The three parts of the estate under the Civil Code

Under Spanish common law, governed by the Civil Code, the estate is divided into three equal parts when processing an inheritance. Understanding this structure is essential for determining what percentage of a property belongs to each heir.

• Strict forced share third: Divided equally among all forced heirs, guaranteeing each one a minimum share of the deceased's assets.
• Betterment third: Used to benefit one or more children or descendants, but cannot be assigned to anyone outside the direct line.
• Free disposal third: The testator can freely bequeath this portion to any natural or legal person, without any requirement for family or relation ties.

Who are the forced heirs in real estate inheritances?

The order of priority for receiving the forced share over property and the rest of the estate is legally established as follows:

1. Children and descendants: First in line to inherit, they are entitled to two-thirds of the estate (the sum of the strict forced share and the betterment third).
2. Parents and ascendants: Entitled to the forced share only if the deceased leaves no children or descendants. They are entitled to half the estate, or one-third if inheriting alongside a surviving spouse.
3. Surviving spouse: Their entitlement usually takes the form of a life usufruct (life interest) rather than full property ownership, with the proportion varying depending on which other heirs are involved in the succession.

The impact of forced heirship on property ownership and sales

When a property forms part of the assets to be distributed, forced heirship rights create specific legal situations that condition its use, management, and subsequent sale.

Joint ownership (proindiviso) and joint decision-making

If the property is awarded to several forced heirs without one compensating the others in cash, a situation of joint ownership or co-ownership (proindiviso) arises. Under this legal framework, no heir can sell the entire property without the explicit consent of the other co-owners. To complete a sale on the open market, unanimity is required; otherwise, parties must agree on a buyout or initiate judicial proceedings for the division of common property.

The spouse's usufruct over the main residence

When there is a surviving spouse, the law grants them a life usufruct over a portion of the estate. If this usufruct applies to the main residence, the children will inherit bare ownership (nuda propiedad) but cannot occupy the property or force the surviving spouse to leave. To sell full ownership, the parties must agree to capitalising the usufruct through a cash payment or the allocation of other assets.

Financing to compensate co-heirs for their forced share

In the typical distribution of inherited real estate, one forced heir often prefers to retain full ownership of the property. To do so, they must pay the other heirs their proportional share corresponding to their forced share entitlement.

When the person acquiring the property lacks sufficient liquidity, mortgage loans secured against the inherited property itself are often used. Having professional support from mortgage brokers makes it possible to negotiate the ideal financial terms to dissolve the co-ownership and pay the monetary compensation required by law to the other heirs.

Regional differences in forced heirship regulations

The calculation of forced heirship is not applied identically across Spain. Although the Civil Code applies in much of the country, several autonomous communities have regional or special civil laws that substantially modify the amount and distribution of the forced share:

• Cataluña: The forced share equals only a quarter (25%) of the net value of the estate, divided among all forced heirs.
• País Vasco: The collective forced share represents one-third of the estate and may be granted to a single descendant, explicitly excluding the others.
• Galicia: The forced share set for descendants is 25% of the total value of the estate.
• Aragón and Navarra: Feature systems with broad testamentary freedom or specific rules on the preferential assignment of real estate.

In the Comunidad de Madrid, general common law rules apply. In the case of inheriting an officially protected housing unit (VPO) located in the Comunidad de Madrid, the distribution of the forced share must also comply with allocation requirements, primary residence obligations, and maximum sale price limits stipulated by regional regulations on social housing.

Can lifetime gifts be made to bypass forced heirship?

Gifting a property during one's lifetime does not extinguish the rights of forced heirs upon death. To prevent the depletion of estate assets to the detriment of the forced share, the legal system applies the mechanism of collation and integration of lifetime gifts.

When calculating the value of the estate, the updated value of gifts made by the deceased during their lifetime is added back. If the property gift is found to exceed the free disposal share and infringe upon any heir's strict forced share, the transfer is deemed excessive for the excess portion, requiring the gift to be reduced or the deficit to be compensated in cash.