Dealing With Spanish Assets- Coping With Restrictions on Movement
An estimated one million British individuals own assets in Spain.
The number of British individuals who are officially Resident in Spain is generally stated to be approximately one third of that figure.
That means that hundreds of thousands of British individuals who are living outside Spain own Spanish assets- and in many cases, the Spanish assets in question are properties.
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For many months now, there have been varying restrictions on movement- due to the Covid pandemic. For owners of Spanish properties who live outside Spain, this has meant that it has been either difficult- or in many cases, impossible- to go to their Spanish properties and/ or attend to legal/ administrative matters in Spain.
Meanwhile, the anticipated Spanish economic fall-out from the pandemic has been extensively covered in the Press. So, grave concerns have arisen on the part of many Spanish property owners, as to the stability of the Spanish property market going forward; the prospect of sharply increasing taxes for Spanish property owners; and even as to (what many see as) lax Spanish laws as regards illegal property occupiers/ squatters.
It is inevitable over this extended period, that Spanish Estate Planning arrangements/Wills need updating in many cases, as individual circumstances change and health/ mental capacity can deteriorate over time. And individuals pass away, so Spanish assets need to be administered; and there are many people also concerned about the additional uncertainties arising out of Brexit (but with the current upside of the relative weakness of Sterling), who wish to liquidate assets in Spain- find buyers- whilst they still can- of their Spanish properties.
But a major hurdle is that all legal work of this nature in Spain- Wills/probate/property transactions – has to be effected through Spanish Notaries/Registries. So, how can the inherent incompatibility between Spanish legal functionality and restrictions on movement be overcome?
Spanish Wills/ Estate Planning
Traditionally in the vast majority of cases, it has been necessary for Spanish Wills to be signed before Spanish Notaries- in Spain; and registered by the Notaries at the Central Spanish Wills Registry. However, for the convenience of UK-based testators, there is a well-established process through UK Notaries Public and with the cooperation of the Central Spanish Wills Registry, for Spanish Wills to be signed in many locations in the UK, instead of Spain. Provided that the procedural requirements are precisely followed (including legalization through the Foreign and Commonwealth Office; and translation certification by an official translator duly authorized by the Spanish Ministry of Foreign Affairs), Spanish Wills signed in the UK will now have exactly the same legal validity as those signed in Spain.
Spanish Inheritance/ Probate
The principal aspects of the process detailed above which enable Spanish Wills to be signed in the UK, can also be applied to Spanish Powers of Attorney. It is therefore possible for a specific format of Spanish Power of Attorney for inheritance procedures to be signed in the UK, in favour of a Spanish legal representative. So, in many cases (assuming that the family has a basic amount of information/ documentation about the Spanish assets in question), it is possible for the entire Spanish probate process to be conducted under a Power of Attorney signed in the UK (or elsewhere in the world), enabling Spanish probate cases to be completed without the beneficiaries needing to set foot in Spain.
Spanish Property Sales
The facility mentioned above for Spanish Powers of Attorney to be signed outside Spain can also facilitate property transactions (whether pursuant to probate or simply regular sale/ purchase transactions), without the parties needing to be personally present in Spain.
This is a particularly convenient solution in Spanish probate cases, where beneficiaries can be spread out internationally, so the entire process through probate up to and including asset disposal, can now be completed remotely without any necessity for the parties to be personally present in Spain.
A Note of Caution – Professional Regulation/Accountability
It must be noted that the facilities indicated above involve a high level of responsibility and trust being placed in the legal representative in Spain. When dealing with valuable transactions and ceding control of client funds, the parties/ clients need to be completely certain that they are in safe hands.
So more than ever, the professional credentials of appointed legal representatives need to be scrutinized; and there needs to complete clarity as to the professional regulation and accountability of any such legal representative.
In Spain, there are a number of categories of legal and accounting service providers (and in the Spanish Real Estate market, many operators are simply transactional facilitators). As such, the level of professional regulation and accountability can be extremely variable- and the true extent of the protection and security clients are actually afforded can be quite difficult precisely to assess.
It has always been our view at Legal 4 Spain, that (when UK clients are selecting a Spanish legal representative to act in relation to Spanish assets under Power of Attorney in the circumstances described above), the clients should have the comfort of knowing that their legal representative is able clearly to demonstrate dual professional regulation (in Spain and in the UK).
For obvious reasons, we also consider that this is a crucially important issue for UK professionals when they are making recommendations to their clients as to appropriate legal representatives to deal with Spanish assets.
The above is non-exhaustive, general advice. The Legal 4 Spain team is always available to provide preliminary advice on a no- obligation basis in relation to the Spanish legal practice areas mentioned.
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