Are Trusts Legally Recognized in Spain?
Spain does not recognize common law trusts under its legal system. The concept of a trust, which allows a trustee to manage assets for a beneficiary, is not part of Spanish civil law.
However, foreign trusts may be acknowledged in certain contexts, and there are legal alternatives available under Spanish law that can serve similar purposes, such as inheritance structuring, asset protection, and tax optimization.
⚖️ Legal Alternatives to Trusts in Spain
🏠 1. Foundations (Fundaciones)
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Legal entities with a social or private purpose
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Can hold assets, property, and financial investments
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Suitable for philanthropy, estate continuity, and long-term asset control
✅ Supervised by regional or national authorities depending on scope
💼 2. Civil Law Contracts
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Mandate agreements, usufruct contracts, and life-interest arrangements are commonly used to manage property and finances
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These agreements are enforceable under the Spanish Civil Code
📌 Useful for estate transfers while maintaining some control
👨👩👧 3. Spanish Wills with Specific Provisions
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Spanish law allows for detailed succession planning using testamentary clauses
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Can designate heirs, assign guardians, and impose certain conditions
📝 Must respect Spain’s forced heirship rules, unless another jurisdiction is chosen under the EU Succession Regulation (Brussels IV)
🌐 4. Use of Foreign Trusts
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Spain does not tax trusts as separate entities but will tax the beneficiaries or settlors
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Foreign trusts must be declared under Spain’s Modelo 720 (foreign asset declaration)
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May be scrutinized by Spanish tax authorities for tax avoidance
🚨 Spain is not a signatory to The Hague Trust Convention
📊 Tax Considerations
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No domestic trust law, so taxation depends on ownership substance
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Transfers to trusts may be taxed as gifts or inheritance
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Income earned by foreign trusts may be attributed to Spanish tax residents
💡 Professional tax advice is essential when using offshore structures with Spanish connections
👨⚖️ How Borderless Lawyers Can Help
Our team advises clients from common law jurisdictions on legally secure strategies in Spain:
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✅ Inheritance & wealth planning for foreign residents
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✅ Structuring philanthropic vehicles (Spanish foundations)
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✅ Drafting wills, usufruct, and estate transfer agreements
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✅ Tax compliance for foreign trusts and beneficiaries
🌍 International clients | 🇪🇸 Spanish Civil Law experts | 📑 Multilingual estate lawyers
💬 Example Scenario
Case: A UK citizen residing in Marbella wanted to pass rental property to grandchildren through a discretionary trust. We advised on using a foundation combined with a Spanish will, ensuring full legal compliance while preserving asset control.
🚀 Planning Your Estate or Asset Transfer in Spain?
If you’re exploring ways to protect assets, plan inheritance, or replicate trust-like structures under Spanish law, our legal team can help you navigate the complexities.