Twice as Many Heirs Renounce to Spanish Inheritance
Newspaper ABC has exposed a worrying trend: since 2007 110% more of eligible heirs to Spanish inheritance have renounced to their portion of the estate because there is more debt than equity to inherit.
According to the Notarial Council General, it’s a shame that so many people take the route of renouncing the inheritance, without knowing whether indeed the liabilities exceed the assets, just because it is not possible to have a clearer picture of the financial situation of the deceased prior to going in front of a Notary.
But Spanish Notaries remind us that the Spanish Civil Code has a solution for this: to inherit subject to “benefit of inventory”. This allows the inheritor to have the right to obtain the exact situation with the estate of the deceased testator prior to becoming a full inheritor but at the same time, accepting the designation if finally, there are assets worth inheriting. In other words, debts that are inherited will be covered by assets from the estate, not the inheritor.
For example, beneficiaries of a will written by victims of banks implicated in the Equity Release fraud are advised to choose this route to avoid becoming personally responsible for the mortgage loan that was sold fraudulently as the miracle product against Spanish Inheritance Tax.
This method of inheriting also allows inheritors to litigate against creditors (banks for instance where miselling took place) without becoming personally liable for it.
Finally, if all inheritors renounce to the inheritance, the Spanish State will be eligible to receive it although, subject too to debts not being higher than the part of the estate that is really worth something!