Foreign residents in Spain should know that a new EU Regulation on inheritance has been approved as of the 4 of July 2012. The regulation will apply from the 17 of August 2015 and although, for the moment, the United Kingdom, Irland and Denmark have chosen not to take part, citizens from these countries living in Spanish territory could be affected.

The Regulation nº 650/2012 introduces several novelties that could be of interest to the different ex-pat communities.

For example, whereas current legislation would force a foreign resident´s inheritance to be treated according to the law of his or her nationality, the new EU Regulation would apply the law of the country of habitual residence (except when there is a manifestly stronger link with another country). However, it is worth noting that it shall also be possible to order expressly in a will that the person´s national law be applied instead.

This fact will have important ramifications due to differences between Spanish law and the inheritance laws of many of the countries to which the Regulation will be applied.

Most importantly, Spanish law places significant restrictions on the freedom to dispose of one´s possessions by will, as it forces the deceased to leave a full two thirds of his or her property to the children, leaving only one third to be disposed of as he or she sees fit.

It is for this reason that it is highly recommended that foreign residents make a will designating their national law, if they hope to have the same freedom to leave their assets to whomever they like that they would have in their home country. Good estate planning will allow the inheritance process to progress more smoothly, avoiding unnecessary costs and delays and minimizing the chances of a will being contested.

Similarly, the new Regulation allows the courts of the country of habitual residence to judge with regards to the inheritance, except when the parties concerned agree to that the courts of the country whose law has been chosen should be competent.

Article published by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal law firm.

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