Here’s how it works …
When you die, your assets are divided into thirds.
- One-third goes to the kids. Each one gets an equal share.
- Another third also goes to the children, but you get to decide how much you leave to each one. However, a surviving spouse gets dibs on this third while they are alive.
- The last third of your assets is yours to give away as you please.
- If parents survive their children, the resulting pie chart of shares is incomprehensible.
If your assets consist of cash and shares, it’s easy enough to divvy them up. However, as most people in Spain invest in property, dying almost always causes problems.
For example, what if granny won’t move out of a big house even if the grandkids want to go to university and their parents can’t afford it? And does anyone have the contact detail for that long-lost brother in Venezuela?
Fortunately, foreign residents can avoid the whole issue.
The benefits of dying as a foreigner in Spain
The Ley de Herederos Forzosos applies to Spanish nationals and foreign residents. However, guiris can avoid it by making a Spanish will that specifies that they want their estate to be governed by their home country’s rules.
This is why it’s now essential to make a will if you are resident in Spain and don’t want the Spanish state to decide what you can do with two-thirds of your estate.
NOTE: The law changed in 2015 so you now have to specify that you want your home country’s rules to apply to your estate. Prior to 2015, it was automatic.
A Spanish will is essential for most Gran Canaria residents
If you’re here as a teacher, rent a flat and spend all your spare money on rum, you don’t need a will. But as soon as you buy a property, get married or breed, you do.
Buy you can’t just scribble down a few instructions and then forget about it; Spanish will-making is as complex as you’d expect.
To start with, there are three types of will.
The three types of Spanish will
- Testamento abierto: An open will and the most common type. It must be drawn up by a lawyer or notary, witnessed, and a copy registered with the central repository of wills in Madrid.
- Testamento cerrado: A secret will that is registered by a notary but remains sealed. This kind of will is popular with pirates and vindictive pensioners.
- Testamento ólografo: A verbal or handwritten will. Verbal wills must be witnessed by at least five people (only three during an epidemic) who then have to tell a notary what you said after you die (and agree with each other). A handwritten will is much simpler as it doesn’t need witnesses or a notary. Once you die, however, a handwritten will has to be verified and this can take time.
Make a will in Gran Canaria: Just go to a lawyer or notary
As you may have gathered, it’s best to get decent advice before you die and blight your family’s life for a generation. The easiest way is to go to a Spanish lawyer in Spain (one who speaks your language) and get them to draw up a testamento abierto or testamento ólografo (which you need to write out by hand; isn’t this fun).
A basic open will doesn’t cost more than 50 euros to get signed, stamped and registered at a notary in Gran Canaria.
Tips on dying neatly in Spain
Consider funeral insurance, which means that someone else deals with the paperwork and haggles with predatory funeral providers on your family’s behalf.
Have a separate will if you own property or assets outside Spain. For example, if you own a British property, it’s best to have a British will that covers it.
Don’t nominate an executor in your Spanish will unless you are advised to by a lawyer. In many cases it confuses things and makes the whole process far more expensive.
Inheritance tax in Gran Canaria
Here’s some good news; the direct families of most Gran Canaria residents and even non-resident property owners in the Canary Islands get a rebate of 99.9% of the inheritance tax due. This applies to EU and EEA citizens (and Brits for now). See this detailed article for more details.
This exemption became law in 2016 for two reasons…
Other areas of Spain offered the rebate and lots of Spanish people and wily foreigners were moving their money to more generous autonomias to avoid paying inheritance tax.
Inheritance tax in Spain must be paid before the assets are released and many people simply couldn’t afford to inherit.
So, in summary, you will make a will in Gran Canaria, won’t you? Yes, you WILL!