Until August 2015, inheritances involving German nationals living in Spain were generally governed by German law. With the European succession law reform, which entered into force in August 2015, German nationals residing in Spain may now be subject to Spanish succession law unless they exercise the corresponding choice of law in their will.
Regulation (EU) No 650/2012 establishes both the principle of habitual residence and the possibility of choosing the applicable law in European succession matters. The Regulation applies to cross-border successions falling within its scope where the deceased died on or after 17 August 2015. Denmark and Ireland do not participate in the Regulation. A cross-border succession may arise, among other situations, where a person dies while habitually resident in a country other than that of his or her nationality.
Applicable law and choice of law
The principle of habitual residence established in Article 21 of the Regulation provides that, as a general rule, the law applicable to the succession as a whole is the law of the State in which the deceased had his or her habitual residence at the time of death. The national law of the deceased therefore no longer applies automatically. Before the Regulation entered into force, a German national who had lived in Spain for 10, 20 or 30 years could still have his or her succession governed by German law. The principle of habitual residence fundamentally changed this approach. Subject to certain exceptions, the law of the State of habitual residence now applies. Determining habitual residence requires an overall assessment of the circumstances of the deceased's life during the years preceding death and at the time of death, taking into account all relevant factors.
As the connection with Spain may differ considerably between a German national who has lived in Spain for only one year and someone who has lived there for 30 or 40 years, the Regulation provides for a choice of law. A person may expressly choose the law of the State whose nationality he or she possesses to govern the succession. Accordingly, a German national moving to Spain, or already living there, who wishes German succession law to continue to apply may make the appropriate choice of law in his or her will.
The choice of law should be made expressly in a declaration in the form of a disposition of property upon death or should be evident from the terms of such a disposition. Even where the deceased has not expressly made a choice, a valid choice of law may, in certain circumstances, be inferred from the terms of the will, for example where specific provisions of German law are clearly referred to.
In order to avoid potential problems concerning the interpretation of the deceased's final wishes and to provide the heirs with the greatest possible legal certainty, an express and clearly worded choice of law is strongly recommended.
Example of a choice of law:
A) Walter moves to Spain upon retirement in 1990 and dies there intestate in 2016. As no choice of law was made and his habitual residence was in Spain, Spanish succession law will generally apply.
B) Paul moves to Spain upon retirement in 2005 and dies there in 2016. Before his death, Paul executes a Spanish will in which he expressly chooses German succession law to govern his estate. German succession law will apply because Paul expressly chose the law of his nationality in his will.
Jurisdiction and choice of court
As a general rule, the Spanish courts have jurisdiction to rule on the succession as a whole where the deceased had his or her habitual residence in Spain at the time of death. However, where the deceased has made a choice of law in favour of German law, the Regulation provides for certain circumstances in which the German courts may have jurisdiction, particularly where the parties concerned enter into a choice-of-court agreement or where the Spanish court declines jurisdiction in favour of the courts of the Member State whose law was chosen. The following situations may therefore arise:
|
No choice of law |
General jurisdiction lies with the Spanish courts |
|
| Choice of German succession law |
General jurisdiction |
Spanish courts |
|
Choice-of-court agreement |
German courts |
|
|
Declining jurisdiction |
By agreement: German courts | |
| If contested: Spanish courts | ||
Further and more detailed information on the advantages and disadvantages of German and Spanish wills can be found in our article: "Will in Germany or Spain?"
Spending extended periods in Spain
In order to determine the deceased's habitual residence, the authority dealing with the succession must carry out an overall assessment of the circumstances of the deceased's life during the years preceding death and at the time of death. All relevant facts must be taken into account, particularly the duration and regularity of the deceased's presence in each country.
If you spend more than half of the year in Germany and only part of the year in Spain, for example during the winter months, this may be an important indication that your habitual residence remains in Germany. However, habitual residence for succession purposes must be determined on the basis of an overall assessment of the circumstances and not solely by counting days. If the centre of your life is in Spain, an express choice of law is particularly advisable in order to avoid uncertainty as to which succession law applies.
Fundamental differences between German and Spanish succession law and their consequences
Although German and Spanish succession law share certain fundamental principles, there are also significant differences. These concern, among other matters, the legal position of the surviving spouse, the rights of descendants, compulsory heirship rights and the testator's freedom of disposition. Under Spanish common succession law, descendants enjoy particularly strong protection and the testator's freedom to dispose of the estate may be considerably restricted. The choice between German and Spanish succession law can therefore have substantial consequences for the ultimate distribution of the estate.
Our law firm will be pleased to analyse your individual circumstances, advise you on the most appropriate choice of succession law and assist you with the necessary procedures relating to your estate and will. If you require further information or have specific questions regarding this matter, please feel free to contact us by email or telephone.
Author:
Christoph Sander
Lawyer and Tax Advisor
CEO, Partner, Director
info@sspartners.es
Tel: (+34) 951 12 13 06
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