Wills and international wealth: succession risks for families with assets in Portugal

Part of the series “Cross-Border Successions and International Wealth”

In recent years, Portugal has established itself as a preferred jurisdiction for real estate investment, tax residence, and wealth structuring. Whether in the case of foreign investors holding assets in Portugal or Portuguese families with property and business interests spread across multiple jurisdictions, succession coordination has become a central concern.

Where assets are located in Portugal (including real estate, shareholdings, holding structures, or financial portfolios), the mere existence of a will drafted in another jurisdiction may not be sufficient to ensure an efficient cross-border succession.

It is in this context that the most significant succession risks arise.

Is an international will sufficient when assets are located in Portugal?

Regulation (EU) No. 650/2012 allows, under certain circumstances, the law of the deceased’s nationality to govern an international succession. However, the transfer of assets located in Portugal requires practical validation before Portuguese authorities, including land registries and tax authorities.

In practice, heirs may encounter:

• The need to obtain a European Certificate of succession.

• Certified translations and apostilles.

• Specific land registration requirements for Portuguese real estate.

• Uncertainty as to the interpretation and enforceability of certain foreign legal rules and testamentary clauses.

A will that is legally valid in the country of origin may prove effective in principle, yet operationally complex when applied to assets situated in Portugal.

Portuguese forced heirship rules and limits to testamentary freedom

Portuguese succession law reserves a significant portion of an estate for forced heirs, namely the spouse, descendants, and, in certain cases, ascendants.

For families originating from jurisdictions that grant broad testamentary freedom, these restrictions may substantially affect succession planning. Testamentary provisions exceeding the limits imposed by Portuguese forced heirship rules may be subject to judicial reduction, potentially impacting asset stability and, in some cases, the continuity of family businesses.

In cross-border succession scenarios, it is essential to determine in advance which law will apply and how forced heirship may affect assets located in Portugal.

Multi-jurisdictional coordination: avoiding conflicts and asset freezes

Families with international wealth should be mindful of:

• Wills that inadvertently revoke one another.

• Misalignment between corporate structures and succession provisions.

• Lack of coordination between the will, the matrimonial property regime, and holding structures.

• Temporary disruption in the management of business assets.

In certain circumstances, it may be advisable to implement a succession instrument specifically addressing assets located in Portugal, carefully aligned with the broader international estate plan. Cross-border succession requires documentary coherence and strategic oversight.

Tax implications in international succession contexts

Although Portugal does not levy a traditional inheritance tax, stamp duty may apply to certain transfers of assets located in Portugal.

Furthermore, business assets and shareholdings require careful consideration in respect of:

• Asset valuation.

• Potential exposure to other taxes (such as real estate transfer tax or corporate income tax).

• Coordination with the tax regime of the deceased’s jurisdiction of residence.

• Possible instances of double taxation in an international succession.

In the case of substantial estates, the absence of structured succession planning may result in avoidable tax exposure or prolonged disputes.

Conclusion

The acquisition of assets in Portugal is often part of a broader international wealth strategy. Their transmission should benefit from the same level of legal and tax rigor.

Where Portuguese assets form part of an international estate, the question is not merely whether a will exists, but whether that instrument is properly coordinated with Portuguese law, existing corporate structures, and the tax implications of a cross-border succession.

Experience shows that the most significant succession constraints arise not from the absence of a will but from the absence of coordination. It is at the planning stage that genuine asset protection is achieved.

For families with substantial international wealth, a prior review of their succession structure may prove decisive. Our team is naturally available to assess specific situations with full confidentiality and the technical rigor such matters require.

Contact: gpf@lfadv.pt