Estate planning, the key to peace of mind for both family and business
Now more than ever, the law should be used proactively, as a tool at the service of the people. In this regard, such personal matters as death, disability, marriage, civil partnerships and even terminal illness can, and should, be reflected on by all of us. The legacy of Spanish civil law, with its rich range of provisions, offers various tools that make it possible to regulate the consequences, in estate terms, that these personal matters have on our lives. The only thing the law asks is that we be proactive, that we use the tools given to us; if we don’t expressly specify the consequences, the law will do so for us.
It is not easy to start thinking about these matters, but if we look upon it as an act of responsibility, we will see that it is an opportunity to make clear our intentions, to make them enforceable, and to give peace of mind to our family and business associates. This process of reflection will most likely end with the execution of various legal documents that will be tasked with ensuring our intentions become a reality.
Thus, wills, succession covenants or mortis causa gifts can help ensure our intentions are carried out in the event of death. Questions such as: Do I have young children or children with disabilities who need special protection? Should I leave my estate to my children in equal shares? Am I particularly concerned about my spouse’s financial situation if I were to die? or Can I prevent my in-laws from one day accessing my estate? must be thought about and planned for.
Another scenario that we need to prepare for is unexpected disability. What will happen to my estate if I become disabled due to accident or illness? Who will manage it? How? And with what degree of control or supervision? Who will make decisions regarding my personal care? Spanish civil law allows us to regulate all these matters either by granting preventive powers of attorney in anticipation of disability, or by executing a deed for self-appointment of a guardian. We can and indeed ought to answer these and other questions, and decide on who we want to represent us and on what terms.
Even if our situation is irreversible or terminal, the law provides us with another tool, the living will, in which we can also include instructions for doctors and appoint a contact person or representative in this area. Something as simple as this can prevent family disputes in highly sensitive situations when emotions are running high, not to mention avoid major situations of deadlock regarding assets.
Other common personal situations like marriage or stable civil relationships also have consequences for assets which the law allows us to govern to a greater or lesser extent. In this regard, reflecting on the financial arrangement applicable to the marriage or the civil partnership, and the financial consequences of a potential break-up, is vital and, based on such reflection, we can decide whether or not to sign prenuptial or other prior agreements to address such a potential break-up, which are not meant to diminish the commitment to the marriage or the partnership, but rather try to facilitate the situation and establish certain objective rules while no dispute exists, and is naturally neither anticipated nor desired.
Aware that it is not always easy to engage in these reflection processes, but also aware of how necessary and useful such processes are, the professionals in Garrigues Private Client and Family Business department assist and advise entrepreneurs, executives, directors and professionals in these processes, maximizing the tools, mechanisms and legal resources that Spanish civil law has to offer and, of course, optimizing their tax treatment within the legal framework in force at any given time.