GeniB

Hi We realised recently that our will ...made eight years ago ...is no longer reflecting our wishes. We had done the usual and left everything to our immediate family.. since that time we have gained a grandchild .. Seems simple.. Add her to the list. However to do that we need to drop some more distant relatives from the list..No problem.. The problem seems to be insuring that the granddaughter actually gets some of the inheritance .. which will be ..if things continue as they are... quite substantial over time. The fly in the ointment seems to be that in Portuguese law,inheritance follows the Napoleonic law we were in fact used to during our many years in NL. A law I actually approve of. The snag is that my ED isn't married to her ( third) partner ,but it seems increasingly popular that partnerships over three years allows for a right to inheritance ( true or not ? ) We really like her present partner ...but would be very unhappy should this relationship break down ( after our death ) and he would be able to take half of my ED's inheritance on to another relationship .. Thus depriving our GD of her rightful share. .People have said.. 'Just make a trust for her ' We look into it and it seems these days its extremely complicated and expensive to do.. also requiring trustees .. We might be looking at possible leaving a substantial sum.. but not enough to warrant that we feel.
Should we resurrect our UK will of over 40 yrs ago and re-make it? Do you need an address in the UK to do that ?
Should we 'somehow' make it clear in this Portuguese will that nothing is to go to our ED's partner ( unless they marry ..is that old fashioned and does it make any difference ) As said we like him a lot . He, personally ,is a great guy and great father ,we would hate to hurt him and make him think we disliked him.. Its a law thing ,something that generation isn't bothered about . We are just trying to protect our GD's future

I might seem a tad paranoid here.. ( I am ) but i have actually experienced this myself.. When my father re-married after 29 yrs of marriage to my mother.. He had another 26 yrs with my lovely Step-mum ..On her death , everything went to her two sons. They generously allowed us to take a small momento.. but all my mothers jewellery and personal possessions went to these guys partners. This is allowed under British law. Something that hurt and stunned me at the time. ... Something to think about eh.

TonyJ1

Basic law - as a Portuguese resident you may opt for your inheritance to devolve in accordance with your personal law as the UK 'opted' out of the 'Brussells IV agreement (basically the EU governing death and taxes within the EU) - this has to be done in writing.

In short, you may draw / revive a previous will - but you need to make it clear that this is your last will and testament.

As a side issue, under the Portuguese inheritance laws, if there is no will, the inheritance will be by children etc

Warning - if the inheritance is ruled by British law, the estate might be subject to UK inheritance taxes - Portuguese inheritance taxes does not apply if the assets pass on to children / grandchildren - I suggest you get expert advice on this - not many competent experts on cross border issues

GeniB

Thanks for advice Tony 11 Seems no one else has one across this problem thus far .We see our lawyer next week so hopefully ha can give us more advice

wellinever

So lets say you have a will in Portugal where you leave a property in Portugal, that you had owned for 20 years. Its original cost to you was €200,000 all in.
When you die and its transferred (left) to your single child, who has no interest in owning a property in Portugal and sells it immediately for €400,000.
What tax liability would there be for the child as a non resident of Portugal??

scot47

Just go down the pub and ask your pals.

OR you could get legal advice.

Which do you think is better ?

wellinever

so i guess you don`t know??

TonyJ1

For Portuguese tax purposes, the value will be based on the 'valor patrimonial' (tax value) at the date of death - though there is no tax on estates - there is a catch, specially where there is a large discrepancy between the 'real' value and the tax values of properties.

liveaboard

It happens all the time; happened to me too. Mt grandfather was very wealthy, remarried, he dies first, then her kids got the lot.
Other grandad also lost his fortune due to a weird clause in someone else's will that allowed it to be legally siphoned away.

I know a guy who had a rich brother who hated him; it was assumed his wealth would go to his young wife, then her kids. But she died just before him.
So the estranged brother got it instead. Lucky for him, not so much for the stepkids.

Get a lawyer, make a will.

GeniB

Hi Live... We have a lawyer .. Not sure he is up on International law though... We will have to do some more digging .. My brother who has lived around the world and used Lawyers in the UK ,America , Finland and Malta.. tells me we would be liable for tax on the Time Share we own in the UK... It's only for a week a year.. Surely thats not considered under 'domicile' ? Life does get complicated when your an ex-pat

Yikes your poor Grandfather .. how on earth does someone else's will affect his personal wealth?... Was it Dutch ?...

liveaboard

American, this was long ago, the '70s or 80s. He was partner in a mid sized firm; the deal was that on the death of the principle, he and another person would each get half the firm. But the principle didn't die all at once, he was in a coma for a long time. The other partner had power of attorney and simply sold it all to himself.
That wouldn't be legal today, but it was at the time.
So my granddad went from being a millionaire to living on social security. He used to buy a new car every year, but kept the last one for 20.
Funny thing, I think it was good for him; he became a lot more approachable after that. We got on better when he was poor.

These things are always weird and not how you expect.

You could ask your embassy to recommend a lawyer who'd familiar with UK / PT inheritance law, but if you have property in a third country in can become diabolical.
I've had wills drawn up in NL for our property there, the firm was very large and seemed competent. It was a long time ago but I can find the name if you want it.

Eurofinesco is pretty good at this sort of thing, they're really good at the multi-national tax stuff for a price that is affordable for regular people.
I've sat down with the boss [at no charge!] and posed some pretty tough questions; he seemed to relish the challenge of figuring it out.

TonyJ1

Each case depends on the facts - and everything 'depends'. Under Portuguese law, if married by community of property (as in any other equivalent regime), the estate will be split down the middle on death - all the descendants (and the wife will inherit a minimum of 1/ of this) from the half belonging to the deceased. Off course where there is money and property, maneuvering, cheating (not unique to Portugal) will likely happen (read the latest book by Maria Trump) and it is not unknown that children / grandchildren of prior marriages tend to be done in. In other marriage regimes, have to look at pre nuptial contracts / settlements etc - but this also applies in Australia, UK, etc.
Often happens that some of these estates are 'maneuvered' - often by a younger partner, and this is easily done - think for a moment of a typical scenario - younger partner works and saves every cent, the income and assets under the control of the older partner are used to maintain the family / holidays / etc - younger partner ( with no or little assets) builds up assets while older partners assets reduce - on death (presume the older partner dies first (not guaranteed) - a lot of the assets has passed on to the younger partner - difficult to challenge by descendants of previous marriage/s - seen this happen over and over

wellinever

But presumably then Mais Valias comes in and you pay 28% of the difference ie €56,000 in tax.
SO although there is no inheritance tax to a close relative (ie son) he is liable for the tax if and when he sells !!

TonyJ1

That is the way it goes. 'Advertised' as no inheritance taxes. There are ways around it, though not easy. Consult a good tax planner.

In respective of relative iro inheritance taxes - if inheritance goes to brothers, nephews, etc - there is an inheritance tax, though it is administered as a stamp duty

wellinever

yes you can get around it (legally), by reinvesting the €400k in any EU country, but you have to be a resident of somewhere in the EU to get that option, and then you are stuck with another property that you may not want, and if British it cant be in the UK after end 2020.
So bit of a stitch up, just like the Dutch are trying to do with Unilever, who want to relocate the whole company to the UK from Holland, but the Dutch are demanding €11 billion for the privilege of moving out of Holland.....`Hotel California`....sorry meant Hotel Europa

GeniB

Hi live thanks for the offer. We have had a business in the Netherlands plus fancy lawyers etc ..Now happy to be finished with it all. Like climbing out of a pot of glue. Have no wish to return to that .We have an appointment with our tax lawyer here end of next week so we will see what they have to say.. Thanks for suggestions ..