Walter Finch
HEIRS in Spain who don’t formally reject an inheritance could find themselves personally liable for the deceased’s debts – including outstanding mortgages, credit card bills and even unpaid utility bills.
The Bank of Spain has warned that many people wrongly believe debts die with the deceased, when in reality Spanish law passes all financial obligations directly to inheritors alongside any assets.
Under the country’s inheritance laws, heirs automatically receive both the good and the bad – unless they take specific legal action to protect themselves.
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Those who accept an inheritance where debts exceed assets will be forced to pay the shortfall from their own personal wealth, potentially putting their homes and savings at risk.
The warning comes as legal experts report growing confusion among expat families about their rights and obligations when inheriting Spanish property and assets.
“If you don’t formally renounce or accept with conditions, the law assumes you’ve accepted everything,” explained lawyers from Altima Abogados. “This can be financially devastating for families.”
The most common inherited debts include personal loans, outstanding mortgages, unpaid taxes to the Hacienda (Tax Agency), Social Security contributions, credit card balances and even community fees or utility bills.
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However, these debts don’t last forever.
Obligations to public bodies like the Tax Agency expire after four years, while mortgage debts are written off after 20 years.
Spanish law offers three options for handling problematic inheritances. Heirs can accept everything outright, renounce completely, or choose the safer ‘beneficio de inventario‘ route.
This third option allows inheritors to settle debts using only inherited assets, meaning they keep whatever remains but aren’t personally liable if debts exceed the estate’s value.
If heirs renounce entirely and debts outweigh assets, the Spanish state assumes responsibility for outstanding obligations.
But the process of uncovering hidden debts can be complex and time-consuming.
Families must obtain death certificates, check with the Ministry of Justice for wills, contact banks to reveal loans and credit arrangements, and examine Social Security and Property Registry records.
The Bank of Spain’s advisory comes amid concerns that many British and other foreign residents in Spain are unaware of the country’s inheritance laws, which differ significantly from those in their home countries.
Legal experts advise all potential heirs to seek professional advice before making any decisions about Spanish inheritances, particularly where property or significant assets are involved.
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