What happens if your parents make a donation that affects your legal inheritance?

It is quite common for parents to make donations to their children during their lifetime when they need them, for example because they are experiencing financial difficulties or want to buy a home. However, in some cases, such donations may prejudice the legitimate rights of other siblings who do not receive them. In this article, we explain what happens in such cases, what needs to be taken into account and what the courts say about similar cases.

The case of the Provincial Court of Barcelona: a donation from parents to their son, which harms their daughter

The case analysed by the Provincial Court of Barcelona involved parents who were admitted to a nursing home with varying degrees of cognitive impairment and who donated the family home to their son, who sold it for €235,000. The sister challenged the donation because she considered that the parents lacked the capacity to give consent to the donation and also requested the annulment of a general power of attorney that the parents had given to their son. The Court of First Instance of Barcelona rejected most of the claims against the son, but did accept the annulment of the donation with regard to the father. The daughter lodged an appeal requesting that the donation and power of attorney granted by the mother also be declared null and void.

What happens if the donation is made by a person with cognitive impairment?

The first thing to bear in mind is that, according to the Civil Code and the doctrine of the Supreme Court, the capacity of individuals is presumed, unless it can be demonstrated that on the dates on which the act being challenged took place, those individuals did not have sufficient capacity.

In the case we are analysing, several medical reports were provided that attested to the parents' cognitive impairment, which meant that they could not understand the scope of the donation they were making.

The Provincial Court of Barcelona considered the daughter's arguments to be valid and ruled that the son could not keep the money he had obtained from the sale of the property and had to return it to be incorporated into his parents' estate. It also understood that the general power of attorney granted by the parents in favour of the son was null and void due to their incapacity.

The ruling handed down by the Provincial Court of Barcelona may be appealed before the Supreme Court.

What does the Supreme Court say about gifts during one's lifetime?

The Supreme Court analysed a case in which a woman donated several properties to three of her children and several grandchildren before her death, but one of the grandchildren did not receive any donation. When the woman died and the estate was divided, the grandchild who had not received a donation requested that the value of the assets transferred be included in the estate inventory to ensure that his or her legitimate share was not reduced due to the previous donations.

His request was rejected by the Provincial Court of Albacete, but the Supreme Court overturned the ruling because it considers that donations made during a person's lifetime cannot alter the legitimate inheritance of compulsory heirs.

What happens if I make a donation to one child during my lifetime in order to leave another child without an inheritance?

It is one thing to make a donation to one child to help them, but it is quite another to make a donation in order to leave another child without an inheritance. This would be a form of disinheritance, but the grounds for disinheritance are regulated by the Civil Code and must be met in order for it to occur.

In the event that assets are donated to one child in order to leave the other child without an inheritance, we must not forget that there may be legal implications. Let's take a closer look:

The legitimate share of compulsory heirs

In Spain, according to the Civil Code, the inheritance is divided into three parts, one of which must be distributed among the compulsory heirs or legitimate heirs. This guarantees the right of children to receive a share of their parents' inheritance, and if they do not receive it, they can challenge the will in court to ensure that their right to a legitimate share is respected.

The possibility of disinheritance

If you want to avoid problems among heirs by making a lifetime gift that disadvantages any of them, there is the possibility of disinheritance, but this must be done on the basis of one of the legally regulated causes and in a will executed before a notary public. It is important to comply with all legal requirements for the disinheritance to be valid.

Donation during lifetime

We must not forget that if a donation is made during lifetime in order to disinherit a child, that donation must be included in the estate if there are other compulsory heirs. The testator has the option of considering the donation as non-collatable, i.e. it does not have to be included in the estate.

Tax implications

Another important aspect of donations is taxation. It is essential to analyse in which autonomous community the donation is made, because regulations vary greatly, and to see what allowances and reductions can be applied to inheritance and gift tax. It is also important to analyse the implications for income tax for those receiving the donation.

In short, lifetime donations to a child must be made with caution so as not to prejudice the legitimate rights of other children and then have to contribute the donated amount to the inheritance. To this end, it is essential to seek advice from a solicitor who is an expert in inheritance matters to analyse the case and determine the best way to proceed so as not to prejudice any heir and to comply strictly with the law.