.

Trust

On 21 February 1990, Italy ratified the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their recognition. The terms of the Convention entered into force on 1 January 1992 and apply to foreign trusts with assets in Italy. The ratification of the Convention by Italy does not create a local institution of the trust in Italy (article 13, Convention) although tax laws have been introduced regulating the tax treatment of trusts.

Wills

A will is a formal legal instrument which must always be in writing.  The two most common forms of will in Italy are the holographic will and the will by deed.  A will by deed is made either by public instrument or a secret will. In addition to the ‘ordinary’ forms of will, there are also special wills and international wills. [2]

  • Holographic Will

The holographic will must be entirely in the testator/trix’s own handwriting, and must be dated and signed by the testator/trix. The execution of the holographic will does not need to be witnessed.

  • International Wills

By Law 387 of 29 November 1990, Italy acceded to the 1973 Washington Convention on International Wills which empowers notaries in Italy to witness wills.

  • Secret Will

The secret will (also referred to as the ‘mystic will’) is not frequently used. This will has the most detailed requirements as to form.  Briefly, the testator/trix must personally hand over to a notary, in the presence of two witnesses, a document which may already be closed, and declares that the document contains his/her will. The notary records this information directly on the document or on the envelope in which the will is placed and then sealed.

  • Special Wills

Also referred to as ‘privileged wills’, they allow the testator/trix to express his/her last wishes in certain situations when it is not possible to make an ordinary will.

  • Will by Way of Public Instrument

A will made by way of a public instrument is a will signed by the testator before an Italian notary and in the presence of two witnesses. Under art. 680 of the Civil Code, a will may only be subject to revocation either by means of a new will (holographic will or will by way of public instrument, according to case law the relevant content of the later will should be verified, rather than the formal instrument used) or by means of a deed, received by a notary in the presence of two witnesses, by which the testator declares personally that he intends to revoke, fully or partially, his previous will.


[1] Under Regulation (EU) No. 650/2012, it means succession to the estate of a deceased person and covers all forms of transfer of assets, rights and obligations by reason of death, whether by way of a voluntary transfer under a disposition of property upon death or a transfer through intestate succession.

[2] Please note that under Regulation (EU) No. 650/2012, a further category is that of a ‘joint will’, that is a will drawn up in one instrument by two or more persons.

Succession Law glossary-France

Photo by Matt Hardy on Pexels.com

This glossary has been prepared for the purposes of the International Private Client Section Conference March 2016.

A

à titre gracieux: a gift

à titre onéreux: a transaction for consideration (ie a sale)

abattement: “nil-rate band” or tax free allowance

acheteur/acheteuse: buyer

acquéreur: buyer

acte de décès: death certificate

acte de notoriété: a deed prepared by the Notaire which sets out the family of the deceased and the beneficiaries of the estate 

acte de vente: contract of sale

action en réduction: right for a reserved heir to bring an action when the deceased has gifted more than his quotité disponible

action en retranchement: right for a child of a previous marriage or relationship to make a claim against the share of the deceased’s estate being received by the surviving spouse under the matrimonial property regime, if this share exceeds the spousal quotité disponible 
administrateur du trust: trust administrator

agent immobilier: estate agent

apostille/apostil: legalisation certificate, required on documents signed in the presence of an English Notary Public

assurance vie: life insurance

attestation immobilère: notarial document confirming to the Land Registry in France the passage of ownership of a property belonging to a deceased person

B

bénéficiaire: beneficiary

bien meuble: movable item

bureau des hypothèques: French Land Registry

C

capacité: capacity

clause d’attribution intégrale de la communauté au conjoint survivant: a clause whereby the “community” assets from a communauté regime are transferred to the surviving spouse on death

clause pénale: penalty clause in sale agreement

clause suspensive: condition included in sale agreement

code civil: the French Civil Code

code général des impôts: the French Tax Code

communauté: any type of matrimonial property regime whereby there are assets held for the “community” of the couple

communauté universelle: the most community based matrimonial property regime whereby all the assets are held for the “community” of the couple

compromis de vente: sale agreement (equivalent to an English contract for sale; signing this is roughly equivalent to exchange in England)

compte bancaire: bank account

consitutant: the settlor of a trust

contrat de mariage: marriage contract

copropriétaire: member of a copropriété ; the copropriété is the way the common parts of a building such as an apartment block are held

D

déclaration de succession: inheritance tax form

délai de rétractation/délai de réflexion: cooling-off period

démembrement de propriété: division of full property ownership (pleine propriété) into the strands of usus (use), fructus (fruit) and abusus (abuse – ability to sell or mortgage); normally represented by usufruit and nue-propriété

dépôt de garantie: deposit payment

domicile: residence

don manuel: a “hand to hand” gift, such as a gift of cash

donation: a lifetime gift

donation entre epoux: gift between spouses

dossier diagnostique technique: set of technical reports on the property produced by experts for the seller prior to sale

droit de préemption: pre-emption right

droits d’enregistrement: registration tax

droits de succession: inheritance tax

E

émoluments: notarial fees which are fixed by legislation

état civil: civil status 

état hypothécaire: French land registry search

exécuteur testamentaire: person nominated to oversee the administration of an estate (this is not the same as an English executor)

F


forfait mobilier: a value attributed to furniture and furnishings in the deceased’s estate (5% of the rest of the gross estate) where there has not been an inventory or a public sale

frais: costs

H

héritier: heir

héritier réservataire: protected or reserved heirs; i.e. a portion of the estate is reserved to them

honoraires: fees for a professional; for a notaire those fees which are freely fixed

hypothèque: mortgage

I

immeuble: immoveable asset, i.e. real estate

împôt: tax

incapable: someone lacking in capacity

indivision: property held as tenants in common


L

légataire: legatee

légataire à titre universel: legatee of a percentage of the estate, or all or a percentage of one type of asset (moveable or immoveable)

légataire particulier: specific legatee (including a cash legacy)

légataire universel: legatee of the universality of the estate (can be more than one such)

legs: legacy

M

mairie: town hall or municipal offices

majeur(e): an adult

mandataire: attorney, appointed under a power of attorney

meuble: moveable asset

meubles meublants: furniture and furnishings

mineur: a minor

N


notaire: French notary (lawyer qualified to deal with property transactions and inheritance matters)

nue-propriété: bare or underlying interest in property, similar to an interest in remainder; the combination of the nue-propriété and the usufruit combine to make up the pleine propriété

P


pleine propriété: full ownership 

plus-value: capital gain

police d’assurance: insurance policy

prêt: loan

prix: price

procuration: power of attorney

promesse de vente: preliminary contract or sale agreement can be unilatérale or synallagmatique (rare); see compromis de vente

propriétaire: owner

Q

quotité disponible: portion of a deceased’s estate over which he has freedom to distribute as he wishes

R

régime matrimonial: matrimonial property regime; basis on which the property of a married person is held

rente viagère: an annuity 

réserve: portion of deceased’s estate which is reserved for inheritance by certain family members

S

salaire du conservateur: literally the salary of the Conservateur (the person running the relevant land registry), but in fact a land registry tax

séparation de biens: the matrimonial property regime whereby assets held in one spouse’s name belong only to that spouse

séquestre: money held in escrow, normally by the cashier at a notarial firm

société civile immobilière (SCI): French property owning company

T

taxe à la valeur ajoutée (TVA): value added tax

taxe d’habitation: annual tax payable by the person in occupation of a property on 1st January
taxe de publicité foncière: land registry tax

taxe foncière: annual tax payable by the owner who owns the relevant land on 1st January
testament: Will

testament authentique: Will in notarial form

testament holographe: handwritten Will

titre de propriété: title deed

tontine: clause giving rise to property being held by the owners as joint tenants

tutelle: a regime protecting a minor or an incapable adult (this is one of a variety of protection regimes)


U

urbanisme: local planning matters

usufruit: the right granted to someone to occupy a property ‘usus’ and receive the rents from it ‘fructus’. Similar, but not identical, to a life interest under English law

V

vendeur/vendeuse: seller

vente: sale
vente en viager: a sale where the buyer pays the seller a lump sum and the remainder of the purchase price is paid by a monthly sum (known as a rent – a rente viagère) for the seller’s lifetime. There are two main types of viager, namely viager occupé and viager libre. The former is where the seller remains in the property for their lifetime (or can be let out and the seller receive the income) and the latter is where the seller vacates the property on completion.

David Anderson

Solicitor and Chartered Tax Adviser Sykes Anderson Perry Limited 

Condenada una aseguradora a indemnizar a una pizzería de Girona por las pérdidas sufridas por el confinamiento

Fernando Lacaba Sánchez, hasta el pasado mes de noviembre presidente de la Audiencia Provincial de Girona –cargo que ha ocupado durante 19 años consecutivos–, es el autor de una sentencia que va a dar mucho que hablar a partir de ahora.

¿Por qué? Porque, por primera vez en España, un tribunal –en apelación–, la Sección Primera de lo Civil de la citada Audiencia Provincial, condena a una aseguradora a indemnizar a un negocio, una pizzería, por las pérdidas sufridas durante el primer mes de confinamiento.

En el contrato suscrito no había ninguna cláusula que reflejara que por motivo de la pandemia tenía derecho a una indemnización, pero el magistrado Lacaba considera que sí.

«La cuestión a resolver es de naturaleza eminentemente jurídica y consiste en determinar si la paralización de un negocio de restauración a consecuencia de la legislación estatal dictada por la pandemia del COVID-19, está o no cubierta en el concreto seguro analizado. Se adelanta que la respuesta debe ser positiva«, dice el magistrado en la sentencia 59/2021 de 3 de febrero pasado, a la que ha tenido acceso Confilegal.

Leer Mas…

https://confilegal.com/20210209-condenada-una-aseguradora-a-indemnizar-a-una-pizzeria-de-girona-por-las-perdidas-sufridas-por-el-confinamiento/

A guide to probate: everything you need to know

How to deal with a will and estate

1. Find the will

Once somebody’s death has been registered and their funeral arranged, the first thing to do is locate the person’s will (or confirm they did not make one).

If you cannot find one in their home, contact the person’s solicitor, accountant or bank to see if any of them holds it. You can check whether a will is stored with the Principal Registry of the Family Division. Ask for a search to be made of the safe custody wills register.

2. Contact banks and other financial providers

The executors named in the will, or the people who will inherit if there is no will (called intestacy), should start assembling the financial information.

You should notify banks, building societies, mortgage lenders, credit card providers and insurance companies. Your first step should be the deathnotificationservice.co.uk, which allows you to notify several banks and building societies of a person’s death at the same time.

Then go to the Tell Us Once service, which lets you report a death to most government organisations in one go. You will be able to notify HMRC, DWP, DVLA, the Passport Office and so on in a few clicks.

3. Estimate and report the estate’s value

The executor needs to assess the amount in savings accounts, pensions, shares and Isas, and whether the dead person’s employer owed them wages. Debts such as credit cards must be paid off. If the mortgage lender requires interest payments to continue while you are applying for probate, the executor can pay these bills and reclaim the money from the estate once they have obtained probate. The executor should check if there are any payouts from life insurance policies.

4. Begin the formal probate process

The executor should apply for a grant of probate, which is the legal document that enables you to access funds, sort finances and share out assets the deceased accumulated.

The government website gov.uk/applying-for-probate sets out the process and whether you actually have to go through it. According to Step, in England and Wales, there is usually no need to apply for probate if the estate is worth less than £5,000. There is an application fee of £155 for estates over the £5,000 threshold, with a £60 fee added if you apply yourself rather than via a solicitor.

Assuming you have obtained an estimate of the estate’s value, and you have the original will and death certificate, you can begin the probate process online.

5. Decide whether to use a solicitor, probate brokerage or do it yourself

https://www.theguardian.com/money/2020/jun/06/a-guide-to-probate-everything-you-need-to-know?CMP=Share_iOSApp_Other

Probate scanning error stopped us selling my father’s house

My father died in February. We submitted our probate application in June but was later told that one page of the will had not been uploaded by the scanning department which is, apparently, outsourced. That single page has yet to be scanned and our probate application has stalled as a result. The contractual relationship between the probate office and the scanning provider does not appear fit for purpose, as there seems no method to escalate or expedite when its performance falls short. We accepted an offer on my father’s house yesterday. We need a grant of probate to exchange.
ST, Guildford, Surrey

Find out more below…

https://www.theguardian.com/money/2020/nov/25/probate-scanning-error-stopped-us-selling-my-fathers-house?CMP=Share_iOSApp_Other

Probate service has left us in limbo over my mother’s will

My family is desperate to get probate for my mother’s will after applying in June. It is basic and the only issue was that she did not put a full date when she signed in 1990.

As requested by the probate office, we provided evidence of when it was completed. This was mislaid for eight weeks and there has been no attempt to expedite the case or provide updates.

A second-level complaint was raised six weeks ago and has not been replied to. It is now sitting at the Manchester office where it’s been for the last two months.

Find out more below…

https://www.theguardian.com/money/2020/dec/24/probate-service-has-left-us-in-limbo-over-my-mothers-will?CMP=Share_iOSApp_Other

What capital gains tax will be due when my daughters inherit my flat?

Q I am an elderly widower. When I die I expect to leave my entire estate to my three daughters.

Part of that estate is a flat that I bought in 1997 for £68,000 but which is now worth about £250,000. What capital gains tax would be due – if any – when my daughters inherit? They will also inherit the family home, which has a current value of about £550,000.

I believe they will benefit from the tax rule that applies the tax allowance of myself and also of my late wife who died five years ago. I don’t want to leave them a tax bill as they will be in no position to deal with it. They are going to need everything I leave them to simply be housed and get by. I am quite concerned and would appreciate your advice.

There is no capital gains tax (CGT) when an asset such as your flat is inherited but there might be a bill if your daughters decided to sell it. However, it is likely to be a small one because the taxable gain (or loss) will be the difference between the flat’s value on the date of your death (so not its value when you acquired it) and what they managed to get for it less estate agent fees and legal costs. For there to be a tax bill, the taxable gain would have to be more than £36,900, which is three times the £12,300 CGT exempt amount that each of your daughters is entitled to in the 2020-21 tax year (assuming they have no other gains to set against the exempt amount).

https://www.theguardian.com/money/2020/aug/10/what-capital-gains-tax-will-be-due-when-my-daughters-inherit-my-flat?CMP=Share_iOSApp_Other

Succession Law Glossary – Spain

This glossary is directed mainly at the solicitor whose client dies in Spain, leaving property there. The radical difference between common and civil law have often made it very difficult to find equivalent legal concepts; in those cases, I have identified such a concept as typical or peculiar. In other instances, concepts have been explained briefly, but special advice in more detail may be required. This article also contains a small working vocabulary and definitions for important or frequently encountered concepts, including some idioms useful when dealing with Spanish private client work.

A

Administrator or executor (albacea)

The albacea is the Spanish equivalent to the executor or administrator – the person in charge of dealing with certain matters as to the estate of the deceased, according to the deceased’s wishes. However, while it is compulsory to appoint an administrator or executor under English law, under Spanish law, matters of ownership and payments, including death duties, are dealt by the beneficiaries, although it is open for the testator to appoint an executor of his state. This means an albacea is quite uncommon; the winding-up of the estate in Spain is carried out, in most cases, by the beneficiaries. The powers of the albacea are therefore much more restricted than those of the executor in England and Wales, particularly as those appointed to this role do not deal with payment of the taxes on behalf of the beneficiaries.

Agreements as to Succession (pacto sucesorio)

Is the binding agreement between the testator and a third party regarding his/her estate and will come into force upon the testator’s death. There are however restrictions as to who that third party may be. The main difference with a will is that wills can be revoked by the testator at any time whereas agreements as to succession can only be revoked by mutual consent of the grantors.Succession agreements are expressively prohibited under the Spanish Civil Code, however, there are very few exceptions in which they can be used. The Succession agreements are valid and enforceable in some areas of Spain such as Catalonia.

Autonomous communities

Spain was formed from the union of various small kingdoms, and its traditional laws have been respected within the single state. These are now known as autonomous communities (comunidades autónomas). These communities are part of a single nation, with a system of inter-regional law. They have certain legislative powers to set up their own rates of inheritance tax and the shares of statutory legacies.

Apostille of The Hague

This applies to public documents which have been executed in the territory of the states’ signatories to the Convention of The Hague of 5 October 1961. Legalisation with the Apostille means the formality by which the appointed authority under the convention certifies the authenticity of the signature, the capacity in which the person signing the document has acted and, where appropriate, the identity of the seal or stamp which it bears by affixing the Apostille, so it may be recognised in any other contracting state.

B

Barrister and solicitor (abogado)

Spanish lawyers are known as abogados (the legal profession in Spain is not divided between barristers and solicitors). Litigants are guided by abogados, who are legally permitted to exercise their profession in the courts and tribunals which hear cases. Spanish abogados are not officers of the court, and their duty is to the client. Correspondence between abogados is privileged. They are not required to keep separate office and client accounts or follow rules in the handling of clients’ monies or submit audited accounts to the Spanish Law Society (see ‘Law Society’ below). Unilateral promises given by a Spanish abogado to do or not to do something are not binding, unlike the undertakings given by solicitors in England and Wales.

Benefit of inventory (beneficio de inventario)

It is the right of this individual to accept the inheritance, subject to an inventory of the deceased’s estate being made in the presence of a notary and representatives of the creditors of the estate. The acceptance is limited to any surplus that may be left, so that the beneficiary does not accept the liabilities or debts of the estate.

C

Central wills registry

Every will has a certification number in Spain, which is kept on file at the Central Register of Spanish wills, located in Madrid. There is no equivalent in England and Wales.

Charities

Gifts to charities, such as institutions of welfare, education or religion, are exempt from death duties. However, before a client makes a decision in this respect when preparing a will, a lawyer should generally be consulted to check that the institution in question falls within the exemption contemplated by the law.

Civil partnership

Same-sex couples’ rights and responsibilities are identical to civil marriage in Spain and are fully recognised under the same name as heterosexual couples – that is, “marriage”. Such partnerships give the same succession rights as heterosexual marriages. Some regions have also regulated cohabiting couples as simulating the succession rights to those of matrimony

Civil residence (vecindad civil)

This is the closest concept existing in Spain to that of domicile in England and Wales, and is different from that of residency (see ‘Habitual residency’ below). A set of local rules will be applicable to a person, subject to certain conditions being complied with. According to the Spanish Civil Code there are several ways to gain the vecindad civil.

Clawback

Only persons entitled to a forced share or to a proportional share in the estate, and their heirs or successors, are entitled to request the reduction of gifts made during the lifetime of the deceased. They are not allowed to waive their rights during the life of the donor, by express statement or by giving their consent to the gift. Neither donees, legatees of anything other than a proportional share in the estate, or the deceased’s creditors may request the reduction or benefit from it. This applies equally to testate and intestate successions.

Codicil

Wills may be amended by codicils. A codicil must be executed in the same manner as a will. The term is the same in England and Spain.

Common Reporting Standard (CRS)

has been in place since January 2016. All banking and financial institutions are obliged to disclose a client’s necessary tax information to the tax authorities. The first exchange of information was scheduled for January 2017. This could have a negative impact on those British nationals who are tax residents in Spain and have not previously disclosed their foreign assets by virtue of the 720 form. It is strongly recommended that you check that those clients already resident in Spain, and those who are planning to move there on a permanent basis, are in compliance with the tax legislation in place.

Court of Protection

There is no equivalent in Spain. All issues referring to mental capacity are decided by the ordinary courts of first instance.

D

Death registry

The Spanish equivalent is the above mentioned registro civil. This fulfils the same objective as the General Register Office in England and Wales.

Deed of declaration of inheritance

There is no equivalent of this concept in England and Wales. It is a formal declaration of the deceased’s death and disclosure of their estate, to be prepared and signed by the beneficiaries and the appointed executors. The deed states the capacity in which the parties are acting, such as beneficiaries, executors or attorneys for the beneficiaries or executors; it recites the facts relating to the deceased’s death and their succession through the testamentary dispositions made by them; and in addition, it will contain a full inventory of the assets which form the estate, disclosing the value for inheritance tax purposes. In the case of immovable property, the deed will contain a full description of the property as it appears in the title documents, and will incorporate full details of its registration. The liabilities of the estate for which a tax deduction is claimed have to be equally detailed in this deed.

At the end of the document, the distribution of the deceased’s estate among the beneficiaries in accordance with the terms of the will is detailed. The beneficiaries may formally accept the inheritance and, in the case of immovable property, will apply to the land registrar for the registration of the property in their name or names.

Domicile

The concept of domicile, as understood under English law, does not exist in Spain. Indeed, in the most instances where reference is made to a person as domiciled in Spain, it is understood under Spanish law that the person is resident in Spain. The vague and ambiguous concept of domicile under English law makes it possible for a person to acquire Spanish domicile under English law without becoming a resident in Spain under Spanish law.

E

Evidence of foreign law

A will executed by the deceased in English form is fully valid and recognised in Spain, and therefore valid in Spain as to its form and contents. In order to prove the validity of English will, an affidavit of law (also known as certificate of law) must be issued, reciting that the will in question has been executed in accordance with the formalities required by English law.

European Succession Certificate, instrument that allows beneficiaries, legatees, executors of wills and administrators of the estate to prove their status and exercise their rights in other EU countries

F

Foreign wills

Article 9 of the Spanish Civil Code refers all matters relating to the succession of a person to the national law of that person, and expressly admits the validity of testamentary dispositions executed in accordance with the national law of the testator. Consequently, contrary to general belief, the mere fact of owning property within Spanish territory does not create the necessity of having a separate will in Spanish form dealing with that particular property; the will executed according to the national law of the testator is valid in Spain and fully effective to dispose of the property according to the wishes of the testator.

G

Gift inter vivos

Gifts made to children, which are not betterments, shall be attributed to their forced share. Gifts made to non-family members shall be attributed to the part of the estate of which the testator would have been freely able to dispose by testamentary disposition.

H

Habitual residency

This is the place where a person has set up the permanent or habitual centre of their interests, with the intention of making it permanent. For fiscal purposes, the position differs, in the sense that a person who is not resident in Spain might become resident in Spain for tax purposes if they spend more than 183 days in Spain during one calendar year. The consequences of a person becoming resident in Spain for tax purposes can be serious as far as death duties are concerned, as Spanish law will tax the estate worldwide.

Habitual Residence EU Succession Regulation: The default connecting factor in private international law habitual residence. So, by default, the competent court and the applicable law will be those of the habitual residence of the deceased. However, this represents a fundamental change for Spaniards, as up to now the law of their nationality was the only law which would govern their succession. The concept of habitual residence is not defined in Brussels IV, which may imply that a significant number of English nationals who for no professional or economic reasons live between Spain and England for several months without settling permanently in either country, may have difficulty in determining where they are habitually resident. In such cases, it will be necessary to look at where the centre of interest of the deceased’s family and social life was located. Failing this, the fact that the deceased was an English national or the location of all their assets was in Spain could be a special factor in the overall assessment of all the factual circumstances. Of course, there will be cases in which the final decision, if contested, will be left at the discretion of the judge: for example, an Englishman with dual Spanish and English nationality and property in both countries and who had lived in each country for six months of the year.There are matters excluded from the scope of Brussels IV, but upon which the regulation may still impact. For example, Brussels IV countries can still apply their own taxation rules, but the choice of law of the deceased may have indirect consequences on taxation. Spanish law may be applicable to an English national habitually resident in Spain, which implies that statutory legacies will be taxed differently than if the state was subject to UK law. Equally, tax will be payable by the beneficiaries and not the state, because in Spain it is not compulsory to appoint an executor and, more often than not, beneficiaries inherit directly and are always responsible for the payment of their own taxes.

I

Inheritance tax

The Spanish central administration passed the collection of this tax to the autonomous communities (see above) into which Spain is divided, so the rates of tax and allowances vary between autonomous communities. To claim the application of a particular community rate of tax, the deceased must have resided in that community for at least five years prior to their death or by reason of the situation of the assets in question.  In the case of a person who is non-resident in Spain, the Spanish tax authorities can only claim the payment of Spanish inheritance tax in respect of the deceased’s assets situated in Spain, provided that the deceased’s beneficiaries are not resident in Spain either. If the beneficiaries are Spanish residents, then Spanish inheritance tax is due in Spain on the whole of the deceased’s estate on a worldwide basis.

There has been a recent ruling from the European Court of Justice ordering that the Spanish authorities cannot charge different rates of inheritance tax for residents and non-residents. Since August 2014 non-residents benefit from the same fiscal treatment as residents for inheritance and gift tax purposes.

Intestacy rules

There is a Spanish equivalent – the statutory legacies. The main difference is that these cannot be dismissed by will.

Inventory

There is a Spanish equivalent – inventario. This includes a full list of the assets and obligations of the deceased. This is very important to help the heirs to decide whether or not to accept the estate.

J

Joint tenancy

There is no equivalent in Spain; property can only be acquired in Spain as co-owners. On the death of one co –owner, the share does not accrue automatically to the survivor (see ‘Tenancy-in-common’ below).

L

Land Registry

All titles relating to property in Spain are registered at the Spanish land registry. It is therefore possible to search at the land registry to disclose any property owned by the deceased.

Lasting powers of attorney

There is no equivalent in Spain; a Spanish lawyer or other individual cannot be appointed to make decisions on a person’s behalf, when that person lacks the mental capacity to do so. This can only be achieved by making the necessary application to the court, which will determine who will be appointed to make such decisions.

There is no equivalent to the Office of the Public Guardian where you can register a power of attorney. In order to enforce an English lasting power of attorney in Spain, advice from a Spanish lawyer will be required.

Law Society

The Spanish equivalent is the Colegio de Abogados. There is no equivalent to the Solicitors Regulation Authority in Spain. The Spanish law societies deal with all complaints regarding lawyers, and are also in charge of safeguarding the rights and professional interests of lawyers, permanent vocational training of lawyers, and deontological supervision. They also provide medical and professional insurance to members at a very low cost.

Letters of administration

There is no equivalent in Spain, as inheritance and distribution of the estate are achieved by the beneficiaries appearing before a notary public with no court intervention. The courts will only intervene in the event of disagreement between the beneficiaries. There is no designated probate division in the Spanish courts system, and there is no procedure that specifically corresponds with probate or grant administration.

M

Matrimonial regime

This is a set of mandatory rules which apply automatically to all married couples in Spain and outline their minimum duties and rights in respect of the managing of assets and the administration of their estate. There is no equivalent in England and Wales. When dealing with the estate of a deceased who was married, it will, under the economic regime of community of assets, be necessary prior to winding-up the estate to dissolve the matrimonial economic regime, allocating the share of the matrimonial assets to the surviving spouse.

P

Procurator (procurador)

This is the legal professional in charge of submitting the documents made by the lawyer to the courts. In addition to this, this individual also notifies the parties as to the development of the proceedings. The procurator is the person through which the parties must appear before the court; the role operates like a paperwork officer between the court and the Spanish lawyer.

Power of attorney for inheritance

This is a notarial deed granted in favour of a lawyer or any other third party to act on behalf of the beneficiary or executor at the signature of the deed of declaration of inheritance, or to generally deal with the winding-up of the estate.

R

Regional statute (derecho foral)

This is the civil law existing in some regions, different to the state civil law and law and which relates to family, probate and property matters. There is no equivalent in England and Wales.

Remission or renvoi is a PIL concept when a court must decide which jurisdiction’s laws apply in a cross-border matter. For English nationals owning property in Spain, it is vital that they make an express choice of English law in their will to ensure that Spanish law does not apply by default. This is because Brussels IV prohibits renvoi when English law has been specifically chosen by the deceased, as this will imply overriding the express choice made by the deceased in their will.

Revocation of the will

The provisions made in a will can be revoked even when the testator had previously declared his intention of not revoking these.

A will is automatically revoked by the execution of a new will. It can also be revoked when the testator declares before a notary his intention to cancel or keep any of the provisions of the will.

Divorce does not automatically revoke or affect the validity of a previous will. However, the divorced spouse will not inherit unless the will stipulates otherwise.

S

Spanish notary (notario)

Notarios are legal professionals and public servants at the same time. In their latter role, they authorise public documents, acts, wills and legislations. Their intervention in public documents is essential, as wills cannot be registered at the wills registry in Madrid unless signed before a notary public. Beneficiaries cannot register property under their name unless the deed of declaration of inheritance has been signed before a notary public. Also, as depositaries of public trust, public records are based on what the notary sees, hears or perceives through their senses, giving rise to the corresponding acts being drawn up which may be of notification and calling for presence (summons), or deposit of goods or money before a notary. Notaries are obliged to keep a protocol containing the original of the deed signed, and they will produce copies at the request of those who granted the deed or to the beneficiaries of the deceased.

Solicitors Accounts Rules

There is no equivalent under Spanish law, and very few of the 84 existing local law societies require clients’ money to be placed in a different account to that of the office.

Statutory legacies

The Spanish rules provide for certain portions of an estate to be compulsorily left to members of the family. Failure to comply with these rules may render a will void, or may give rise to a claim being made against the estate by a “forced heir”. The concept of “forced heirs”, as enshrined in Spanish legislation, may be imposed upon the devolution of the Spanish estate of British nationals.

The following persons are forced heirs:

1. Children and descendants in respect of their parents and ascendants;

2. in the absence of the foregoing, the parents and ascendants in respect of their children and descendants; and

3. the widower or widow, in the manner and to the extent set forth in the Spanish Civil Code.

Two-thirds of the estate of the father and mother constitute the forced share corresponding to children and descendants. However, the parents may dispose of one of the two-thirds which form the forced share, to apply it as betterment in favor of their children or descendants. The remaining third shall be freely disposed of.

T

Tenancy-in-common

All co-ownership under Spanish law is held under tenancy-in-common, so the deceased’s share of the co-owned property will be part of their estate and will pass in accordance with the terms of their will or intestacy.

Taxable rate

The rate of tax applicable depends on the value of the estate and the degree of kinship between the beneficiary and the deceased.

Trust

The concept of a trust as understood under English law does not exist in Spain. Spanish law does not permit a trust to be created by will. Under Spanish law, it is simply a fiduciary relationship between various parties, which is not properly regulated. Spanish law will regard the trustees as both beneficial and legal owners of the property, and an attempt to create a trust may bring serious consequences as far as death duties are concerned if the deceased and trustees are not related in blood.

U

Unity of succession

Thishas been adopted as a fundamental principle within the Spanish legal system, so the Supreme Court has clearly established that only one law will be applicable to real and immoveable property of the state of an English national.

V

Voluntary Jurisdiction Act

(15/2015 Act of 2nd July) (VJA) The Act aims to simplify and update procedures in matters where there is no dispute, but the intervention of a member of the judiciary is needed. Matters of voluntary jurisdiction can now be dealt by notaries and registrars, rather than the judiciary. Spanish notaries are legal professionals and public servants. In this latter role, they authorise public documents, acts, wills etc. Only documents executed before a notary public can be accepted by a registry in Spain. Wills, deeds of charge, conveyancing, acceptance of inheritance and other documents are drawn up by the notary public in a specific format in which the notary public declares what is happening before them. Their role in the execution of wills is central, as they witness the date of signature, the content, testator’s signature, their capacity etc. As public records are based on what the notary sees, hears or perceives, the validity and veracity of acts recorded by the notary public is extremely difficult to challenge before a Spanish court. Notaries, registrars and court clerks are now entrusted by the VJA with new areas of work where their technical experience is necessary. Notaries now deal with the solemnisation of marriages, separations or divorces when there is mutual consent, no offspring and non-contested monetary claims. Court clerks will deal with the appointment of the Spanish equivalent of the executor (albacea contador partidor), mutual consent divorces and segregation of unregistered land, amongst other things. It is hoped that allowing notaries to authorise intestate successions in non-contentious probate matters will considerably speed up the winding up of estates in Spain

Wills

Four types of wills are valid in Spain: the holographic will; open will; closed will; and mutual will. These are outlined below.

Holographic will

Anyone who had come of age can make this type of will. It shall be written entirely in the handwriting of the testator, and shall be dated and signed by the testator. It must be proved as genuine before a judge. It is required that the handwriting of the deceased be authenticated by witnesses, who must be the deceased’s closest relatives. Once it is proved, the judge will enforce the will’s contents. The estate shall be distributed in accordance with the provisions of the will.

 

Open will

This is the usual form of will for most people in Spain. It is made beforeanotary, who shall keep the original document in their files. The notary will send a notification of the will to the central register of wills kept by the Ministry of Justice in Madrid. The notary may request the presence of two witnesses, who can also be required in case the testator is blind or illiterate. A minor, a person who is blind, deaf or dumb, or the spouse and closer relatives of the testator cannot act as witnesses.

 

Closed will

This is a form of will designed to keep secret its provisions, by putting the documents inanenvelope. The testator shall declare before the notary that their provisions are contained in the envelope, and declare whether they have written them by themselves or whether the will has been written by a third person. The testator must also declare whether they have signed it or it has been signed by a third person for the testator. Thenotarythen seals the envelope and signs it, then files it and send a notification of the will to the central wills register. This will cannot be made by either blind or illiterate person.

Mutual wills

This concept arises when two or more testators agree either to grant reciprocal benefits to each other, or to grant benefits to the same beneficiaries. An express agreement between all the testators is required for a mutual will to be authorised.

Alberto Pérez Cedillo practices in London, where he opened his own practice in Lincoln’s Inn in 2005. He has now offices in Madrid and Marbella. Alberto is also the chairman of the Spanish Branch of STEP and a Vice-Chair of the Private Client Section of the Law Society of England and Wales.

Succession Law Glossaries

We will be posting a series of glossaries directed mainly to legal advisors dealing with deceased estates with property situated in some European countries, or where those regulations apply.

The glossary lists some of the main legal terminology on the subject, translated into English from different European languages.  However, readers will be aware that the legal meaning and effect of certain translated terms will not be identical to their meaning under Common Law.

Please note that specific legal advice will be required at all times and this glossary is intended to be a guideline only.