International Inheritances: Pitfalls in the German-Spanish Context

Inheritance proceedings in Germany or Spain?

The settlement of an international inheritance in the German-Spanish context almost always raises a fundamental question at the outset: Where should the probate proceedings take place - in Germany or in Spain?

The answer to this question depends on several factors. It often occurs that, from a legal perspective, probate proceedings should take place in Spain, but all heirs reside in Germany and would find settling the inheritance in Spain burdensome and unnecessary. There are options available even in such cases to find a pragmatic solution for all parties involved. While this may require some persuasive effort, with the right guidance and arguments, it can be managed effectively.

Challenges of testamentary interpretation

If a will exists, it simplifies the situation when it provides clear instructions regarding the inheritance, such as applicable law. However, this is not always the case. In some rarer instances, a will can complicate the inheritance process, not necessarily from a legal standpoint, but more so due to practical aspects. For example, if a German court must examine a Spanish notarial will, issues often arise in obtaining the original document from the Spanish notary. Conversely, in proceedings governed by Spanish authorities, difficulties may arise when interpreting a German handwritten will, for instance.

However, in the absence of a will, determining the applicable inheritance law (German or Spanish) depends on the individual circumstances of the deceased. This can be straightforward but also challenging. I have addressed this topic in detail in my doctoral thesis, and a condensed version can be found here.

Tax obligations: The so-called NIE number

Another frequently encountered issue concerns tax declarations in both countries. All heirs must take the necessary steps to fulfill their tax obligations in Germany and Spain. Especially in Spain, very short deadlines apply, and extensions should be applied for as soon as possible. Additionally, both tax declarations, the German and the Spanish, should ideally be consistent in content and well-coordinated.

Obtaining a Spanish tax number (NIE) is normally essential for the heirs. This step is often perceived as one of the most cumbersome, as the required procedure involves complicated forms, personal appearances, and lengthy processing times with Spanish authorities. Therefore, we strive to simplify this process for our German clients as much as possible, understanding their view that it is unnecessarily formalistic and bureaucratic.

Inherited businesses and properties: Formal aspects

Furthermore, additional challenges may arise with inherited businesses or properties, especially concerning the transfer of registers. Registering heirs in the corresponding land and commercial registers in both Germany and Spain requires a comprehensive understanding of local regulations and procedures.

Take precautions: Estate planning

To prevent complications like those mentioned above, comprehensive estate planning before death is advisable, especially when it is foreseeable that the inheritance will span multiple countries. This planning should consider both German and Spanish laws and weigh them against each other.

Appointing an executor can also be advisable. This executor should be familiar with both legal systems, ensuring that the estate is settled according to the wishes of the deceased and as smoothly and efficiently as possible. This minimizes disagreements among heirs regarding the formal handling and settlement of the international inheritance, often leading to amicable solutions in line with the wishes of the deceased, without resorting to court disputes.

Summary

Given the complexity and potential pitfalls in handling international inheritances in the German-Spanish context, seeking professional legal advice early on is advisable. Careful planning in advance and appointing an experienced executor can help ensure that the estate is settled according to the wishes of the deceased and in compliance with applicable laws, thus preventing potential disputes among heirs.

My team and I are at your disposal for any assistance in this matter.