The problems of Probate and how to solve them

Inheritance Planning

For most people living in Spain, the focus of any “Inheritance Planning” is trying to reduce the potential Inheritance Tax liability they may have. Everyone is aware that Inheritance Tax has to be paid and that in some cases it can be a substantial amount. Naturally they would prefer that their inheritors get this money rather than the taxman. However, there is another problem which should be taken into account when doing Inheritance Planning – Probate.

What is Probate?

Probate is the legal process which we have to go through to validate a Will after death. The inheritance cannot be passed on until Probate has been applied for and granted. Normally the person appointed to deal with the deceased’s estate – the executor – is responsible for applying for Probate.

The process of applying basically involves proving that the Will is genuine and has not been superseded by a more recent Will. If the deceased has appointed a solicitor as executor of their estate, applying for Probate will often be very simple as the solicitor is familiar with Probate law and is often the one who drafted the Will in the first place.

However, appointing a solicitor as an executor can often be very expensive, particularly as no matter how simple the Probate application, it can be a very time-consuming exercise. If a family member has been appointed as executor, they may find it a much more difficult process with many forms to fill in, information to gather and other problems – all at a very difficult time after a bereavement.

Why Is Probate a Problem?

For anyone with assets in more than one country, Probate will have to be granted individually in each of the countries concerned. This can make things very complicated indeed as your executors will often find themselves dealing with a foreign legal system as well as a different language.

For anyone with “offshore” investments, Probate will have to be applied for in each of the offshore centres in which assets are held. Probate can be time-consuming and expensive, particularly when applying abroad. If action can be taken now to avoid the need for Probate, it will certainly make life much easier for inheritors.

Can I avoid Probate?

The easiest way to solve the problems of Probate is to simply avoid the need for Probate in the first place. One of the cheapest and simplest ways of doing this is by using a Probate Trust. Many people believe that Trusts are complicated documents only to be used by the super-rich. This is not the case. Some Trusts are of course extremely complicated, however the most effective are often the simplest and cheapest. Another solution to the Probate problem is to use an Investment Bond. By putting assets inside a particular type of bond structure, it is possible to ensure that, upon death, the funds will pass directly to your nominated beneficiaries. Using a Bond is a much simpler way of avoiding Probate and has the added advantage of other significant tax benefits.

 

What should I do?

If you have not already taken steps to ensure that your Inheritance Tax liability has been reduced and that the need for Probate has been avoided, you should do so now.

It is possible to solve both of these problems without incurring huge expense or difficulty and it is worth knowing that when you go, your wealth will pass to those you want it to go to without any difficulty. If you would like more information, or a review of your circumstances, we will do so free of charge.

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