In IURIT we went recently to a family with an increasingly common situation, a succession of international goods in 3 different countries:
A Spanish resident Paraguay for years, assets to be distributed among Spain, Europe and Latin America. His family —two sons and a nephew resident in the foreign— contacted us to find a way to organize the succession and to avoid a tax charge excessive at the time of inheritance.
Although it may seem a simple process, planning an inheritance international it is one of the biggest fiscal challenges, and existing legalespecially when the goods are distributed in several countries.
The challenge: three countries, three laws, a single family
The first step was to analyze where taxed each well, what is the tax residence of the father and what rights you have the heirs under the Spanish law (which imposes the famous “legitimate” for the children). In addition, you had to take into account the taxation in Paraguay, where the deceased resided, and in the EU, where he owns properties and accounts.
One of the biggest problems of these cases is the double taxation: that is to say, to pay tax for the same well in more than one country. Without planning, your heirs could end up losing a significant part of the inheritance only in taxes.
The strategy for a succession international: order, clarity and balance
Each case requires a different structure, but in this scenario we applied three main lines:
- Wills co-ordinated in each country.
The client made a will in Spain and Paraguay, is adapted to each legislation, while avoiding blocks, or inheritance parallel. This allowed his will to prevail in both jurisdictions. - Transmission in the life of some goods (planned giving).
Some properties in Spain were donated partially in life, while respecting the legitimate children, and reducing the fiscal impact later.
This made it possible to get reductions and regional and distribute loads gradually. - Specific provisions for the nephew.
Given that the nephew was not entitled forced to inherit, we designed a legacy to his favor in the form of a donation conditioned, by adjusting the times to avoid being taxed twice, and respecting the Spanish legislation and paraguay.
From IURIT we believe that the true value is not only in the “formula” in law, but in anticipating: organize before you, to choose correctly the jurisdictions and to document each step.
Lessons that stops this case. International Succession
- Each country has its own rules of succession and taxation, and often contradict each other.
- The tax residence of the deceased and the heirs determines where to pay (and how much).
- No plan it implies leaving the tax-and-family conflicts, decide for yourself.
- A will is not enough: without international coordination, it may be ineffective or even unenforceable.
Important: every family has its own caseload
This case represents a possible structure, but each person and each family are different:
the property, the countries involved, the age, the heirs, and even the tax residence will completely change the strategy.
That's why in IURIT we do not offer standardized solutions, but rather plans for succession custom combining international law, taxation and wealth strategy.
Do you have properties or investments in different countries?
Do you live outside Spain, but your family or your heritage are still there?
Contact us and book a call with our team to be able to know the situation and see how we can help you.
In IURIT, we will help you protect your legacy international, avoid double taxation and to ensure that your heritage to reach exactly who you want.
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