So you’ve just moved, and you want to know more about Succession Law in Portugal? Learn about the legislation which regulates inheritance in the country, and how it works, who is considered a legitimate heir, and what taxes they have to pay.
Who you are going to leave your estate to may not be the first thing on your mind, especially when you have many years ahead of you. But if you are already living in Portugal, or are thinking of moving, then you need to understand how succession law works and how this can affect the decisions you’ll need to make.
If you are not a Portuguese citizen, then you need to know what legislation applies. If you are living in Portugal, then you are subject to Portuguese law. In other words, if you are a habitual resident in Portugal then local law applies even if your estate is also in other countries.
Say you own property in France, and some bank accounts, but since then you bought a house in Portugal and moved here. Following your death, the description of the assets should include all the movable assets and real estate, including financial products and even debts, whether in Portugal or in France.
What different types of inheritance are there?
Portuguese law includes two types of succession: legal and voluntary, the latter being governed by a will.
When there is no will, the goods are divided among children, spouses and parents – referred to in the Civil Code as legitimate heirs.
If you want to dispose of your estate yourself, deciding who gets what, then you need to include all those indications in a will, or a contract.
First and foremost are the spouse and children. If there is no issue, and the person is unmarried, then the inheritance reverts to the parents. If these are also no longer alive, then the search begins for siblings, uncles, cousins or nephews, including relations up to five times removed. In the absence of any legitimate heirs, the estate reverts to the State.
What if you don’t want to leave your children anything?
You are entitled to bestow a share of your estate on whoever you choose, even if they are not related to you, but Portuguese inheritance law does not allow you to distribute all your goods at will. The fact is that you can only dispose freely of 1/3 of your estate, leaving it to whoever you want in your will. This is known as the available quota. The remaining 2/3 are the unavailable (or legitimate) quota and must be divided among spouse, issue and forebears (parents, grandparents and great-grandparents). These relatives are always entitled part of the estate and cannot be disinherited, regardless of the wishes of the testator.
The available and unavailable quotas vary depending on the number and nature of the heirs.
- If there are no descendants or forebears, the spouse is entitled to half of the inheritance;
- If there is no spouse, the children are entitled to half of the inheritance;
- If there is no spouse or issue, then the forebears are entitled to half or 1/3 of the inheritance, depending on whether they are parents or grand-parents.
The unavailable quota is calculated based on factors such as the value of existing assets at the time of death, donations made during one’s lifetime to descendants who are heirs and who, therefore, are required to restore them to the general inheritance and debts which pertain to the inheritance.
In order to establish if there was or wasn’t a will at the time of death, one must request a certificate from the Institute of Registries and Notaries. This can be done online.
If the owner of the estate is going through a divorce process at the time of death, the spouse is not to be included in the inheritance.
Direct heirs free of tax
Portugal’s succession laws foresee the payment of a tax duty of 10% on the value of assets located in the country. However, not all heirs need to pay this tax. Spouses or civil partners, children and parents are exempt. The remaining beneficiaries, regardless of being related to the person at hand, have to pay the tax.
To sum up, this is what needs to be done after the death is declared:
- Death certificate. The first point of order is to register the death at the civil registry within 48 hours.
- Certification of heirs. This is required when there is no will. Generally it is the obligation of the oldest heir to handle this procedure, which can be done at the National Registry or the Inheritance desk.
- Inform the treasury. The family has three days to inform the treasury of their relative’s death. They will need to present a death certificate and the ID of the deceased and respective heirs.
- Division of assets. If the heirs come to an agreement, then the assets can be divided at the registry or the Inheritance desk. If no agreement can be reached, then the issue will have to be resolved litigiously.