Posted in: Deeds Issues, Family Law
When someone dies owning property or money in Spain, their family naturally thinks about what they are going to inherit.
But there is another important question:
An inheritance is not simply about the assets. The liabilities of the deceased also need to be considered.
If the deceased owned a Spanish property with a mortgage, the mortgage does not simply disappear when they die. The estate needs to be dealt with as part of the inheritance process.
The family should establish:
The exact position will depend upon the circumstances.
This is particularly important for owners of Spanish property.
There may be outstanding property-related taxes or charges, including IBI or amounts due to Suma, depending upon where the property is situated. These should not simply be ignored because the owner has died. These debts in Spain go against the property, not against the person.
When dealing with a Spanish inheritance, we need to establish the assets and liabilities of the deceased and advise what needs to be paid and by whom.
If the deceased owned an apartment or property within a community of owners, there may also be unpaid community fees. Again, the death of the owner does not necessarily make these liabilities disappear. The family should find out whether anything is outstanding before completing the inheritance.
This is where things can become complicated. Before accepting an inheritance, the heirs should understand what they are inheriting and what liabilities may be involved.
There are different legal ways of dealing with an inheritance, and it is important not to make assumptions before obtaining advice. This is especially important if the deceased had significant debts or if the family does not know the full financial position.
It is not possible in Spain to look up all the bank accounts and any debts that someone may have, unless they have been through a collection process and are now registered with an embargo against assets such as the property. Therefore the family need to investigate what they can, and we will also help all we can.
The same principle applies. There may be personal loans, credit cards, overdrafts or other financial liabilities.
What if the debts are greater than the assets?
This is one of the reasons why professional advice is important. Imagine that someone dies leaving:
Spanish property: €150,000
Bank account: €10,000
Outstanding debts: €100,000
The family should not simply assume that they can take the property and deal with the debts later. The inheritance needs to be properly assessed and the appropriate legal procedure followed with proper advice.
As we all know, there can also be expenses associated with the death. The treatment of expenses for Spanish inheritance tax purposes can be different from other expenses and for example sometimes banks allow payment of this. However we should be contacted before the banks.
When somebody dies with assets in Spain, do not look only at what they owned.
Make a list of:
Try to find all documents and information before approaching us. We will then guide on what else may be needed, on the inheritance and the liabilities before the heirs decide how to proceed.
An inheritance can sometimes be straightforward, but if there are significant debts, it is particularly important to obtain legal advice before accepting the inheritance,
Every inheritance is different and the correct procedure will depend upon the circumstances of the deceased and the heirs.