Succession in the sun: Inheritance tips for people who own property overseas
When the sun sets on a family’s legacy, the question isn’t just how to pass on assets, but why — and what happens if the rules don’t align with your intentions. For Irish expats and homeowners in the EU, the stakes have never been higher. A generation of families once insulated by local laws now face a labyrinth of foreign jurisdictions, tax codes, and cultural norms that can unravel even the most carefully laid plans. What many people don’t realize is that the same rules that protect their wealth today may quietly undermine their future. This isn’t just about tax; it’s about trust, clarity, and the fragile balance between tradition and modernity.
The Myth of ‘Well, I’ll be gone’
Emma Heron, head of Whitney Moore’s private client department, paints a vivid picture: ‘It’s a common illusion that only ultra-high-net-worth families face these complexities.’ But the truth is, anyone with a foreign asset — whether a holiday home in Spain or a business in France — could find themselves in a legal mire. The assumption that EU succession rules (like those in Spain or France) apply here is a dangerous shortcut. If a couple leaves their French villa to each other, thinking Irish law will stretch across borders, they’re ignoring a key rule: Irish law governs assets held in Ireland, and foreign laws may not automatically apply. This creates a ticking time bomb: unintended beneficiaries, delayed probate, and the risk of a will being contested. Heron notes, ‘It’s probably an illusion among people that it really only affects ultra-high-net-worth families.’ But the reality is far more widespread.
The Hidden Cost of ‘Not Knowing’
In the 1990s, a wave of overseas property purchases in Ireland created a generation of families grappling with the same questions today. The reluctance to make wills — a practice once seen as a mark of sophistication — is now a cultural norm. Why? Because the idea that a will is a ‘last resort’ is outdated. Heron explains, ‘People assume they’ll be gone, so they don’t think about it. But they might be planning their estate on false assumptions.’ The problem isn’t just legal; it’s psychological. Fear of the unknown, or a belief that ‘it’s too late,’ leads many to leave their affairs to chance. Yet, as McGough, a solicitor in Co Donegal, warns, ‘If you can do it when it’s not at a crisis point, it’s calmer, easier, and done better.’ The cost? Delayed decisions, hidden taxes, and the risk of a will being invalidated by a court.
The Legal Labyrinth: Forced Heirship and Double Taxation
One of the most insidious challenges is forced heirship. In civil law jurisdictions like Spain, if a person dies without a will, children are automatically entitled to inherit, above spouses. This can trigger inheritance tax and spark disputes over who gets what. Heron clarifies, ‘It’s not just about tax—it’s about family dynamics.’ For example, a property owner might intend to leave a villa to a partner but, under local law, it goes to the first spouse’s children. The result? A tangled web of legal battles, tax liabilities, and emotional strain. McGough adds, ‘Selling the asset might be one option, but it can bring other issues—tax reasons alone make it better to hold on to it.’
The Art of Planning: Beyond the Will
Planning ahead isn’t just about avoiding taxes; it’s about shaping the future. Heron emphasizes, ‘You can try to structure your will so that Irish law applies.’ This means careful wording to clarify that foreign assets are governed by Irish law. But the final decision often rests with the jurisdiction where the asset is located. For instance, if a property is in Spain, the Spanish law will take precedence. ‘Ideally, get your Spanish solicitor, tax advice, and will in place there,’ McGough advises. This approach not only simplifies administration but also reduces the risk of disputes. The cost? It’s a small price to pay for peace of mind.
The Broader Implications: Tradition vs. Modernity
This issue isn’t just about individual families. It reflects a deeper tension between tradition and modernity. In Ireland, where heritage is deeply rooted, the challenge is to preserve that legacy without letting legal complexity overshadow it. The reluctance to make wills, once a sign of sophistication, now feels like a relic of the past. Yet, as McGough notes, ‘There’s a reluctance to come in and talk about wills.’ This hesitancy stems from a fear of confrontation, but it’s a barrier to clarity. The solution? Proactive planning, not reactive crisis management. Heron concludes, ‘One of the more rewarding elements of this job is that you can almost see the weight lift off people’s shoulders.’ It’s a quiet revolution in estate planning—one that demands courage, knowledge, and a willingness to navigate the invisible threads of inheritance.
