Don't let your inheritors get caught out

Inheritance Wednesday, February 21, 2018
Don't let your inheritors get caught out

When a loved one dies that last thing you want is to struggle settling inheritance issues. Unfortunately, in Spain, the differences in procedures and laws can mean that inheritors have difficulty in managing the inheritance process.

One of the surprises that foreigners with property here encounter is when it comes to selling the property. Unlike some other countries, the property does not automatically change hands. Names have to be changed at the Land Registry and this can only happen when debts have been settled and inheritance tax paid.

Only once the names have been changed on the Title Deed can the inheritor take possession of the property. This means that they cannot pay inheritance tax, for example, from the proceeds if they are intending to sell. The inheritance deed has to be signed before the Notary and needs registering in the Land Registry before the sale can go through. Only at this point does the inheritor own the property.

This can cause difficulties where inheritors are under the impression that they automatically inherit the property and can sell it on when they wish. The same applies if there are two owners or more. If one person dies then their share of the property must be transferred correctly and the title deed changed.

At Ábaco Advisers we have seen the problems that this can cause families. It is very important that if you are intending to bequeath property here in Spain that you are clear about what the implications are for those who will inherit from you. They will also need to understand what the procedure is and if there will be any money to pay prior to the transfer taking place.

These can be difficult conversations to hold. However, making sure that your loved ones know what to expect and are prepared will give you very valuable peace of mind too.

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