Inheritance Planning on Mallorca - What Every Expat Needs to Know

Why this matters more than you think

Most expats who move to Mallorca spend a lot of energy sorting out their NIE (Numero de Identidad de Extranjero - the Spanish identification number for foreigners), their residency, their bank account. Inheritance planning lands somewhere on the mental list of "things to do eventually."

The problem is that "eventually" sometimes arrives too soon, and an unplanned estate involving Spanish property, a foreign pension, and heirs scattered across two or three countries can take years and thousands of euros to unravel.

The good news: Mallorca is actually one of the most favourable places in Spain for inheritance planning. The Balearic Islands have their own civil law that is more flexible than mainland Spanish law, there is a generous tax break for close relatives, and EU law gives most expats a powerful tool - the right to elect their home-country law to govern their succession.

This guide explains how all of this fits together. It is not a substitute for advice from a qualified lawyer. Inheritance law is firmly YMYL territory: get a professional who knows both Spanish and EU succession law to review your specific situation.

EU Succession Regulation 650/2012 (Brussels IV)

The EU Succession Regulation - often called Brussels IV - came into force on 17 August 2015 and changed the landscape for expats living anywhere in the EU.

Before Brussels IV, the default rule in most EU countries was: the law of the country where you are habitually resident at the time of your death governs your succession. For a British person who had been living in Mallorca for 15 years, that would have meant Spanish law - including Spanish forced heirship rules.

Brussels IV keeps that default in place (habitual residence = Spanish law) but adds a crucial option: you can elect your nationality's law to govern your entire succession. You do this in a written declaration, typically included in your will. It must be done before death - you cannot make the election after the fact.

What this means in practice:

• A UK citizen living in Mallorca can elect English or Scottish law (or Welsh law, or Northern Irish law, depending on their domicile within the UK) in their Spanish will. Under English law, for example, there is no forced share for children; you can leave everything to whoever you choose.
• An Irish citizen can elect Irish succession law, which does have a legal right share for spouses but is generally less restrictive than Spanish forced heirship.
• A Canadian citizen from Ontario can elect Ontario succession law. Australian citizens can elect the law of their home state.

The important catch for UK citizens: The United Kingdom is not a member of the EU and is therefore not bound by Brussels IV as a receiving country. However, Spain, as an EU member state, still applies Brussels IV, and Spanish courts will recognise a UK citizen's election of UK law in their Spanish will. The practical effect - that your Spanish estate is governed by UK succession law - should still work. But the precise interaction is something you need to confirm with a lawyer given the post-Brexit landscape.

US citizens: The United States is not an EU member state either. Spain's courts have generally accepted elections of US state law by American residents, but this is not guaranteed. American expats should get specific legal advice.

Non-EU citizens in general: The regulation says an EU member state (like Spain) will apply the foreign law of a non-EU country if the deceased elected it. So even if you are Australian or Canadian, your election of home-country law written into a Spanish will should be respected by Spanish courts - in most cases.

The election must be explicit and unambiguous. It is not enough to write a will in English using English legal terminology and hope that implies an election. The clause needs to state clearly which national law you are choosing.

What Spanish forced heirship actually means

If you do not make a valid law election (or if you simply have no will), Spanish common law (the Codigo Civil) applies to your succession. Spanish law divides your estate into three equal thirds:

• The "legítima estricta" - the strict reserved share. This must go to your children (or grandchildren if a child has died). It equals one third of the estate. You cannot leave this to anyone else.
• The "mejora" - the improvement third. This must also go to descendants, but you can choose which descendants benefit and in what proportions. A grandchild can receive it even if their parent is alive.
• The "libre disposicion" - the free third. You can leave this to whoever you like: your spouse, a friend, a charity, a second spouse.

For a couple with two children, this means the children are guaranteed at least one third of the estate (the legítima) and at least two thirds between them if you leave the mejora to them as well. Your surviving spouse has a right to the "usufruct" (life use) of the mejora third, but not full ownership.

For a couple with no children, the situation is different. Your parents (or other ascendants) become forced heirs for one quarter of the estate if they survive you. If they do not survive you, there is no forced share and you can leave everything to your spouse.

This is why Brussels IV matters so much for UK and some other common-law-country citizens: you can override all of these rules by electing your home-country law.

The Balearic twist - island civil law

Spain is not a uniform legal country. Several regions (Catalonia, the Basque Country, Aragon, Navarra, Galicia, and the Balearic Islands) have their own civil law compilations that govern certain private law matters, including succession.

The Balearic Islands have the "Compilacion de Derecho Civil de les Illes Balears" (the Compilation of Civil Law of the Balearic Islands). Mallorca and Ibiza have somewhat different rules within this compilation; Menorca follows Mallorcan law.

Key differences from mainland Spanish law for Mallorca:

The legítima in Mallorcan law is only one quarter of the estate for the children collectively (compared to two thirds under mainland law). This is a significant difference. Children are still protected, but the restricted portion is much smaller.

Additionally, Mallorcan law allows parents to give a child the entire estate and formally exclude other children from the legítima through specific testamentary mechanisms. The rules are more flexible and the forced share is lower.

This matters to you if you acquire "vecindad civil mallorquina" - see the next section.

When Balearic law applies - vecindad civil

"Vecindad civil" (civil status or civil neighbourhood) is the concept that determines which Spanish region's civil law applies to you. It is separate from your nationality and separate from your fiscal residency.

When you first arrive in Mallorca as a foreign national and become habitually resident, you do not immediately acquire vecindad civil mallorquina. You acquire it after 10 consecutive years of continuous residency in the Balearic Islands (unless you actively choose to retain the civil status of your home region or country).

Why does this matter? If you die while still a foreign national (say, a British or American citizen) who has not made a law election, Spanish internal conflict-of-law rules would normally apply Spanish law to your Spanish succession. Which Spanish regional law applies depends on your vecindad civil. If you have acquired vecindad civil mallorquina after 10 years, Mallorcan succession law (with its lower legítima of one quarter) applies rather than mainland Spanish common law (with its two-thirds legítima).

For most expats who elect their home-country law under Brussels IV, vecindad civil becomes less important because the election overrides it entirely. But if you have not made an election, understanding vecindad civil is relevant.

The 10-year rule runs from the date you establish habitual residence in the Balearics. There is no formal application; it happens by operation of law. However, proving when the 10 years started can require documentation (empadronamiento certificates, residency permits, etc.), so keep records.

Making a Spanish will at a notary

Even if you elect your home-country law, you should have a Spanish will (testamento) that covers your Spanish assets. Here is how it works.

Types of Spanish will:

The most common form for expats is the "testamento abierto" (open will). You go to a Spanish notary (notario), who drafts the will based on your instructions. You sign it in front of the notary and two witnesses are normally not required for this type. The notary keeps the original and sends a notification to the Registro de Ultimas Voluntades (the central register of last wills).

A "testamento cerrado" (closed will) is sealed and the notary does not know the contents. This is rare for expats.

A "testamento olografo" (holographic will) is entirely handwritten, dated, and signed by you. No notary is involved, but it has to be presented to a court for validation after death. This option is simpler but less reliable and generally not recommended for expats with complex cross-border estates.

What to include in your Spanish will:

• The explicit Brussels IV election clause: name your nationality and state that you elect the succession law of [your nationality / home state] to govern your entire succession, or alternatively restrict the election to your Spanish assets.
• Identification of your Spanish assets (property, bank accounts, vehicles, shares in Spanish companies).
• Who you want to inherit those assets (your beneficiaries).
• Appointment of an executor (albacea) if you wish.
• If you have children, consider whether you are excluding them from the legítima or making specific provisions.

Costs: A simple Spanish will at a notary typically costs between 60 and 150 EUR in notary fees. A more complex will with detailed asset descriptions and specific clauses may cost more. Your lawyer's fees for preparing the instructions and attending with you are additional (expect 300 to 800 EUR depending on complexity).

Translation: The notary will read the will to you in Spanish. If you do not speak Spanish, a sworn interpreter (traductor jurado) must be present. Many notaries who work with expats have in-house interpreter services or can recommend one.

The Registro de Ultimas Voluntades: After your death, your heirs (or their lawyer) must request a certificate from this registry to establish whether a Spanish will exists and where the original is held. The request (plus a copy of the death certificate) is submitted to the Ministerio de Justicia. The process is straightforward but takes a few weeks.

The two-will strategy

Many expats with assets in both Spain and their home country end up with two separate wills:

1. A Spanish will covering Spanish assets only (property on Mallorca, Spanish bank accounts, Spanish vehicles, shares in Spanish companies). This will typically includes the Brussels IV election clause.

2. A home-country will covering all assets outside Spain (property in the UK, US, Canada, Australia or Ireland; pension funds; investment accounts; home-country bank accounts).

Why two wills instead of one?

A single worldwide will drafted in your home country can be used to deal with your Spanish estate, but it requires a recognition procedure in Spain that takes time and generates costs. It also means Spanish authorities are applying and interpreting a foreign legal document, which introduces friction.

Keeping the wills separate - with each will clearly stating it covers assets "in Spain only" or "outside Spain" respectively - avoids this problem. The key is to ensure the two wills do not conflict with each other or accidentally revoke each other. The clause in each will should explicitly say "this will does not revoke or supersede my will covering assets in [other jurisdiction]."

Coordination is essential. If you use a Spanish lawyer for the Spanish will and a solicitor or attorney in your home country for the home-country will, make sure both advisers know about each other's document. Mismatches between the two wills are one of the most common problems in cross-border estates.

Inheritance tax in the Balearics

Inheritance tax (Impuesto sobre Sucesiones y Donaciones - ISD) is a Spanish tax that applies to assets inherited in Spain. Unlike in some countries, it is paid by the recipient (the heir or beneficiary), not by the estate.

The 2023 reform - 99% reduction for close relatives:

The Balearic Islands government introduced a 99% reduction in inheritance tax for Group I and Group II beneficiaries, which took effect in 2023. This is one of the most generous inheritance tax regimes in all of Spain.

• Group I: Children and grandchildren under 21.
• Group II: Spouses, registered partners, children and grandchildren aged 21 or over, parents, and grandparents.

In practice, a spouse inheriting from their partner pays almost nothing. Children inheriting from a parent pay almost nothing. This is a massive practical benefit for families living on Mallorca.

What about more distant relatives and non-relatives?

The 99% reduction does not apply to Group III (siblings, uncles, aunts, nephews, nieces) or Group IV (more distant relatives and unrelated beneficiaries). These groups pay the full Spanish inheritance tax rate, which is progressive and can be substantial - potentially 30% or more on large inheritances. If you plan to leave significant assets to someone outside Group I/II, tax planning is important.

Who pays Balearic inheritance tax?

The rules on which regional tax applies can be complex. In general, if the deceased was habitually resident in the Balearic Islands at the time of death, the Balearic regional tax rules apply. If the asset is real estate in the Balearics but the deceased lived elsewhere, the property is still taxable in Spain but which regional rules apply requires professional analysis.

Non-resident heirs: Heirs who are not resident in Spain still have to pay Spanish inheritance tax on Spanish assets inherited from a Spanish resident. The six-month deadline applies to them too. Many non-resident heirs are surprised by this obligation.

Home-country tax interaction

US citizens - estate tax (Form 706-NA):

US citizens are taxed by the US on their worldwide estate regardless of where they live. If a US citizen dies while resident on Mallorca, the US estate may be subject to US federal estate tax (currently with an exemption of roughly $13 million per person, though this threshold is scheduled to change in coming years - check current IRS guidance). The US-Spain tax treaty on estate and gift taxes helps avoid full double taxation, but the interaction is complex. The Spanish inheritance tax paid can often be credited against the US estate tax liability. A US tax attorney or CPA who specialises in international estates should be involved.

UK citizens - inheritance tax (IHT):

UK IHT applies to the worldwide estate of anyone "domiciled" in the UK for IHT purposes. Note that IHT domicile is a specific legal concept and does not automatically follow tax residency or habitual residence. Many UK citizens who have lived in Mallorca for years - and are tax-resident in Spain - may still be treated as domiciled in the UK for IHT purposes under UK domestic law, though a deemed domicile rule (currently 15 out of 20 years of tax residency in the UK) may eventually switch their domicile. The UK-Spain double taxation convention on inheritance tax helps avoid full double taxation but again, the interaction requires specific advice. The standard UK IHT rate is 40% on the taxable estate above the nil-rate band (currently GBP 325,000, with additional allowances for family homes passing to children).

Irish citizens: Ireland has Capital Acquisitions Tax (CAT) at 33% on inheritances above certain thresholds. Ireland does not have a bilateral estate tax treaty with Spain. Heirs may face both Spanish inheritance tax (on Spanish assets) and Irish CAT (on the worldwide inheritance if the heir is Irish-resident). A double charge may apply to the extent both countries tax the same asset, with some relief possible through foreign tax credits.

Canadian and Australian citizens: Neither Canada nor Australia levies a formal inheritance or estate tax. However, both countries treat death as a deemed disposition for capital gains tax purposes (Canada) or have capital gains tax implications (Australia). The interaction with Spanish inheritance tax is generally less punishing than for UK or US citizens, but still warrants professional advice.

Key steps and timeline

What to do now (even if you are young and healthy):

1. Establish which law you want to govern your succession (your home-country law under Brussels IV, or Spanish/Balearic law). Discuss with a lawyer.
2. Make a Spanish will (testamento abierto) at a Spanish notary, including the Brussels IV election clause if relevant. Coordinate this with your home-country will.
3. Make or update your home-country will, explicitly limiting it to non-Spanish assets.
4. Keep a clear record of your wills - who holds them, where the originals are, which lawyer to contact.
5. Check your beneficiary designations on life insurance policies, pension funds, and any accounts that pass outside the will (these often pass directly to the named beneficiary regardless of what a will says).
6. If you have significant assets going to people outside Group I/II, consider whether lifetime gifts (donations) make sense - but be aware that gifts of Spanish property are also taxable under the Impuesto sobre Sucesiones y Donaciones, and there are other rules.

After a death (for heirs):

1. Get a Spanish death certificate (certificado de defuncion) from the Registro Civil.
2. Request a certificate from the Registro de Ultimas Voluntades (allow 2-3 weeks, requires a certified copy of the death certificate).
3. Obtain the original Spanish will from the notary named in the registry certificate.
4. Appoint a Spanish lawyer to handle the Spanish succession (inventory of assets, tax declaration, title transfer).
5. File and pay inheritance tax within six months of the date of death (request an extension if needed - this is almost always granted but must be applied for before the deadline).
6. Notify the home-country adviser to handle the non-Spanish estate separately.