Cracking the Code

Spain, like many civil-law systems, has forced or reserved heirs. This author personally prefers to refer to them as reserved heirs rather than forced heirs, because a forced heir can always disclaim an inheritance if they want to. Reserved heirs are a series of individuals who have an automatic entitlement to the deceased estate. Those rights or shares, as well as other aspects involving the succession of the individual, vary between the different regions into which Spain is divided.[1] There is no uniform law in Spain that governs family and succession. On the one hand, there is Spanish general law that applies to a large part of the country (derecho común) and, on the other, regional law that applies in Aragón, the Balearic Islands, Basque Country, Catalonia, Galicia, Navarra and Valencia, among others.

Under Spanish general law, the following individuals are considered reserved heirs. First, the linear descendants, being children, followed by grandchildren and more remote descendants. If there are no descendants, then linear ascendants will have priority, being parents and grandparents. Last, but not least, comes the surviving spouse. This may come as a shock to some, but if the deceased is survived by a parent and a spouse, the parent has priority over the spouse to inherit if there are no children. In such cases, the parent will receive one-third and the surviving spouse will receive a usufructo, which is similar to the England and Wales interest in possession (IIP).

It is worth mentioning that the Civil Code of Spain (the Code) only refers to married spouses, therefore by ‘surviving spouse’ it should be understood that the spouses were married at the time of the demise of one of them. Registered couples[2] or cohabitating couples are not considered spouses for succession rights. Another important aspect to mention is that if the married couple are de facto separated (not divorced),[3] there will be no inheritance rights for the surviving spouse.

If there are descendants, they are entitled to two-thirds of the estate as follows: one-third divided equally among the descendants (this is commonly known as the Legitima Estricta); one-third known as betterment (mejora), which can be left to some of the descendants or to all of them (this is commonly used when the testator wishes to leave a larger share in the estate to one of their children); and finally, one-third as free disposition that can be left to an unrelated party. If the deceased is survived by a spouse and children, the spouse will be entitled to an IIP on the one-third of betterment. However, testators with both a spouse and descendants sometimes opt for applying what is known as ‘Cautela Socini’, in which the testator appoints the surviving spouse life tenant of the entire estate and the descendants as universal beneficiaries.

In cases of Cautela Socini, the descendants will not have access to the estate until the surviving spouse dies, similar to an IIP trust on first death. If any of the descendants were to protest or complain, their entitlement would be reduced to the strict reserved-heirship provision, which is one-third. Many unhappy beneficiaries will think twice before issuing a claim in this scenario.

Evidently, Spain is a far cry from testamentary freedom and is distinct from common-law systems where the surviving spouse has priority over children. It is also worth mentioning that in Spain no asset passes automatically by virtue of survivorship; therefore, joint assets are treated as the deceased holding a fixed share in the asset and so, on death, this asset will be part of the estate.

Spain does have matrimonial property regimes; however, under the community of property, on the death of one of the spouses the community is dissolved and assets (and liabilities) are split in equal shares between the surviving spouse and the deceased’s estate. In this case, the surviving spouse will have certain assets protected. However, not everyone is married under a community of assets regime.

Can you disown a reserved heir?

The answer is yes, but it is not an easy task and one may want to think twice before embarking on such a journey. The conditions to disown a reserved heir are contained in detail in arts.848–856 of the Code. It is worth mentioning that, as these clauses are more than 200 years old, they are outdated and in clear need of an overhaul. To disown a reserved heir it will have to be stated in a will, not verbally. There are a small number of grounds that can be considered abuse, including an attempt to murder a parent or spouse, failure to comply with marital duties or denial of maintenance. The Code also states that if the parties reconcile their differences then the act of disowning will be considered revoked. It is also worth noting that when a reserved heir is disowned, their linear descendants take their place. For example, if a father disowns his child, the children of the disowned child will take their parent’s place.

The Supreme Court of Spain (the Court) is trying to modernise the Code and has issued a series of decisions where the lack of contact between the child and their parent can be considered abuse. These rulings are fairly recent (2014 and 2015) and have become one of the few possibilities for testators intending to disown their children when contact between testator and children is lost. One of the issues is that the testator will have to include in the will a detailed explanation as to why they are disowning a reserved heir to reinforce their grounds in case of a claim from the unhappy heir. This can sound like exposing private issues as the grounds will be included in the will, not in a side letter or letter of wishes as happens in many common-law systems. The grounds will remain in a notarial deed. In many of these cases, the testator wishes to remove one of their children from the succession to benefit any other children or family members who, for example, may have been looking after the testator. Sadly, in many cases, this ends up being stressful for the benefited heir.

Another interesting ruling of the Court was one in which a testator disowned his daughter in his will.[4] The testator in this case did not include the grounds for disowning but did incorporate into the will a series of documents supporting his decision. In fact, after making the will, the testator and his daughter regained contact. The testator did not amend his will and the daughter challenged it on the basis that family relationships were re-established and the causes were no longer valid.

Conclusion

In essence, the Code is in dire need of reform when it comes to modernising succession rights. Clearly, it is more important to grant higher protection to the surviving spouse who may have been financially dependent or an important contributor to the family finances, rather than the adult children, who most likely will have their own finances sorted.

Until such reform comes (if it comes at all), professional advice should always be sought when drafting a will. In some cases, rather than taking the drastic approach of disowning a reserved heir, one should take a more pragmatic approach and leave the bare minimum to a reserved heir to avoid any potential legal actions that the disappointed reserved heir may bring against the beneficiary of the will.