Practical Legal Notes - June 2024

1.- It is possible to donate assets from an inheritance subject to the rules of administration.

Attached (HERE) Resolution of the Direcció General de Dret, Entitats Jurídiques i Mediació of June 4, 2024 (BOGC of June 12, 2024), in which the DG resolves a case related to a deed of donation, previously coming from an inheritance where administration rules had been established. In the case in question, a gentleman, in his will, appoints his daughter as heir, but also appoints a sister of said heiress as administrator of all the assets of the inheritance, also establishing that in relation to the real estate, the administrator may rent, alienate or encumber them without judicial authorization.

Once the deed of donation of that property (granted by the heiress and her sister administrator) was presented to the Registry, the Land Registrar refused to register it, alleging that the heiress is absolutely forbidden to dispose of the property and that, likewise, the inheritance rules established by the deceased (her father) do not authorize the administrator to complete the donor's consent to perform acts for free (i.e. a donation).

Upon appeal, the Directorate General revoked the qualification note, considering that if the testator has foreseen that the administrator may dispose of the assets and, likewise, has not established an express prohibition in relation to gratuitous acts, nothing can prevent the administrator, with the consent of the heir, from donating the property in question.

Testamentary dispositions to relatives of the spouse after a matrimonial crisis also become ineffective.

Attached (HERE) Resolution of the Direcció General de Dret, Entitats Jurídiques i Mediació of June 7, 2024 (BOGC of June 17, 2024), in which the DG resolves a case related to an inheritance coming from a gentleman who, being married, granted a will, in which he designated his wife as heir, with vulgar substitution in favor of his descendants, and in the absence of spouse and descendants, he instituted heirs of half of the inheritance to his parents, in equal parts, and with the right to increase among themselves, and the other half of the inheritance to his parents-in-law (that is, the parents of his wife at the time) , also in equal parts and with the right to increase among themselves. And in her absence, he replaces them vulgarly by their respective descendants. This gentleman, years later, divorces and subsequently dies.

After his death, his blood nephews and nieces (from "his family branch"), accept the inheritance, and present the same to the Land Registry for registration, and the Registrar refuses the registration, understanding that in the specific case, there is a problem of interpretation of the will, in such a way that, as the designation of those "parents in law" (that is, the parents of his ex-wife) is made in a nominative way (by their name and surnames), it could be interpreted that, in the context of the will, the divorce is not a cause of ineffectiveness of that substitution.

After the corresponding appeal, the General Directorate aligned itself with the appellant Notary, determining that, in accordance with art. 422-13.4 of the CCCat, once the divorce has taken place, the appeal to the "in-laws" (in-laws and their substitutes) becomes totally ineffective.

3.- Beware of waivers of inheritance rights, since substitutes must also be taken into account.

Attached (HERE) Resolution of the Direcció General de Dret, Entitats Jurídiques i Mediació of June 11, 2024 (BOGC of June 19, 2024), in which the DG resolves a case related to an inheritance that is being settled by virtue of a succession agreement, in which, a Mrs., In this case, the DG resolves a case related to an inheritance that is being settled by virtue of a succession agreement, in which a lady pre-allotted half of the bare ownership of an estate to one of her two daughters, together with a residuary trust substitution in favor of the 4 grandchildren of the testatrix (that is, the children of the daughter to whom the estate was pre-allocated), in equal parts, and these in turn substituted by their descendants by lineage.

Once the inheritance has been accepted by the daughter, and her right has been registered in the Land Registry, the 4 grandchildren (i.e., the trustees), grant a deed of renunciation of the residuary trust, in which they effectively renounce the same. Presented to inscription in the Registry, the Registrar of the Property denies the inscription, alleging that in the presented document, the participants renounce to the residuary trust, but this does not cancel the trust, since the vulgar substitution exists for their descendants.

The General Management on this occasion aligns itself with the Registrar, confirming the qualification note, by determining that, in accordance with art. 426-7 CCCat, "the testator may provide for a vulgar substitution in trust for the case that the called trustee does not become a trustee so that he cannot or does not want to", so that, if the called trustee renounces the trust, the vulgar substitute is also a trustee.

4.- Inheritance agreement and divorce. Ineffectiveness of the same

As a result of a case recently occurred in the office, it is recalled that, in accordance with the provisions of art. 431-17.2 CCCat, the inheritances or the particular attributions made in favor of the spouse or of the cohabitant in stable partnership, or of the relatives of these, unless the contrary has been expressly agreed or it results from the agreement, become ineffective if, after having been granted, the spouses separate in fact or legally, or get divorced, or the marriage is declared null, as well as if at the moment of the death there is pending a lawsuit of separation, divorce or matrimonial nullity, except for reconciliation.

In the case of a stable couple, they become ineffective if, after having been granted, the partners separate in fact, unless they resume their cohabitation, or the union is extinguished for a cause other than the death of one of the partners or marriage between them.

This also applies to relatives who are only related to the spouse or cohabitant, in direct line or in collateral line within the fourth degree, either by consanguinity or affinity.

5.- The Golden Visa and its final announcement

It is recalled that recently, through a parliamentary group, and with the support of the Government, the processing has been initiated for the elimination of the so-called "Golden Visa" currently provided for in art. 63.2.b) of Law 14/2013, which recognizes the possibility that a non-resident foreigner can obtain a visa for stay / residence in Spain if he/she acquires a property in Spain with an investment of value equal to or greater than 500,000 euros per applicant.

Although the measure is still in force (i.e., current buyers can continue to benefit from it), it is expected to be repealed in the coming months, which may have a negative impact on the high-end real estate market. To take into account and, where appropriate, inform clients about it (real estate agencies, potential buyers, etc.).

6.- Temporary extension of the deadlines for registration in the land registry.

It is recalled that, in accordance with the Resolution of the General Directorate of Legal Security and Public Faith of July 7, 2023 (HERE you can consult the same), once the so-called Electronic Registry has entered into force, by Law 11/2023, on a temporary basis, and until July 31, 2024, the term for the qualification and dispatch of documents in the Land, Mercantile and Movable Property Registries has been extended by 30 working days.

That is, 45 working days, of which 15 days correspond to the ordinary term + 30 days to the term provided for in the Resolution.

Furthermore, in accordance with the Resolution of the aforementioned Directorate General of June 19, 2024 (HERE you can consult it), the deadline for the qualification and dispatch of the documents is extended by 15 working days :

• Filed and pending clearance as of July 31, 2024, provided that their ordinary qualification and clearance period had not expired on that date (extension cumulative to the extension of the deadline of the Resolution of July 7, 2023).

For example, a document filed on July 29, 2024 will have a clearance period of 60 working days (15 of the regular deadline + 30 of the deadline of the Resolution of July 7, 2023 + 15 of the Resolution of June 19, 2024).

• To be filed from August 1 through August 31, 2024.

For example, a document filed on August 1, 2024 will have a clearance period of 30 working days (15 of the regular deadline + 15 of the Resolution of June 19, 2024).

These extensions, combined with the 10 working day period for notification of the act provided for in the common administrative law legislation, will lead in the coming weeks and months to a very significant extension of the registration period for documents filed in the Property, Mercantile and Movable Property Registries.

7.- What is registered in the Spanish property registry is governed by Spanish law.

Attached (HERE) Resolution of the General Directorate of Legal Security and Public Faith of April 9, 2024 (BOE of April 26, 2024), which has been analyzed in the recent WebiNots of the Association of Notaries of Catalonia dated June 26, 2024. It analyzes a case of private international law, in which a German deceased dies having granted a will in Germany (and German law being applicable to his succession), in which he appoints his children as heirs, and also appoints an executor.

In a first act, the heirs accept the inheritance of their father, which is registered in the Spanish Land Registry (i.e., the heirs are registered as owners of the estate in Mallorca). And, in a second act, the executor sells this estate to a third party (this being so because, according to German law, the executor is entitled to represent the community of heirs and to carry out acts of disposition).

However, the Land Registry refuses the registration applying the lex rei sitae, that is, based on the basic principles of Spanish registry law (principle of protection of the registered owner and of successive tract), by virtue of which the executor is not the registered owner of the estate with the power to sell the property, since its registered owners are the heirs, regardless of what German law may say.

After the corresponding Appeal, the General Directorate aligns itself with the Registrar, confirming that, once the heir's right is registered in Spain, the foreign law exhausts its effects and applies the lex rei sitae, so that as the property is already registered in the name of the heirs, they are its owners, and the executor no longer has the power to sell it.

In any case, this position is questioned or qualified by the specialists who analyze the Resolution in the seminar.

8.- Public documents of countries belonging to the European Union, in matters of inheritance, do not require an apostille.

Attached (HERE) Resolution of the General Directorate of Legal Security and Public Faith of November 23, 2023 (BOE of December 14, 2024), which has been analyzed in the recent WebiNots of the Association of Notaries of Catalonia dated June 26, 2024.

It analyzes a private international law case, in which the controversy is mainly about the need or not for public documents in matters of inheritance coming from a foreign country belonging to the European Union to bear the apostille required by the Hague Convention No. XII, of October 5, 1961, nor legalization.

The Directorate General, in its Resolution, determines that, on the basis of Article 74 of the European Inheritance Regulation, regarding "legalization and other similar formalities", no legalization or similar formality shall be required for documents issued in a Member State within the framework of this Regulation".

Thus, in these cases (e.g., a declaration of heirs issued by a German authority), it will not be necessary to request the apostilled documentation.

9.- Inheritance and taxation. Limitation periods to be taken into account

Attached (HERE) Judgment 2437/2024, of Chamber III of the Supreme Court, which deals with taxation in inheritances in which the right of transfer comes into play.

In summary, the judgment resolves that, in those cases in which the heir dies without having accepted or repudiated the inheritance of the deceased, transmitting this right to accept or repudiate to his heirs, the period for the prescription of the right of the Tax Administration to liquidate the Inheritance Tax, is counted from the moment of the death of the second causer or transmitter, and not from the death of the first deceased.

In addition, it is necessary to take this ruling into account, because the expiration or not of the statute of limitations period determines the type of acceptance of the inheritance that can be carried out. If it is considered that the statute of limitations period has elapsed, the inheritance can only be accepted purely and simply and not for the benefit of inventory, with the consequences that, from the point of view of liability, this entails.

10.- Controversy with the electronic matrix and the notary's minutes

Recently, a controversy has arisen among certain financial entities in relation to the notarial minutes of public instruments, in particular, with regard to the charge of the diligences to be included in the matrix, derived from the additional actions imposed by the implementation of the new electronic protocol. This controversy is centered on the fact that, according to the interpretation of said entities, the new fee items related to the electronic protocol are services that have not been expressly requested by the entity, so that it is not appropriate to include them in the fees paid by the bank.

In contrast to this interpretation, it is necessary to specify that the new legislation introduced by Law 11/2023, of May 8, on the digitalization of notarial and registry proceedings (HERE you can consult it), obliges Notaries to carry out a series of additional actions when authorizing all kinds of public instruments, i.e., their incorporation into the electronic protocol, their comparison with the original matrix (in order to ensure the concordance between both documents) and, finally, their deposit in the database established for this purpose by the General Council of Notaries, which must be recorded in the public instrument by means of a diligence (art. 17.2 of the Law of Notaries).

Taking into account thethree obligations described above that the new legislation imposes on the Notary Public, all public instruments that are authorized must include these "incorporation ", "collation" and "deposit" diligences to show that these obligations that the law imposes on the Notary Public have been duly fulfilled, generating the corresponding fees provided for in Royal Decree 1426/1989, of November 17, which approves the Notaries' Tariffs (HERE you can consult the same), that is, 3.01 Euros each one of them, being in total 9.03 Euros.

Attached (HERE) a detailed description of the controversy and the legal analysis of the matter by the Notarial Office.