* INTRODUCTION.- EU Regulation No. 650/2012 of the 4th July 2012 concerning Jurisdiction, Applicable Law, Enforcement of Resolutions, Acceptance of Public Instruments in relation to Mortis Causa Inheritances and the Creation of a European Inheritance Certificate will be applicable as from 17th August 2015. It includes fundamental changes, among which is the law applicable to inheritances by reason of death, particularly in transnational situations, be it in relation to the place where the estate is located, the nationality of the Deceased, special bonds with a specific State or, especially, the “Place of Residence of the Deceased”, which in our view is one of the most important changes.
It must also be noted that the aforementioned Regulation is directly applicable in the Member States (without prejudice to any safeguard clause) and, therefore, its provisions do not need to be implemented into their National Legislations as is the case with Directives.
Until we reach the date of its coming into force, however, it is of utmost interest to know the law currently applicable to transnational situations involving this matter and, as a frequent example in Spain, the case of British citizens, whether resident in Great Britain or in Spain, who own property in Spain, particularly immovable property.
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Owing to its relevance and clarity, and with its Author’s authorisation, below is a transcription of the legal grounds which, in summary form, are included in a Deed witnessed by the Notary of Madrid and Property Registrar on professional leave Mr José Manuel Hernández Antolín, although it must be noted that it refers to a specific case.
ON THE LAW APPLICABLE TO THE CASE. For a perfect understanding of this Deed, account must be taken of the LEGAL GROUNDS TAKEN INTO CONSIDERATION for execution hereof, based both on the legal texts mentioned below and on Case Law of Chamber No. 1 of the Supreme Court (Supreme Court Judgements dated 15th November 1996, 21st May 1999 and 23rd September 2002 among others) and the Resolutions issued by the Directorate General for Notaries and Public Registries on 1st March 2005, 22nd and 27th November 2006 and 24th October 2007:
1.- Inheritances, according to Spanish Law, shall be governed by the Personal Law of the Deceased at the time of their death (Article 9.8 of the Spanish Civil Code). The Deceased being British, this inheritance must be governed by British Law which I, the Notary, do hereby declare to be familiar with as far as relevant to the situation.
2.- The procedures and formalities of Wills shall be governed by the law of the country in which the Will is executed (Art. 11.1 of the Civil Code and Hague Convention of 5th October 1961, in force in Spain since 10th June 1988). Consequently, British Law shall apply in determining the validity of such Inheritance Instruments.
3.- The Universal Inheritance Principle is applicable in Spanish Law, no renvoi made by British Law being admitted except for renvoi to Spanish Law (12.2 Civil Code). Given that Spain has not as at the present date ratified the Hague Convention of 1989 on the Law Applicable to Inheritances by Reason of Death, which envisages the possibility of renvois or connections to other legislations, the provisions of British Law must be applied in any case by virtue of renvoi of Spanish Law to British Law as aforesaid (12.2 Civil code).
4.- The British Legal System is based on a dual principle which differentiates between movable property (governed by British Law) and immovable property (governed by “lex rei sitae”). There exists, in a technical sense, a return renvoi, which is valid insofar as it is Spanish Law that becomes applicable by reason thereof (Art. 12.2 Civil Code).
5.- In England there is absolute freedom in executing a Last Will, there being no statutory entitlement to a certain share of the estate or any restriction to such freedom, without prejudice to the possible application of the “Inheritance (Provision for Family and Dependants) Act 1975”, which lays down a sort of “Maintenance Right” in favour of persons with family ties to the Deceased and financially dependent on the latter. Consequently, even where the Spanish rule applies, there would be no limitation whatsoever by reason of statutory entitlements to a certain share of the estate which do not exist in Great Britain.
6.- The determining factor of the right to inheritance in English Law is the right to the net estate (right to a “quantum” of the assets), irrespective of whether it is assigned directly (by vesting ownership) or indirectly (the legatee is appointed beneficiary but a person or entity, called Executor of the Will or Trustee, in whom full authority to dispose is vested by the Deceased or by the Court hearing the case, is entrusted with the task of liquidating the estate and assigning the assets to the legatee).
In the British Legal System, the Executor of the Will is to such end considered a fiduciary legatee as from the death of the Deceased.
7.- Registration and general publicity of acquisitions by inheritance at the Land Registry shall be governed, where immovable property located in Spain is concerned, by Spanish Law (Art. 10.1 of the Civil Code).
*Introduction by Lizarza Abogados