Succession agreements in Spanish common and regional law
Succession agreements present serious problems in Spanish common law, since they are prohibited by Article 1271 of the Civil Code (CC), which prohibits legal transactions concerning future inheritances. However, case law has softened this prohibition, considering that it refers only to those that concern the whole of the inheritance or a share of that whole, but not to those affecting known, specific and existing assets.
Succession agreements in regional civil law
By contrast, succession agreements are recognised in the regional civil law of several autonomous communities, such as Catalonia, Aragon or Galicia. These agreements allow present attributions, which means that the future heirs or legatees can acquire specific assets of the future deceased from the moment the agreement is entered into, reserving the rest of the estate for the time of the latter’s death.
Tax treatment and will with a residuary trust (fideicomiso de residuo)
These lifetime attributions are treated for tax purposes as acquisitions “mortis causa”, so that they may benefit from all the tax advantages that apply.
On the other hand, the residuary trust (fideicomiso de residuo) is particularly interesting where there are no descendants. It is common for spouses to make wills, appointing each other as heirs, even with power of disposal by acts inter vivos, without needing to order real subrogation in respect of what is disposed of. In these cases, it is usually provided that, on the death of the surviving spouse, the remaining assets pass to relatives of the testator, such as nephews and nieces.