Spain Administrator or executor ( albacea Autonomous communities Apostille of The Hague Barrister and solicitor ( abogado

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1 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. 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 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.

2 Brussels IV The Regulation (EU) 650/2012 was ratified by Spain and as a consequence the habitual residence may also be taken into account by the testator/testatrix in order to decide which law will rule his/her succession. Nationality therefore will stop being the only reference under Spanish law to determine the law applicable. 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. Certificate of succession This document is introduced by Regulation (EU) 650/2012 also known as Brussels IV and will enable a beneficiary, administrator or executor of an estate to be recognised throughout EU members who have not opted out of the Regulation. 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. Court of Protection There is no equivalent in Spain. All issues referring to mental capacity are decided by the ordinary courts of first instance.

3 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. 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. It is, however, advisable to have a separate will in Spanish form in order to minimise probate costs when the testator dies, and also because, in certain instances, the implementation of the will executed according to the national laws of the testator may cause both delays and additional tax liabilities in Spain.

4 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. I Inheritance tax The Spanish central administration has 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. Liability to the tax arises by reason of the residence of the beneficiary, 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. 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.

5 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.

6 Remission or renvoi Spanish law provides for all matters relating to the succession of a person to be governed by the national law of that person. By virtue of the reference made by Spanish law to English law, the rules of intestacy applicable to English nationals with a estate in Spain are the English succession rules. There is, however, some controversy. Under English international private law, the general rule is that the law of the place where the assets are located governs the succession of immovable property situated in a foreign country. The problem is therefore one of renvoi (the term used under English international private law for the law of the place where the property is situated). Current Spanish law will accept the renvoi made by the international law of a foreign country, provided this renvoi is made to the Spanish law and only to Spanish law. It is therefore clear that the paramount consideration of the Spanish legislator is the application of the national law of the deceased which, in this case, is English law, on the assumption that the deceased was a British national mostly connected with England. Consequently, the law of the place where the assets are situated in this case, Spain applies, and since Spain accepts this renvoi on the part of Spanish law, the whole issue is remitted back to the national law of the deceased that is, English law. The question of the potential existence of compulsory heirs in respect of an English national leaving estate in Spain should only be considered when the English national died leaving no estate in England. In support of this argument, Spanish law regards the estate of a person as one and universal, in accordance with the principle of universality, and it would be contrary to this principle to have compulsory heirs with regard to that part of that estate which is situated in Spain, but not with regard to the rest of the estate. Spanish law has a very strong concept of the unity and universality of the estate of a person, so again, it would seem that it is not possible to have different systems of law applicable to the same estate. The application of one system to govern the devolution of movable property and another for immovable property is contrary to this basic principle of universality and unity. 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) Notatios 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 registered 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.

7 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 coowned 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 This has 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.

8 W 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 before a notary, 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 in an envelope. 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. The notary then 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 persons. 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 Perez Cedillo Spanish Lawyers & Solicitors. Offices in London and in Madrid. LONDON MADRID 1 New Square, Lincoln s Inn, Paseo de la Castellana n.166 London WC2A 3SA Esc 1-1o izq Madrid T: +44 (0) E: cedillo@apcedillo.com F: +44 (0) T: (+34) E: cedillo@apcedillo.com E: apcmadrid@apcedillo.com website: