Receiving an inheritance is already a complicated path both emotionally and bureaucratically, but if to this we add living in a foreign country, hundreds of miles away and under the protection of different laws, the process becomes increasingly difficult for those beneficiaries who do not understand how to proceed.
Inheriting in the United States is not the same as inheriting in Spain, and this becomes a new challenge that adds to the bureaucratic limits faced by a foreigner in a new country from scratch. It is here, in these moments of uncertainty, when it becomes necessary to count on a professional who knows the process and can lend you a hand.
So, what are the first steps to receive a Spanish inheritance in the United States? What are the rules you must follow to get your hands on this heritage? I will tell you everything you need to know.
What happens if I receive an inheritance and I am in the United States?
The first thing you must know in order to receive a Spanish inheritance in the United States is that the inheritance law is different in both countries. While in the resident country they have “Will Substitutes” or “will substitutes” during Probate (insurance policies, payable-on-death accounts (POD), transfer-on-death accounts (TOD) and others), which allow the deceased person to decide the destiny of his estate during his lifetime, without having to respect any legitimate, in Spain we have another much stricter legislation that is governed around the will and the legitimate that must be respected.
If the person making the will resides in Spain, the will must be made in accordance with Spanish law and the provisions of the Spanish Civil Code must be followed. If the person resides in the United States, it will follow the American law and will not have to respect the legitimate rights.
In order for you to access the inheritance and dispose of the assets located in Spain, you will have to gather the necessary documentation (such as your DNI or NIE and that of the rest of the heirs, the death certificate, the last will and life insurance certificate, the bank balance certificate and the Simple Notes from the Land Registry), make the partition limited to the assets located in Spain and pay the Inheritance Tax as a Non-Resident.
Once you gather all the documentation, you must go to the Notary and make the partition to make it public, unless there is only one heir. If the interested party cannot attend because he/she is abroad, a power of attorney can be given to a trusted person.
What if there is no will and a close relative dies?
If the person who has died lives in Spain and has not made a will, a declaration of heirs must be made, in which the persons who have the right to inherit will be indicated. For this declaration of heirs, the presence of two witnesses who knew the deceased is required. If the deceased person resided in the United States and had drafted a document in which he/she had designated the heirs, it could be valid in Spain but it would have to be validated. If the deceased person in the United States had not drafted any document, then the declaration of heirs would have to be made at the Spanish Consulate.
How to reduce the Inheritance Tax in the United States?
A question that is commonly discussed in law firms is how to pay or avoid Inheritance and Gift Tax if you live in a foreign country, and it is a process that will depend on different factors. For some time now, Spanish courts have ruled that residents in the United States can benefit from the allowances established in the Spanish legislation. It all depends on the Autonomous Community where the assets of the inheritance are located. For example, if a resident of the United States inherits an apartment located in Madrid, a 99% tax credit could be applied.
In any case, it is necessary to review on a case-by-case basis. Therefore, it is important to have a specialized lawyer to guide you through the process and explain what kind of documents you must present and what taxes you must pay. In these cases, as it has been mentioned before, it will depend on different factors.
What if I have paid any taxes in the United States equivalent to the Spanish Inheritance Tax on assets acquired in Spain?
In this case and in order to avoid double taxation, the tax paid in the United States could be deducted from the Spanish Inheritance Tax.
Martínez Lafuente Abogados, the legal support you need to inherit from abroad
If you find yourself in a vulnerable situation or if you do not know which is the next step in order to receive a Spanish inheritance while living in the United States, do not worry.
At Martínez Lafuente Abogados we have been handling inheritance processes for hundreds of clients for more than 25 years. Do you need help? Contact us and we will advise you individually about your case.