Two Wills Technique – Distribution of Assets in Northern Ireland and Spain
2 December 2021
Wills & Estate Planning
Making the ‘Last Will and Testament’ is one of the most important decisions a person faces during their lifetime. Without it, the distribution of their Estate would follow the laws of intestacy and these could potentially create very complex unwanted situations and provoke family disputes. The process is relatively simple if the person is a national and a resident of the same country and if all the Estate is located within the same territory, the Probate and Administration of the Estate will be subject to the same laws.
When there are assets located abroad, such as a holiday home in Spain, or the person making the Will is a dual-citizen, or is domiciled abroad or resident in a different country of his nationality, it is important to assess whether such Will, made in the country of residency (i.e. Northern Ireland), would have the desired effect with the distribution of the property located abroad and whether the authorities of the other country would recognise it as a valid Will under its internal laws, therefore allowing the properties to pass according to the wishes of the testator.
Complexities can arise when the country is outside the European Union (i.e. the United Kingdom) or has a different set of legal principles (Common vs Civil law). In addition, different territories within Spain have historical civil succession laws that could impose strict rules on the distribution of properties and assets to statutory heirs and can affect the wishes of the deceased.
The Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession has created an opportunity to harmonise succession laws and procedures within the EU Member States.
Since its entering into force, the succession processes within the EU have been streamlined. The Regulation applies to deaths that occur on or after 17 August 2015 However, the United Kingdom decided not to adopt the Regulation.
It has been common practice through the years to make two different Wills speaking to each other, one in Northern Ireland (subject to the formalities and laws of Northern Ireland) distributing the assets and property located within the jurisdiction and a second Will (subject to formalities required in Spain) distributing the property located in Spain only, this is what it is called the “Two Wills Technique”.
In some circumstances, if the Wills do not speak to each other, when making the second Will, the testator could automatically revoke the first Will made in Northern Ireland and leaving the Probate and distribution of the Estate subject to UK’s intestacy laws (as the Spanish Will would only be into place to deal with the property located in Spain, unless otherwise specified within). Codicils or making a new Will in the future have also to be made and synchronised to prevent further revocation.
The order in which the Wills are made is also a very important feature to consider, as the main Will regulating the distribution of the majority of the Estate would have to be the “umbrella” Will and include reference to it on the second Will. Moreover, Northern Ireland and Great Britain do not have a central system of registration of Wills or testamentary provisions, therefore if the testator decides to make two Wills, it is recommended to include a copy of them together or to make reference to it to guide the executors at the time of Probate. On the contrary, Spain has the Central Registry of Last Wills and can be accessible at the time of death of the testator. If both Wills are linked to each other, it is also recommended that any changes are communicated to the Registry so the entry can be updated.
Through different legal decisions, following the entering into force and applicability of the above Regulation, the Spanish authorities have questioned the validity of the Two Wills Technique, as they have considered that a Will has to be made in one single act comprising the totality of the Estate, rather than in two or successive moments in time distributing different properties by each Will. This has been, still is and will continue to be a very controversial topic, as the relevant authorities and the courts differ on the interpretation of the mechanisms applicable to international probate matters.
Moreover, the Spanish Authorities have also reviewed and commented on the different institutions between the UK (Executor or Trustees) and Spain (Albacea/Contador partidor or Fideicomiso), and the courts have accepted (on a case-by-case basis) this technique by looking to the particular circumstances of the testator, the nationality, the domicile, place of residency and the applicable law and content of the Will.
It is likely, however, that in the foreseeable future new laws and regulations are put into place to finally create a uniform approach and unique solution to this complex situation. Therefore, any inheritance planning that use the Two Wills Technique in which a foreign aspect is involved should consider that changes in the law could affect the distribution of the Estate in the future.
If you require any advice or assistance relating to the topics in this article, please contact MKB Law.