Sometimes clients get upset with their lawyers. Its something inevitable, like rain in September or Germany classifying for the world-cup semifinals even when they have an average football team.

Sooner or later a lawyer needs to tell the client that what he/she wants to do is not practicable or could create unnecessary liabilities. This week, a client whose Spanish Will I was drafting did not like my advice. She had no spouse nor kids and wanted to leave her Spanish assets (namely a property, shares and a bank account) to several UK charities. A beautiful gesture that is probably easy to implement in the UK but a real nightmare when trying to do the same in Spain.

My client, Miss K, had recovered from a tough cancer and she was extremely grateful to the charity that helped her in her recovery. In the absence of immediate family she wanted to reward the said charity and other similar charities with her assets in the UK and Spain. However, Miss K could not understand why appointing the charities as beneficiaries of her assets in Spain was not a good idea.

In a video-call that lasted nearly an hour I summarised to my client why it would more preferable for her to perhaps leave her Spanish assets to her nice and nephews than a UK Charity. Let´s see why. First of all, any entity that inherits in Spain, whether this is a company, an association or a charity requires to obtain a tax number called NIF/CIF and also a tax number for the director that will represent the company, this one called NIE. The latter is not a problem. Any Spanish lawyer can obtain one for his client if provided with a Spanish Power of Attorney and a full copy of the director´s passport. However, in order to obtain a NIF/CIF for the entity it is necessary to translate and legalise the corporate documentation. This is not much of a problem with a company. A certificate of good standing can be obtained through Companies House and in most circumstances this should suffice. The matter complicates with a charity as very often they are not registered in Companies House. This can lead to having to translate and legalise the charity´s original documents of incorporation which is not always accepted by the Spanish Authorities. Lawyers with the right expertise will find their way around the system and eventually get the so called NIF/CIF but this usually comes at a high price.

Secondly, if the deceased had bank accounts, shares or funds in Spain, Spanish banks will demand that a bank account is opened in the name of the charity prior to being able to transfer the funds back to the charity´s account in the UK.

If dealing with the Spanish tax office, the Notary or even the land registrar was difficult, dealing with the Spanish bank could be a pure odyssey. Their legal department will request numerous documentation and the process of opening a bank account, a fund or an investment for a foreign charity could end up taking months.

Very often it is the endurance and persistence of the lawyer what makes the miracle happen. Spanish banks are not interested in opening a bank account for a complicated, different structured foreign charity, when the account will be closed shortly after. They therefore procrastinate until the lawyer raises a complaint and, ta-dah!, the procedure is resumed and eventually completed. Yes, complaints do help.

Last but not least, there is another reason: tax. Ah, our ever present foe. I think it was Mark Twain who said

“The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.”

Taxes are needed. There is no doubt about it but Spanish Inheritance tax is not precisely very fair. A tax system that rewards kindship and penalises lack of it. Basically, in Spain if there is no kinship between the deceased and the beneficiary the tax bill can be astronomical. The fact that the charity is from outside the EU does not allow to apply certain tax exemptions that other EU charities would benefit from. In a nutshell, tax wise makes no sense to leave Spanish assets to a UK charity.

My client left the video-call with the frustration that comes with not being able to dispose of her assets as she wished and promised to consider her options and revert to me next week.

Personally, I think she will most likely continue with her plan of leaving her Spanish assets to the UK charities. She was very grateful to the work that the aforementioned cancer charity did when she was very ill and there is nothing that would make her happier than to help such organisations. I also had the feeling that her relationship with her niece and nephew was not very close.

Should the good hearted Miss K decide to appoint a charity as beneficiary, my final advice will be that she only appoints one charity. At least this would simplify the process and reduce the costs.

Obviously, the client can then decide what she thinks best and I will gladly follow her instructions. In the end, we lawyers advise, guide and recommend but the decision ultimately falls on the client and if the client makes a decision well informed, then whatever decision is made, it will be right one.