ELS-0021Money · Spain

The Great Wealth Transfer Is Not Guaranteed: What Expat Families Need to Understand

Official sources checked
Written by Sue Berry
Practical guidance

Your home, savings and pensions may look like a substantial legacy, but care costs, debts, taxes, property expenses and cross-border administration can reduce what eventually reaches your family.

The Quick Answer

The value of everything you own today is not necessarily the amount your family will eventually inherit.

Savings may be used during retirement. Property may need repairs or have to be sold. Healthcare, care, debt, taxes, professional fees and ordinary living costs can all reduce an estate.

For expats, there may also be additional expenses involving:

property in Spain;

accounts in the UK and Spain;

currency transfers;

wills in more than one country;

legal and tax advice;

translation;

family travel;

cross-border estate administration.

An inheritance should therefore never be treated as guaranteed money.

Good legacy planning is not about preserving the largest possible amount for your family. It is about protecting yourself during your lifetime and leaving clear, organised information for the people who may eventually need to help.

Why This Matters

There is a great deal of discussion about the enormous amount of wealth expected to pass from older generations to their children and grandchildren.

However, the value of an estate can change considerably before it reaches the next generation.

Assets may be reduced by:

mortgages and loans;

normal retirement spending;

private healthcare;

home care or residential care;

property maintenance;

taxes;

professional fees;

funeral costs;

exchange-rate movements;

selling costs;

gifts made during the owner’s lifetime;

charitable gifts;

administering an estate in two countries.

For expat families, the situation may be more complicated because property, money, documents and family members can be spread across the UK, Spain and the Canary Islands.

Families should be careful about planning their own financial future around an inheritance that may arrive much later than expected or may be smaller than anticipated.

Frequently asked questions

Will my family inherit the current value of my estate? Not necessarily. Debt, living costs, care, tax, professional fees and property expenses can reduce what eventually passes to beneficiaries.

Does a €250,000 property mean my family receives €250,000? No. Mortgage debt, repairs, taxes, community fees, legal costs, estate-agent fees and selling expenses may all reduce the amount available.

Should my children rely on receiving an inheritance? No. An inheritance may arrive later than expected and may be smaller than anticipated. It should not be treated as guaranteed income.

Do I need both a UK and a Spanish will? Many expats use separate wills for different assets, but they must be carefully drafted so they work together. Obtain cross-border legal advice.

Can one will accidentally cancel another? Yes. Poorly worded revocation clauses can create problems. Each will should clearly state which assets and jurisdictions it covers.

Does living in Spain remove UK Inheritance Tax? Not automatically. Your residence history and personal circumstances may still create a UK tax connection.

Is an unmarried partner automatically protected? No. Unmarried partners should check inheritance rights, ownership, tax treatment, pensions and rights to remain in the home.

Should I give assets to family during my lifetime? Lifetime gifts can be helpful, but they should not leave you unable to fund retirement, emergencies or future care. Tax advice may also be needed.

What happens if my children do not want my Spanish property? The will and estate plan should allow for a practical sale or other arrangement rather than assuming the family will keep the property.

Do my family need to know exact account balances? Not necessarily. They should know what accounts and assets exist, who the relevant professionals are and where the documents are stored.

Should I write down my passwords for my family? Do not keep exposed passwords in an unsecured record. Provide safe instructions explaining where secure access information is held.

How often should I review my legacy arrangements? Review them at least once a year and after major changes involving health, relationships, property, residence, gifts or family circumstances.

Important — Read Before You Act

Cross-border inheritance can involve both legal and tax questions.

The law governing who inherits is not necessarily the same as the law determining which taxes are payable.

Do not assume that:

a UK will automatically deals with Spanish assets;

a Spanish will automatically covers everything;

living in Spain removes all UK inheritance-tax considerations;

an unmarried partner has the same rights as a spouse;

children automatically want to keep an overseas property;

jointly owned property will pass exactly as expected;

family promises are legally binding.

Obtain advice from a suitably qualified professional who understands both UK and Spanish succession and taxation.

What To Do — Step by Step

List what you own in each country Create a clear list of assets in the UK, Spain and any other country. Include: property; bank accounts; savings; investments; private pensions; workplace pensions; vehicles; business interests; valuable possessions; digital assets. Record where the relevant documents are kept.
List debts and ongoing liabilities Record: mortgages; personal loans; credit cards; unpaid taxes; community fees; utility balances; property-management costs; business debts; guarantees or financial commitments. The amount a family inherits is based on the estate after debts and expenses have been dealt with.
Separate property value from available inheritance A Spanish property valued at €250,000 does not mean the family will receive €250,000. Possible deductions may include: mortgage debt; repairs; community fees; local taxes; utilities; insurance; estate-agent fees; legal and notarial costs; inheritance tax; selling expenses; currency-transfer costs. Property may also take time to sell, creating further ongoing expenses.
Allow for retirement and care costs Savings may be needed for: ordinary living expenses; maintaining the home; private healthcare; mobility equipment; help at home; residential care; travel to see family; emergencies; supporting a spouse or partner. Retirement money should first provide security and quality of life for the person who earned it.
Review your UK and Spanish wills Check: whether both wills are current; which assets each will covers; whether one will could accidentally cancel the other; which law you have chosen to govern succession; whether executors are still suitable; whether beneficiaries remain correct; where the original documents are stored.
Check which succession law may apply The law governing succession may depend on: habitual residence; nationality; any formal choice of law included in a will; the type and location of assets; personal and family circumstances. The law determining inheritance rights is separate from inheritance-tax rules.
Check potential UK and Spanish tax exposure Ask a cross-border adviser: whether UK Inheritance Tax may apply; whether Spanish inheritance tax may apply; whether regional Canary Islands rules are relevant; whether tax relief may be available; which beneficiaries may face tax; what deadlines apply; what records will be needed.
Protect the surviving partner Consider whether the surviving spouse or partner will have: somewhere secure to live; access to sufficient income; access to bank accounts; authority to manage property; enough money for healthcare and support; time before major decisions must be made; clear pension information. The surviving partner may need most of the estate for many years before anything passes to children.
Take extra care if you are unmarried Unmarried partners should not assume they have the same rights as married couples. Check: ownership of the Spanish home; rights to remain in the property; inheritance rights; tax treatment; pension nominations; access to bank accounts; powers of attorney; provision in each will.
Discuss broad expectations with family Families do not necessarily need to know exact balances. They should understand: what types of assets exist; whether there are debts; whether property may need to be sold; who has been appointed to act; where wills are stored; whether lifetime gifts have been made; how a surviving partner is protected; what should happen to pets; whether special possessions have been promised. Clear conversations can prevent unrealistic expectations and conflict.
Ask whether your children actually want the property Before promising a Spanish or Canary Islands property to family, ask: Do they want to keep it? Can they afford the running costs? Will they use it? Could several beneficiaries manage it together? What happens if one wants to sell? Is holiday letting permitted? Does the property need major repairs? Could it need to be sold to fund care? A loving promise can become a practical burden when the details have not been discussed.
Record lifetime gifts Keep details of substantial gifts, including: who received the gift; the date; the amount or asset; the reason; any conditions; professional advice received; supporting documents. This can help executors, beneficiaries and tax advisers later.
Organise property information Keep together: deeds; ownership details; mortgage information; community administrator details; insurance; utility providers; property taxes; keys and access instructions; local repair contacts; management arrangements; holiday-let information where relevant. This becomes especially important when family members live in the UK.
Organise financial information Record: UK and Spanish banks; pensions; investments; savings; regular payments; currency-transfer arrangements; debts; financial advisers; accountants; insurance policies. The family should know where to find the information, even when they do not know exact balances.
Organise legal information Record: UK and Spanish wills; executors; solicitors; notaries; powers of attorney; advance decisions; document locations; funeral wishes; important legal correspondence. Make sure the people appointed to act know they have been chosen.
Organise digital assets and memories Create instructions covering: important email accounts; cloud storage; photographs; social-media accounts; websites; domains; business systems; subscriptions; digital wallets; online payment services. Explain: which accounts should be preserved; which should be closed; where secure access information is held; who has authority to act; where memories are backed up.
Create practical family guidance Record: who should be contacted first; local trusted people; pet-care arrangements; funeral wishes; access to the property; where keys are held; family travel information; important personal possessions; urgent bills; local professional contacts. A will cannot provide all the practical information a family may need.
Choose executors and trusted people carefully Consider whether the people appointed: understand your cross-border situation; are willing to act; know where documents are kept; can communicate with professionals; can travel if required; are likely to work well together; have current contact details. Review these choices when relationships or circumstances change.
Ask the right professional questions Discuss: Which country’s succession law is likely to apply? Should I make or update a Spanish will? Does my UK will work alongside it? Could either will unintentionally revoke the other? Could UK Inheritance Tax affect my estate? What Spanish inheritance tax might apply? Is my spouse or unmarried partner protected? What happens to jointly owned property? Should beneficiaries inherit the property or sale proceeds? Are lifetime gifts appropriate? What deadlines will beneficiaries face? Which documents may need translation or legalisation?
Review the plan regularly Review your arrangements: once a year; after moving home; after marriage or divorce; following a death; after a major gift; after buying or selling property; when health changes; when an executor can no longer act; when tax or inheritance rules change. An old plan may no longer reflect your current life.

Common Mistakes to Avoid

Believing current wealth equals future inheritance - Retirement spending, debt, care costs, tax and fees may reduce the estate considerably.
Assuming property value becomes cash for beneficiaries - Selling and administration costs can reduce what the family eventually receives.
Relying on one old will - Family circumstances, property ownership and cross-border rules can change.
Assuming children want the overseas property - They may prefer it to be sold or may be unable to afford its upkeep.
Forgetting the surviving partner - The surviving partner may need the assets and income for many years.
Assuming unmarried partners are fully protected - Legal and tax treatment may differ significantly from that of married couples.
Keeping family completely in the dark - Silence can lead to unrealistic expectations and disagreement.
Promising large gifts without checking future needs - Care, healthcare or emergency costs may later make the promise unrealistic.
Leaving documents scattered across two countries - Executors may spend months finding accounts, deeds, policies and contacts.
Ignoring digital assets - Photographs, subscriptions, websites and business accounts can be lost or overlooked.
Writing down exposed passwords - Families need safe access instructions, not an insecure password list.
Waiting until health declines - Planning is easier while decisions can be made calmly and confidently.

Your Action Checklist

List assets owned in the UK.
List assets owned in Spain.
List assets owned in any other country.
Record mortgages, loans and other debts.
Check whose name each asset is held in.
Estimate property selling and administration costs.
Allow for future retirement and care expenses.
Review your UK will.
Review your Spanish will.
Check that the wills work together.
Confirm which law is intended to govern succession.
Check possible UK inheritance-tax exposure.
Check possible Spanish inheritance-tax exposure.
Review how your spouse or partner is protected.
Obtain advice if you are unmarried.
Identify executors and trusted people.
Tell executors where original documents are stored.
Organise Spanish property records.
Organise UK and Spanish bank information.
Record pensions and investments.
List regular bills and payments.
Record professional advisers and genuine contact details.
Record lifetime gifts.
Review promises involving property.
Ask whether beneficiaries want the overseas property.
Create clear pet-care instructions.
Organise funeral and personal wishes.
Record digital accounts without exposing passwords.
Back up photographs, voice notes and family memories.
Discuss broad expectations with family.
Update arrangements after major life changes.
Review the complete plan at least once a year.

In Summary

Current wealth does not always become future inheritance.

A property valuation is not the same as the cash beneficiaries will receive. Savings may be needed for retirement or care. A surviving partner may need most of the estate first. Legal, tax and administration costs can also reduce the amount available.

Expat families should:

list assets and debts in each country;

review UK and Spanish wills;

check how a surviving partner is protected;

organise property and financial records;

make sure executors and trusted people are known;

record digital accounts without exposing passwords;

explain broad intentions to family;

review promises involving property or large gifts;

seek qualified cross-border advice;

update arrangements after major life changes.

The most valuable legacy may not be the largest sum of money. It may be the clarity that helps a family understand what exists, where to find it and what should happen next.

Sue’s final thoughts & experiences

A personal note from Sue Berry

When people hear about a “great wealth transfer,” it can sound as though vast sums are simply waiting to pass from one generation to the next.

Real family life is rarely that simple.

Homes need maintaining. People live longer. Care may be needed. Taxes and professional costs have to be paid. And when families are spread between the UK, Spain and the Canary Islands, even straightforward arrangements can become complicated.

Legacy is not about promising your family a particular amount.

It is about protecting yourself, making thoughtful decisions and leaving enough clarity so the people you love know what exists, where to look and what you wanted.

That clarity may prove more valuable than anyone expected.