Ever wondered what would happen to your sunny Algarve villa or Lisbon apartment if something happened to you tomorrow?
If you own assets in Portugal but haven't created a Portuguese Will, your loved ones could face a legal maze that no one should navigate during grief. The uncomfortable truth is that your carefully crafted Will from back home might hold little weight when it comes to your Portuguese property.
Portuguese inheritance law operates with rules that can seem alien to those from common law countries. With forced heirship requirements and specific procedural demands, the system doesn't just recommend a local Will—it practically necessitates one. And the stakes couldn't be higher: your family's financial security and the legacy you've worked so hard to build.
As a lawyer, part of my role is to cut through the confusion and outline to my clinets exactly what they need to know about Wills in Portugal—before it's too late to protect what matters most.
Want to hear what other clients
are saying about us?
1. Why You Need a Portuguese Will
If you own property or other assets in Portugal, having a valid Will is essential. Many foreign residents assume their existing Will from their home country covers their Portuguese assets, but this isn’t always the case.
Creating a Portuguese Will specifically for your assets located in Portugal helps avoid legal complications and ensures your wishes are properly executed according to Portuguese law. Portuguese Wills are crucial for smooth estate administration, compliance with local laws, and taking advantage of tax planning opportunities specific to Portuguese inheritance regulations.
2. Understanding Portuguese Inheritance Law
Portuguese inheritance law differs significantly from common law systems. One of the most important aspects is the concept of “forced heirship rules” (legitimacy), which restricts how you can distribute your estate.
Under Portuguese forced heirship rules, a portion of your assets must go to certain family members, regardless of your wishes:
- Spouse and children: Two-thirds of your estate is reserved for them
- Spouse and parents (no children): Two-thirds of your estate
- Children only (no spouse): Half of your estate
- Parents only (no spouse or children): Half of your estate
These family members are considered 'legal heirs' under Portuguese law.
Only the remaining portion can be freely distributed according to your wishes. This is very different from the systems in the UK or US, where you generally have freedom to leave your estate to whomever you choose.
3. The EU Succession Regulation
The EU Succession Regulation (Brussels IV) allows you to choose the law of your nationality to apply to your entire estate, potentially bypassing Portuguese forced heirship rules. This means that if you’re a British citizen, for example, you could choose British law to apply to your Portuguese assets.
However, this choice must be expressly stated in your Will. Without this clear instruction, the default law applicable Will be that of your habitual residence at the time of death. This can help avoid legal conflicts and ensure that the succession law is determined by the testator's nationality, impacting how assets are distributed under Portuguese law if the applicable law is established as local.
4. Types of Wills in Portugal
Portuguese law recognizes several types of Wills:
- Public Wills: Drafted by a notary public in the presence of two witnesses. The notary reads it aloud and both you and the witnesses sign it.
- Closed Wills: Handwritten by you or someone else at your direction, then signed by you. You present this document to a notary, who prepares a deed of approval. An equivalent document, such as a driving license or Citizen's card, is required for identification.
- International Wills: Follows the format established by the Washington Convention of 1973, recognized in many countries.
Each type has advantages and drawbacks. Public Wills offer greater security but less privacy, while closed Wills provide more privacy but may be more vulnerable to challenges.
5. The Process of Making a Will in Portugal
Creating a Will in Portugal follows these key steps:
- Consultation: Meet with a lawyer specialized in Portuguese inheritance law to discuss your assets and wishes. Understanding Portuguese inheritance rules during the consultation is crucial as they can significantly impact the drafting of your Will and the applicability of foreign laws.
- Documentation: Gather necessary documents, including your identity card or passport, tax identification number, and proof of ownership for any assets you wish to include.
- Drafting: Your lawyer Will draft the Will, ensuring it complies with Portuguese legal requirements.
- Execution: For a public Will, you’ll visit a notary’s office with two witnesses. The notary Will read the Will aloud, and all parties Will sign.
- Registration: While not mandatory, registering your Will with the Portuguese Central Registry of Wills is highly recommended.
6. Forced Heirship Rules in Portugal
In Portugal, the concept of forced heirship rules is a cornerstone of the inheritance system. These rules ensure that a significant portion of the deceased’s estate is reserved for their legitimate heirs, which include the spouse, children, and parents. Specifically, a minimum of 50% of the estate must be allocated to these family members, safeguarding their rights and ensuring they receive a fair share.
These forced heirship rules are designed to protect the family unit, reflecting the cultural importance placed on familial bonds in Portuguese society. They apply universally to all Portuguese citizens, regardless of where they reside, and also extend to foreigners who own property or assets in Portugal. This means that even if you are an expat with assets in Portugal, these rules will impact how your estate is distributed.
While it is possible to override these rules with a valid Will, it must be meticulously crafted in accordance with Portuguese law and registered with the competent authority. This ensures that your wishes are respected while still adhering to the legal framework designed to protect your family.
Understanding these forced heirship rules is crucial for anyone with assets in Portugal. It allows you to plan your estate effectively, ensuring that your loved ones are protected and your wishes are honored. By working with a knowledgeable lawyer, you can navigate these rules and create a Will that balances your personal desires with the legal requirements of Portuguese inheritance law.
7. Tax Implications for Heirs
Portugal abolished inheritance tax in 2004, but a 10% stamp duty applies to certain inherited assets, meaning there is no inheritance and gift tax in Portugal, only stamp duty. Spouses, children, parents, and grandparents are exempt from this tax, making Portugal quite tax-friendly for direct family inheritance.
There is no gift tax in Portugal, only stamp duty.
However, other family members and unmarried partners may need to pay the 10% stamp duty on inherited assets. The stamp duty is calculated on the total value of the estate after deducting estate debts and administration fees, meaning they must pay tax on their inheritance.
Banking assets located in Portugal may also be subject to stamp duty if inherited by someone other than a direct family member.
8. Common Mistakes to Avoid
From my experience helping expats create Wills in Portugal, I've noticed several common pitfalls:
- Using vague language: Portuguese law demands clarity in Wills. Ambiguous terms can lead to legal disputes.
- Ignoring forced heirship rules: Attempting to bypass these rules without proper legal guidance often leads to contested Wills.
- Not updating Wills after major life events: Marriage, divorce, births, and deaths should trigger a review of your Will.
- Failing to coordinate multiple Wills: If you have Wills in different countries, they must be carefully aligned to avoid contradictions.
- Not considering tax implications: While Portugal doesn't have inheritance tax, other tax considerations may apply depending on your specific situation.
9. Special Considerations for International Residents
If you split your time between Portugal and other countries, determining your habitual residence becomes crucial. This affects which country’s laws apply to your estate if you haven’t made an explicit choice in your Will. Using a foreign Will can lead to complications and potentially higher inheritance taxes.
Consider these factors:
- Where you spend most of your time
- Location of your main home
- Where most of your assets are located
- Where you pay taxes
- Where your family lives
Making a clear choice of law in your Will can help avoid uncertainty and ensure your wishes are respected.
10. Practical Steps for Peace of Mind
Creating a Will isn't just about legal compliance—it's about providing clarity and support for your loved ones during a difficult time. Here's what I recommend to my clients:
- Keep an updated inventory of all your assets in Portugal and other countries.
- Inform your executor about the location of your Will and other important documents.
- Review your Will regularly, especially after life changes or significant changes in asset value.
- Consider a power of attorney that remains valid after death to help your executor handle matters in Portugal.
- Maintain clear records of any debts or financial obligations that would affect your estate.
11. Finding Expert Help
Portuguese inheritance law can be complex, especially for foreign residents. Working with a lawyer who understands both Portuguese law and your home country's legal system is invaluable.
When selecting a professional to help with your Portuguese Will, look for:
- Experience with international clients
- Fluency in your language
- Understanding of cross-border inheritance issues
- Knowledge of relevant tax implications
- Ability to coordinate with legal advisors in your home country
12. Smart Planning Makes All the Difference
Creating a valid Will for your Portuguese assets gives you control over your legacy and provides peace of mind. While Portuguese inheritance law has its peculiarities, proper planning can help ensure your wishes are fulfilled while minimizing stress for your loved ones.
Don't leave your family to sort through legal issues during an already difficult time. A small investment in proper estate planning now can save significant headaches later.
Remember that while Portuguese inheritance law may seem demanding with its forced heirship rules, it's designed to protect family interests. With the right guidance, you can create a plan that respects both Portuguese legal requirements and your personal wishes.
Want to hear what other clients
are saying about us?
13. Frequently Asked Questions
How much does a will cost in Portugal?
The cost of drafting a Portuguese will typically starts at around €230, plus VAT and administration fees. This may increase depending on whether translation, legal advice, or notarial certification is required. Wills involving international assets or foreign nationals may also incur additional costs.
What are the inheritance rules in Portugal?
Inheritance Law in Portugal — Quick Facts
- Forced heirship: Children and spouses are entitled to a mandatory share of the estate.
- EU succession rules: Foreign residents can opt for their home country's law under EU Regulation 650/2012.
- Estate taxes: No inheritance or gift tax, but 10% stamp duty applies (exempt for spouses, children, and parents).
- Executor: Optional, but helps manage complex estates.
- Legal age: Beneficiaries must be 18 or older to inherit directly.
- No will? Assets follow default succession rules, favoring spouse and children.
What happens to a bank account when someone dies in Portugal?
When someone dies in Portugal, their bank accounts are typically frozen until the inheritance process begins. Heirs can access the funds once they provide a death certificate and a formal document proving heirship (usually from a notary or court). The bank may also request identification and tax clearance. Joint accounts may remain partially accessible to the surviving holder, depending on account terms.
How to get a copy of a will in Portugal?
To get a copy of a will in Portugal, request a Wills certificate from the IRN (Instituto dos Registos e do Notariado) confirming if a will exists and where it is registered. Once confirmed, the notary must “open” the will by officially recording the death. Heirs can then request a copy by presenting valid ID, the death certificate, and proof of legal interest.
