Practical guide to sharing assets in inheritance

1. Declaring Death

The first thing to do, immediately after the death of your relative, is to register the death. This must be requested from the Civil Registry Office within 48 hours, after the health delegate or other doctor has issued the death certificate. With this document, you will prove that there was, in fact, a death, following up on the request. This has to be delivered by the next of kin and it is a free procedure. However, nowadays, and if you have no way to go to the Civil Registry Office, if you hire a funeral agency to handle the funeral, they can take charge of the process.

2. Elect a head of couple

In order for the administration of the assets left by the deceased to be carried out , a head of couple must be appointed, to whom this responsibility will be handed over during the period in which the inheritance has not yet been distributed.

To define a couple head, you must follow the logic:
    1. To be the spouse of the deceased, not legally separated from persons and property, to be heir or to have the right to share (half of the couple's assets, contemplated in the regime of the universal community of property);
    2. If there is a will, the executor;
    3. Be a relative and legal heir, the attribution being made to the closest (such as the son or brother, for example). not being related, the person who lived with the deceased for at least one year;
    4. Be a testamentary heir, i.e. covered by the will.  If more than one person is appointed, and in case of equality, the oldest person shall be elected.

If none of the heirs wishes to assume responsibility as head of the couple, the administration of the estate may be assigned to a person who is not an heir, by agreement between all parties. However, in the absence of agreement, it must be assigned to the courts, but only under special conditions such as: the designated heir refuses administration, is over 70 years of age, has an illness that makes it impossible to administer the estate or if the function is incompatible with the exercise of a public office Public.

In the event that an heir feels aggrieved by the administration of the head of the couple, the latter may propose to remove him from office, provided that he proves that he concealed assets or donations made by the deceased, indicated non-existent charges, administered the estate irresponsibly, failed to perform the duties imposed by law in the context of the inventory of assets, or demonstrated incompetence to exercise the office.

3. Declaring the inheritance to the Treasury

Once the head of the couple has been decided, it is up to him, within three months of the death of the relative, to make the declaration to the Treasury of all the assets subject to inheritance taxation. Until the division of the inheritance is not processed, these are under the administration of the head of the couple, who must also declare to the Treasury the death of the person.

If you are the head of the couple, or want to know exactly the process, know that for the declaration of the inheritance to the finances, it is necessary to fill out the Model 1 declaration of the Stamp Duty, plus Annexes I and II that concern the identification of the assets and the type of heir,  respectively. By completing these documents you will be notifying the Tax Authority of the death of your relative and following up on your reporting obligation.

In addition to the participation of the Model 1 declaration of the Stamp Duty, you must also provide copies of the death certificate, the NIF of the deceased person plus their Citizen Card, in addition to the NIF and identification document of each of the heirs or beneficiaries. After this delivery, the head of the couple will receive at his tax address a collection note from the Customs Authority to proceed with the payment of the Stamp Duty, which can be done at once or in installments. 

You must inform the Treasury if you make the full payment of the Stamp Duty, within fifteen days after receipt of the collection note. If you make the payment promptly, you will benefit from a discount of 0.5% on the value of each monthly fee, excluding the first, having a period of two months to make the payment after notification. However, rules are imposed if the amount is more than € 1000 and the head of the couple does not manifest otherwise, and the tax paid in ten equal installments, with each installment having to be less than € 200.  The first instalment shall be paid within two months of notification and the remainder every six months.

The ideal is to make accounts with the head of the couple, after receiving the collection note, so that the amount is divided by the heirs.

4. Settle taxes

Spouses, de facto partners, children, grandchildren, parents or grandparents are exempt from the payment of inheritance tax, however, they are obliged to declare to the Treasury the assets inherited by them.

If you do not identify with any of these kinships, being a brother or nephew, you have to pay Stamp Duty on the inheritance received, currently set at 10% for all assets subject to taxation.

To declare this tax, you must fill in, in Annex II (Subparagraph e.) of the Model 1 declaration, the type of heir, which may be a legitimate heir (exempt from tax) or heir with other degrees of kinship (subject to taxation). 

Subject to taxation are immovable property (urban or rustic), movable property subject to registration (such as cars, motorcycles, boats and/or aircraft for recreational purposes). On the other hand, the stuffing of a house, personal property, amounts invested in PRPs or Securities and Real Estate Investment Funds, credits from life insurance or other types of shares or invested capital, as well as monetary values up to € 500 and donations made under the Patronage Law, They are considered assets that do not have to be declared and must be divided among the heirs fairly.

Important: 

This text is merely informative and does not constitute or dispense with the consultation or support of specialized professionals - Lawyers