The death of a relative leads their descendants to automatically think of an inheritance. This can be well received by the recipients or suppose a jug of cold water if the estate of the deceased does not pay off.
Administrative procedures are abundant for the recipients of the inheritance, especially in cases in which there is no will. There are recurring concepts and aspects that many families face.
The hereditary flow
The first of all consists in knowing the scope of the inheritance, its content. The world of law has a term to define this received heritage: the hereditary flow. “It is the sum of the assets, rights and obligations that the deceased has, both what adds up and what remains,” explains Víctor Ortiz, co-founder of Heritae, by telephone. Tracing the estate can become a complex task. Clarifying it will define whether the inheritance brings benefits or debts to the recipients.
“We must be aware of everything that the deceased has, and therein lies the problem. There are things that can be calculated very easily, such as life insurance,” says Ortiz in reference to the insurance certificate, the document that a person can request to the Ministry of Justice. “On the other hand, there is no certificate that collects the accounts of the deceased or where he had them. This is usually known by letters from the bank or through the children.”
Giving up an inheritance: not always possible
The definition of the hereditary flow helps to decide the acceptance of the inheritance or the renunciation of it, according to the financial situation of the heirs who must assume it. Inheritance acceptances in Spain increased by 22.2% in 2021, according to data from the General Council of Notaries. An increase caused by the excess mortality of the pandemic. In parallel, resignations also increased last year (25% more than the previous year) and wills (14.6%).
The main reason for the waivers is the certainty that the assets to be inherited will be a source of expenses and not of income. “These obligations must be assumed most of the time by the family member who inherits, unless the inheritance is accepted in the inventory benefit format, where the heir only responds to debts that add up to a maximum amount equal to the limit of the inherited” says Ortiz.
However, this option is testimonial. The vast majority of inheritances are received in the other format protected by law: pure and simple inheritance. “You are responsible for all obligations even with your own assets,” Ortiz points out about this modality. From the General Council of Notaries, they recommend signing an inheritance for the benefit of inventory only in those “gray or doubtful” inheritances, whose liabilities are not well known by the heirs.
Hollywood movies have spread the myth of renouncing live inheritances. Spanish legislation expressly prohibits repudiating an inheritance in the future. The most mediatic case in recent years is the resignation of King Felipe VI of the inheritance of his father, King Emeritus Juan Carlos I. The monarch’s announcement has no legal validity because his father is still alive.
That is why the Royal House limited itself to pointing out that Felipe VI had told his father that he wanted to renounce the inheritance. “HM the King wants it to be publicly known that HM the King Don Juan Carlos is aware of his decision to renounce the inheritance of Don Juan Carlos that he personally could correspond to,” the statement said.
On the other hand, inheritances must be discarded en bloc, without the possibility of fragmenting it and accepting only the part that interests the heir. Another requirement that is often forgotten is legitimacy. That is, the resignation can only be undertaken by the person or persons entitled to do so. In practice, those who appear in the will as heirs or legatees.
Inheritance and legacy, different realities
There is a modality similar to inheritance but without being so. The legacy is a provision of one or more assets or specific rights to a person. For it to exist, it must be in writing in a will. Two differentiated figures are born: the legatee (receiver of the assets indicated by the testator) and the heir (receiver of a proportional part of all the assets of the deceased).
The second loses out when there is a legacy: a person who has not been designated heir but is a legatee keeps a small part of the deceased’s estate, which can be a single object or a larger legacy. For example, a person leaves all his assets to his three children, with a symmetrical distribution among them. However, in his will he cuts off a family piano that his niece receives as a legacy, the only one in the family who has musical studies. That good decreases the hereditary flow because it ceases to be part of the inheritance.
The content of a bequest covers everything imaginable and is not necessarily a high-value asset. “Many times they are mementos of testimonial value, like a photo album or a watch,” says the specialist in inheritances Víctor Ortiz from experience. “Others -he adds- are assets of economic relevance, such as real estate.”
Legacies are frequent in inheritances in which there are no forced heirs (those to whom the law guarantees a part of the heritage). The testate establishes different legacies in gratitude for the treatment received by some people.
Inheritance taxation: surcharges for accepting it late
It is convenient to be up to date with hereditary obligations to avoid scares. The largest of the obligations is the Inheritance Tax. This tax is levied on increases in assets obtained for profit (by inheritance or donation) by natural persons. Therefore, as a personal tax, it must be paid by all the heirs. “The term to settle the inheritance tax is six months. The period counts from the death and not from the acceptance of the inheritance, as many people believe,” says Almudena Velázquez, legal director of .
That period passes many times without rendering accounts before the Tax Agency. Then, another period is activated, also six months. It is not convenient to exhaust all the time in case the heir estimates that he will need an extension. “Up to the fifth month you can request a postponement to settle the tax,” explains the lawyer Pere Picón Navarro, from the Picón Advocats office.
In any case, the extension is not free. The heirs must pay the default interest up to the date on which the liquidation is paid. The interest rate is established each year in the General State Budget.
The individual who does not comply with the obligations before the Tax Agency will face sanctions. Infringements of the inheritance tax are included in the General Tax Law, which mentions different surcharges depending on the delay period: “If the presentation of the self-assessment or declaration is made within three, six or 12 months following the end of the established period for the presentation and entry, the surcharge will be five, 10 or 15%, respectively”, states this regulation in its article 27.
The surcharge reaches 20% if one year has elapsed since the end of the term to pay the tax.
Finect has one to answer any questions about managing savings, as well as the best options to invest part of the user’s inheritance.
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