International Estate Planning for Expats in Spain: Choosing the Right Law for Your Succession

Why International Estate Planning Matters for Expats in Spain

Spain has a relatively generous succession tax (Impuesto sobre Sucesiones y Donaciones, "ISD") framework in many regions, but the civil law rules governing who inherits and how much freedom you have to leave your estate are equally important — and often misunderstood by foreign nationals living in Spain.

Spain's civil code imposes strict forced heirship rules (legítimas) that limit testamentary freedom. These rules reserve a fixed portion of the estate for the testator's descendants and, in some cases, surviving spouses. For a foreign national who wishes to leave everything to their children while providing differently for a spouse, or who wishes to disinherit a child for any reason, Spanish forced heirship can be a significant obstacle.

Fortunately, the EU Succession Regulation (Regulation 650/2012, "Brussels IV") gives qualifying individuals the right to choose the law of their nationality to govern their succession — a right known as professio iuris. Understanding and using this right is a central pillar of effective estate planning for non-Spanish nationals living in Spain.

The Default Rule: Habitual Residence

Under Brussels IV, the default rule is that the succession of a deceased person is governed by the law of their last habitual residence. For an expat who has lived in Spain for many years, this will normally mean Spanish law applies to their entire estate — regardless of where the assets are located.

For individuals from countries with more flexible succession laws — many Northern European countries, including the Netherlands, do not have forced heirship rules of the same rigidity as Spain's — this default can frustrate their wishes. A Dutch national living in Spain who wants to leave everything to their children could find that Spanish law restricts this if there is a surviving spouse.

The solution is the professio iuris: an explicit election in the last will and testament to apply the law of your nationality instead of the law of your habitual residence.

Case Study: The Dutch Entrepreneur in Spain

Consider a hypothetical scenario representative of cases our team advises on:

A Dutch national ("R"), married to a Spanish citizen, relocates to Madrid with a substantial estate spread across multiple jurisdictions. R's assets include real estate in the Netherlands, shares in Dutch and Scottish companies, bank accounts in Switzerland, and movable assets in Spain. He has one minor child. R's wish is to leave his entire estate to his child.

Under Spanish law — which would apply by default as the law of his habitual residence — R's testamentary freedom is limited. Spanish forced heirship rules provide that:

• Legítima estricta: one-third of the estate must be divided equally among the forced heirs (here, his child as the only descendant).
• Legítima larga: another third must go to the forced heirs but can be distributed unequally (since R has one child, this third also goes entirely to the child).
• Tercio de libre disposición: only the remaining third is freely disposable.
• The surviving spouse is entitled to the right of use (usufructo) over the legítima larga — meaning R's wife would have a lifetime right of use over one-third of his estate, even if R leaves everything to his son.

This is not consistent with R's wishes. Under Dutch law — which R can elect — there are no equivalent forced heirship restrictions favouring a surviving spouse in the same way. R could freely leave his entire estate to his child.

Our advice would be to include a professio iuris clause in the will, expressly choosing Dutch law as the law governing the succession pursuant to the EU Succession Regulation. This election must be made in the will itself and complies fully with Brussels IV.

One Will or Several? The Multi-Jurisdiction Challenge

A further complexity arises when the testator holds assets in both civil law and common law jurisdictions.

In the example above, R holds shares in a Scottish company. While a Spanish will granting the universal estate to his child under Dutch law works well for assets in civil law countries (Spain, Netherlands, Switzerland), it may encounter practical problems in Scotland, which operates a common law system.

Two practical issues arise for assets in common law jurisdictions:

• Administration: The administration of an estate in a common law country is governed by the law of that country. A civil law will, even if valid, may require a Grant of Probate or equivalent local procedure — a process that may be lengthy and costly without a local will.
• Protection of minors: In Scotland, minors do not acquire direct ownership of inherited assets until they reach majority. Special protective structures apply under Scottish law. A universal will based on civil law concepts may not address these protections adequately.

Our recommendation in such cases is typically to grant two coordinated wills:

• A universal will — granted before a Spanish Notary, covering all assets except those in common law jurisdictions — expressly applying Dutch law via professio iuris;
• A territorial will for the UK/Scottish assets — granted in Scotland by a Scottish solicitor — covering those specific assets under Scottish law.

Both wills include a territorial scope clause and a choice of law clause to ensure they work in coordination and do not inadvertently revoke each other.

Succession Tax (ISD): A Separate Issue

It is important to distinguish between the private international law question (which country's succession rules govern your estate) and the tax law question (which country taxes the inheritance).

Brussels IV only determines the applicable succession law. Spanish Impuesto sobre Sucesiones y Donaciones will still apply if:

• The beneficiaries are resident in Spain; or
• The assets are located in Spain (for non-residents).

This means that even if Dutch law governs the succession, Spanish ISD may still be due on Spanish assets or on inheritances received by Spain-resident beneficiaries. Effective estate planning must address both the legal and the tax dimension.

Regional bonuses (bonificaciones) under ISD vary dramatically — from near-zero in Madrid and Andalucía to significant amounts in Catalonia and other regions. The region of the deceased's habitual residence (for residents) or the location of assets (for non-residents) determines which regional rules apply.

Powers of Attorney: Planning for Incapacity

A final element of international estate planning that is often overlooked is the lasting power of attorney (poder notarial). For individuals with assets in multiple countries, a single general power of attorney granted before a Spanish Notary may not be recognised in all jurisdictions — particularly in common law countries — or may not be sufficient for all types of transactions.

Best practice is to grant jurisdiction-specific powers of attorney in each country where significant assets are held, ensuring that a trusted person can manage your affairs in the event of incapacity. These should be coordinated with the wills to avoid conflicts.

For expert advice on estate planning, Spanish succession tax, and cross-border wills, visit internationaltaxlegalspain.com.