Published April 2025 · 13 min read · By International Inheritance Spain
Every year, American families find themselves managing a Spanish inheritance they were not prepared for — a grandparent who emigrated from Spain decades ago and never fully severed their ties to the country, a parent who retired to the Costa del Sol or settled into life in Barcelona, or a relative who purchased a vacation apartment in the Canary Islands or Mallorca. Whenever a family member dies leaving assets on Spanish soil, those assets must pass through the Spanish legal system — regardless of where the heirs live.
For US-based families, this means navigating two completely different legal systems, operating across multiple time zones, dealing with documents and procedures in Spanish, and doing all of this under the pressure of a strict six-month deadline imposed by Spanish law. Miss that deadline and automatic surcharges begin to accumulate. Ignore the US reporting side of the equation and the IRS penalties can be severe.
This guide explains everything an American heir needs to understand when inheriting Spanish assets: which law applies, how Spanish inheritance tax works, what IRS reporting obligations arise, how the process works step by step, and how we manage everything for you from Spain — entirely in English, without you needing to travel.
The United States is not a member of the European Union and therefore does not participate in the EU Succession Regulation (EU 650/2012) that allows EU nationals to choose the law of their nationality to govern their estate. For American heirs, this has a straightforward but important consequence: Spanish law governs all Spanish assets.
This means that Spanish succession rules — including Spanish forced heir provisions — apply to property, bank accounts, investments, and any other assets held in Spain, regardless of what any US will says. The key rules to understand are:
One of the first questions American heirs ask is whether they will be taxed twice — once in Spain and once in the United States. The honest answer is that the situation depends on the size of the US estate, but for most families the practical impact is manageable.
The United States and Spain have no bilateral inheritance or estate tax treaty. This means there is no automatic mechanism to credit one country's tax against the other.
In practice, however, the two systems operate somewhat independently:
Because there is no treaty, the Spanish inheritance tax you pay does not automatically reduce your US tax liability, and vice versa. For most American families inheriting modest Spanish estates — a holiday apartment, a bank account, a car — this is not a significant concern because the US federal exemption is so high. However, we strongly recommend that American heirs work with both our office (for the Spanish side) and a US CPA experienced in international tax (for the US side) to ensure a coordinated approach. We are happy to liaise directly with your US adviser.
This is an area that catches many American heirs completely off guard. Even if you owe no US tax on the Spanish inheritance, you may have significant reporting obligations to the IRS. Failure to report is treated very seriously — civil penalties can be substantial, and in some cases criminal exposure arises.
If you inherit a Spanish bank account (or multiple accounts) and at any point during the calendar year the aggregate balance of your foreign financial accounts exceeds $10,000, you are required to file a Foreign Bank Account Report (FBAR) with FinCEN (the Financial Crimes Enforcement Network). This is filed electronically through the BSA E-Filing System and is due by April 15 of the following year, with an automatic extension to October 15.
The FBAR threshold is low — $10,000 is not a large sum, and many Spanish bank accounts held by retirees will exceed this. If the deceased had multiple accounts and you inherit them all, the balances are aggregated. Even if you inherit an account and promptly close it and repatriate the funds, the balance during the year may have exceeded the threshold, triggering the reporting obligation.
The Foreign Account Tax Compliance Act (FATCA) imposes an additional reporting requirement through IRS Form 8938, filed with your federal tax return. The threshold is higher than FBAR — for US residents filing a joint return, the threshold is $150,000 at year-end or $200,000 at any point during the year (lower thresholds apply for single filers and different thresholds for Americans living abroad). If your inherited Spanish financial assets exceed these amounts, Form 8938 must be filed alongside your Form 1040.
FBAR and Form 8938 are separate obligations — you may need to file both, and the information required is not identical.
If you receive an inheritance from a non-US person (including a Spanish national or a US citizen who was domiciled in Spain) and the value of the inheritance exceeds $100,000, you may be required to file IRS Form 3520 (Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts). Form 3520 is due on the date your tax return is due, including extensions.
It is important to understand that these are reporting obligations, not additional taxes. You do not pay extra US tax simply because you file an FBAR or Form 3520. However, penalties for failing to file are severe — up to $10,000 per violation for a non-wilful FBAR failure, and potentially much higher for wilful failures. The IRS has specifically targeted unreported foreign accounts and inheritances as an enforcement priority.
Spain imposes a strict deadline for filing the inheritance tax return (Impuesto de Sucesiones y Donaciones): six months from the date of death. This deadline applies equally to heirs living in New York, Miami, Los Angeles, Houston or anywhere else in the world. There are no exceptions for foreign residents and no grace period for people who did not know the deadline existed.
If the deadline is missed, automatic surcharges are added to the tax liability:
The time zone difference between the US and Spain — typically six to nine hours depending on your location and the time of year — makes this deadline even more pressing. Every day lost to confusion, to trying to work out what needs to be done, or to searching for the right legal team, is a day closer to surcharges that could easily be avoided.
It is possible to request a six-month extension, bringing the total window to twelve months. However, this extension request must be submitted within the first five months after the date of death — and it requires specific grounds and documentation. Do not leave it until month five.
If you have recently lost a family member who owned assets in Spain, contact us now. The sooner you do, the more options you have.
If your family member died in the United States, you will need a certified copy of the US death certificate, which must then be apostilled so it is recognised in Spain. The good news is that the United States joined the Hague Apostille Convention on 15 October 2023, which significantly simplifies this step — apostilles are now issued by the Secretary of State of the state where the death occurred (or where the document was issued). Once apostilled, the death certificate must be translated into Spanish by a sworn translator. We coordinate this process with you.
If your family member died in Spain, we obtain the death certificate directly from the Spanish Civil Registry.
We search the Registro de Actos de Última Voluntad in Madrid, which records all Spanish wills executed before a Spanish notary. This is a mandatory step — we cannot proceed without confirming whether a Spanish will exists.
We also check whether the deceased had a US will that should be recognised in Spain. If neither a Spanish will nor a valid US will exists, the inheritance proceeds under Spanish intestate succession law.
We conduct a comprehensive search of all relevant Spanish registries to identify every asset the deceased held in Spain. This includes the Land Registry for property, the DGT vehicle registry for cars or motorbikes, the Insurance Registry for life insurance policies, and direct enquiries to Spanish banks. We compile a complete inventory — you should not assume you already know everything the deceased owned in Spain. Hidden accounts and undisclosed property are more common than people expect.
To avoid travelling to Spain, you need to grant us a poder notarial (power of attorney) authorising us to act on your behalf throughout the entire inheritance process. For American heirs, this can be done in two ways:
Once we hold your power of attorney, we can manage every step of the Spanish inheritance without you needing to travel — from filing taxes to signing the deed of acceptance and registering assets in your name.
Every heir who accepts a Spanish inheritance must hold a Spanish tax identification number — the Número de Identificación de Extranjero (NIE). This number is required to pay Spanish taxes and to register assets at the Land Registry or with Spanish financial institutions. Without a NIE, the process cannot be completed.
American heirs who have never lived or worked in Spain will not have a NIE. We apply for your NIE on your behalf using your power of attorney, with no need for you to appear at a Spanish government office or consulate. The NIE application is submitted to the Spanish National Police (Policía Nacional) or, for non-residents, through the Spanish Consulate. We handle this entirely.
Once the asset inventory is complete and all heirs are identified, we calculate the Spanish inheritance tax liability for each heir. The calculation takes into account the value of the assets, the applicable regional rules, the relationship between each heir and the deceased, and any reductions or bonuses that apply. We then prepare and file the tax return before the six-month deadline — or within the extension period if one has been requested.
We sign the Escritura de Aceptación de Herencia (Deed of Acceptance of Inheritance) at a Spanish notary under your power of attorney. This formal document confirms which heirs accept the inheritance and on what terms. Following signature, we submit the deed to the Land Registry to register any inherited property in the heirs' names, arrange the release of bank accounts, and transfer any other assets. The inheritance is then complete.
A landmark ruling by the European Court of Justice in 2014 established that non-EU heirs must be treated the same as EU heirs for Spanish inheritance tax purposes. This means that American heirs are entitled to benefit from the most favourable regional rules — the same rules that apply to Spanish residents in the region where the assets are located. Before this ruling, non-resident non-EU heirs were taxed under a single national scale that was often far less generous than the regional rules. This ruling significantly reduced the tax burden for US heirs.
The actual amount of inheritance tax depends on several factors:
We calculate your exact position for free before you commit to anything. In many cases, the effective tax rate is much lower than families fear. In others, particularly for more distant relatives or in certain regions, proper planning is needed to ensure the most efficient outcome.
The most common concern we hear from American clients is this: "Do I have to travel to Spain?" The answer, in almost every case, is no.
Our entire service is designed for international families who are managing a Spanish inheritance remotely. Here is what that looks like in practice:
For clients based in New York, Miami, Los Angeles, Chicago, Houston, or anywhere else in the United States, the physical distance to Spain does not need to be an obstacle. We have completed Spanish inheritance procedures for American clients who never needed to leave their home state.
If you do wish to visit Spain at any point — to see the property, meet with us in person, or handle matters yourself — we can accommodate that as well. But it is never a requirement.
If you have recently lost a family member who owned assets in Spain, or if you are aware of a Spanish estate that has not yet been properly administered, the most important thing is to act without delay. The six-month clock is already running, and every week that passes without action narrows your options.
Contact us for a free initial consultation. We will review your situation, identify what assets are held in Spain, explain the process in plain English, and give you a clear, fixed fee for the complete service. There is no obligation and no cost to that first conversation.
We work with American clients across all time zones and can arrange calls in the morning, evening, or at weekends to suit your schedule.
The six-month deadline does not pause for time zones or paperwork. Contact us now for a free consultation — we will take it from there.
We guide American families through the entire process — in English, remotely, with fixed fees. Contact us today for a free initial consultation.