Inheritance in Portugal is governed by the Portuguese Civil Code, which strictly lays out advantages for preserving wealth across generations. Furthermore, with some exemptions from inheritance tax for close relatives and a straightforward legal framework, Portugal stands out as a favourable destination for estate planning, namely expats.
Why Inheritance in Portugal Is Advantageous
The Portuguese Civil Code allows for a smooth transfer of wealth; this reflects the cultural importance of family heritage preservation as it will transfer property, family businesses, and personal possessions without imposing burdensome taxes on the direct heirs. This creates an environment where family assets can be passed down seamlessly and preserved over time. Given this, inheritance in Portugal has become a synonym for peace of mind through legal clarity and tax efficiency in estate planning.
Zero Inheritance Tax
One of the most appealing features of inheritance in Portugal is the exemption from inheritance tax for certain close family members; this means that direct ascendents or descendants (i.e. spouses, children, grandchildren, parents, and grandparents) benefit from an exemption on inheritance tax. This measure ensures that families can retain ownership of key assets without the risk of forced liquidation due to tax obligations. Notwithstanding this, other beneficiaries, such as siblings, extended family members, or those who aren’t related, will face a 10% stamp duty on the assets they inherit.
Estate Planning and Legal Considerations
Regarding inheritance in Portugal, a thorough understanding of local inheritance laws, tax implications, and potential cross-border legal issues, namely under EU Law – Regulation (EU) No 650/2012 on matters of succession and the creation of a European Certificate of Succession.
Some jurisdictions apply forced heirship rules or override testamentary freedom, potentially impacting how your estate is distributed—even if a will is in place. Engaging a legal expert familiar with Portuguese and international succession law can help navigate these complexities and prevent disputes.
Forced Heirship Rules in Portugal
The Portuguese Civil Code requires that two-thirds of a deceased person’s estate go to “legitimate heirs”—typically spouses, children, or, if none exist, parents. As such, only one-third can be freely allocated to others, such as distant relatives, friends, or organizations, through will.
As for those testators with no legitimate heirs, as determined under law, they may dispose of their estate entirely as they wish through will; however, if no will is in place, the Portuguese Republic will inherit all assets.
Drafting a Valid Will in Portugal
Both residents and non-residents can draft a legally binding will in Portugal. A well-structured will ensures that your intentions are respected under local law. However, it is essential to note that whether a Portuguese will govern assets abroad depends on international succession laws and bilateral agreements signed by Portugal.
Flexibility and Revocation of Wills
Wills in Portugal are not set in stone and can, therefore, be revised or revoked anytime during the testator’s lifetime. In addition, if specific assets listed in a will are no longer owned at the time of the testator’s death, those provisions will lapse; said provisions offer additional flexibility in managing estate changes over long periods.
Conclusion: Inheritance in Portugal
For those looking to protect and pass on their wealth efficiently, inheritance in Portugal currently offers a welcoming legal and tax environment. A comprehensive estate plan that includes a Portuguese will—and, if needed, supplementary wills for assets in other countries—can ensure your legacy is preserved and your wishes respected.
How Our Legal Team Can Help with Inheritance in Portugal
Our team of independent legal professionals provides tailored legal support for every aspect of inheritance in Portugal for expats living in the Autonomous Region of Madeira, ensuring your assets are protected, and your estate is structured in line with Portuguese and international legal standards. Contact us today for expert advice on securing your legacy in Portugal.
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