You’re officially a USA (or UK) citizen, but you currently have legal (tax) residence in Portugal, where you now own property.
Do you need to create a separate will in Portugal to deal with it?
According to Danielle Richardson in “Planning your wills and estates in Portugal” (distributed and updated by Expática on 16 October 2020), “There is no legal requirement to draw up a will in Portugal,” says Richardson. “Furthermore, inheritance law in Portugal recognizes wills that have been drawn up abroad; even if they include instructions for property and assets in Portugal.””
As with most countries, for the purposes of a will, assets include any cash or savings, property, and any other items or instruments of value.
However, if you have sizeable assets in Portugal, “it is likely that Portuguese inheritance law will deal with them,” Richardson cautions. “Therefore, it is worth considering having a Portuguese will, even just as a safeguard.”
International attorneys Sandra Jesús and Stéfanie Luz of Caiado Guerreiro in Lisbon agree:
“Under the EU Regulation known as Brussels IV, the laws of the country where someone habitually resided will apply to the property upon their death. This means that Portuguese law could potentially be applicable to your inheritance, in spite of your nationality.”
To ensure that the applicable law will be the one that you choose (either Portuguese law or the law of your nationality), it is advisable to clearly state the choice of law in the will.
In certain circumstances, the law of the country where a property is located may become applicable. For example, if the deceased was an owner of property in Portugal, and the law of his/her nationality or residence determines that the law of the country where the deceased’s property is located takes precedence, then Portuguese inheritance law becomes relevant.
A Portuguese will also allows you to avoid delays in the administration of the estate, as it will enable you to proceed with the probate process following death without having to wait to receive documents from other jurisdictions as part of the probate process.
Remember, though, that Portugal follows forced heirship rules which state that legitimate heirs are entitled to a minimum of 50% of the deceased’s estate. And, if there is more than one legitimate heir, this portion usually increases to 60%.
Legitimate heirs include spouses, biological and adopted children, grandchildren, parents, and grandparents. The only way these relatives can be excluded from an inheritance is if the deceased has specifically asked for it on the grounds of unworthy behavior. Even then, the courts can challenge this request and reasoning.
Beyond the forced heirship rules, with a few exceptions, you can distribute your estate however you want. For example, the deceased’s last doctor, the priest of a religious establishment, and personal administrators cannot inherit any part of the estate.
Portuguese inheritance law states that the laws of an expat or immigrant’s home country should apply. Therefore, if you want Portuguese inheritance rules to apply to your estate, it must be stipulated so in your will. If the spouse of the deceased is a different nationality, s/he can apply the laws of his or her country of residence. So, if you have relocated to—or retired in—Portugal, Portuguese inheritance law can be applied.
If there is no will, and no spouse (ascendant or descendant), the estate passes to the siblings and their descendants, other collateral family up to the fourth degree, and finally to the State. Each subsequent class of heirs is only called upon if the previous class is not present.
Fortunately, if you don’t want to choose between a Portuguese will and one in your home country, you don’t have to. This is because Portuguese law allows people to have two wills. You can have one will in Portugal and one in your home country. Nevertheless, you must draft them so that one doesn’t accidentally negate or revoke the other. For this reason, it is wise to consult an attorney or solicitor if you want to have more than one will.
While there is no inheritance tax in Portugal, there is a type of tax–Imposto do Selo. This is charged at a flat rate of 10%, with several exemptions. No ‘legitimate heirs will pay this tax: spouses, children, grandchildren, parents, and grandparents. Further, it is only charged on Portuguese assets, such as Portuguese properties or other valuable items.
Property inherited by minors or other persons not of legal age may be registered in the name of the minor in Portugal’s Public Registry; however, minors do not have the power to administer property until they reach legal age. A guardian may be appointed from the immediate family provided he/she has capacity to perform the relevant guardianship duties. If no one in the immediate family is available the court can appoint an independent person to fulfil the task.
With all due respect, it never can be said that last wills and testaments are the basis of “dead giveaways” in Portugal!