If you reside in Portugal or own property or other assets in the country, you should consider having a Will to cover your Portuguese assets.
A Will enables you to make choices regarding the administration of your estate and succession, plan the taxation of your estate, and safeguard any future complications regarding the application of laws in different jurisdictions.
In addition to your will, you can consider signing a Living Will, which allows you to make choices regarding your health and appoint someone to make these choices for you.
Why do I need a Will in Portugal?
A Will enables you to choose the law to apply to your succession, choose who you want to administer your estate, appoint a guardian for minor children, and safeguard partners’ succession rights. If no choice is made, under the EU Succession Regulation, the law of the last habitual residence is applicable to the succession. Therefore, Portuguese forced heirship rules may apply if you are considered as habitually resident in Portugal.
How many Wills should I have?
While the answer to this question depends on a case-by-case analysis, the solution often is to have a Will to deal with assets in each jurisdiction. This enables you to proceed with probate in each jurisdiction without being dependent on another. However, you should be careful when drafting the wills so as to not revoke existing Wills unintentionally.
What about Taxation?
In Portugal you can choose to apply the law of your nationality to your succession, without any tax consequences. As Portugal is a favourable jurisdiction because it does not have inheritance tax, and there is an exemption of stamp duty in some cases, a Will can prove to be an excellent tax planning instrument.
How do I execute my Will?
In Portugal, the will must always be signed before a Notary. You have the option of executing a Public Will (the original document is kept at the notary) or a Private Will (the original is kept by you). In either case, the Central Civil Registry is informed of the fact that you have executed a will, on that date, at that Notary, so that your Heirs can conduct a search after you have died.
You can also opt to sign the Will before a Consulate overseas; however not all Consulates provide this service, so it is important to confirm beforehand whether this is possible.
When do I need to change my Will?
When certain life events occur, you may need to make changes in your Will. For example, if you get married or divorced after signing your Will, the entire will or certain dispositions may become invalid. The birth of new children or grandchild may also require a change to your Will.
Other cases where it is advisable to change your Will include any substantial increase or decrease in the value of your assets. Moreover, if any of the beneficiaries in your Will passes away, you will need to make changes to the document.
Living Will
The Living Will is a crucial instrument in matters of health. Through the Living Will you can set out your wishes in terms of medical treatment, in case anything occurs that may prevent you from expressing your intentions. You can also appoint someone as your Healthcare Attorney. This person can make decisions regarding your medical treatment, should you not be able to do so.
The Living Will is registered at the National Register of Living Wills, and is valid for 5 years, after which it needs to be renewed.
Obtaining Probate in Portugal
When somebody dies with assets in Portugal, the steps involved in obtaining Probate are as follows:
- Step 1- Deed of Entitlement of Heirs: It is signed before a Notary by three witnesses indicating who the heirs are and if there is a Will, and providing the necessary documentation (death certificate, marriage and birth certificates and will). In case a foreign law has been chosen, a Certificate of Law for that jurisdiction will be required.
- Step 2 – Informing the Tax Department: A Model 1 of the Stamp Duty form is lodged, containing a list of all the deceased’s assets. In Portugal there is no Inheritance Tax, only Stamp Duty of 10%. However, spouses, children and common law spouses are exempt from Stamp Duty. Please note that this only applies to assets located in Portugal.
- Step 3 – Finalizing Administration of Estate: After steps 1 and 2 are concluded, you will be able to register any assets in the name of the heirs and request the release of funds held in bank accounts.
Always remember to seek proper legal advice when you are considering your succession planning, to ensure that your beneficiaries are not faced with a complicated situation, in many cases not speaking the Portuguese language and having to deal with the administration of an estate in a foreign country.
Teresa Patrício & Associados, Sociedade de Advogados / Law Firm
Lisbon: +351 217 981 030
Loulé: +351 289 143 189
Email: info@tpalaw.pt
www.tpalaw.pt
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