Forced Heirship And Foreign Real Estate: A Warning
Contents
- The Estate Law That Can Override Your Will
- What Forced Heirship Actually Means
- Louisiana Has Forced Heirship Too
- Why It Matters for Foreign Real Estate
- A Real-World Example: The Portugal Surprise
- How Forced Heirship Works in Key Countries
- Common Mistakes People Make
- Strategies to Avoid or Minimize Forced Heirship
- #1. Elect US Law Under the EU Succession Regulation
- #2. Foreign Companies
- #3. Use Local Planning Tools
- Forced Heirship Affects More Than Real Estate
- Frequently Asked Questions
- Ounce of Prevention Better Than a Pound of Cure
- Sources
A client came to us recently having spent years building her overseas plan. Key to that was the purchase of several properties in Portugal as long-term investments.
Then, over dinner with a friend one evening in Lagos, the conversation turned to inheritance laws in Europe. That’s when she first heard the phrase forced heirship.
She had no children and was widowed. Her only close relative was a brother she hadn’t spoken to in years — and who she certainly didn’t want to benefit. The idea that local law might force her properties into his hands made her stop cold.
The Estate Law That Can Override Your Will
Most Americans have never heard of forced heirship because it doesn’t exist under US common law.
But in much of the world — including popular property places like France, Spain, Italy, Portugal, Panama, Costa Rica, Mexico, Uruguay, and Switzerland — forced heirship is the default. If you die owning real estate there, local law can automatically allocate part — or even most — of that property to your closest family members, regardless of your intentions.
(By contrast, most US states allow you to set up your estate however you like.)
If you’re building a Plan B with foreign real estate or passing wealth to the next generation, it’s important to get this right.
What Forced Heirship Actually Means
,Forced heirship exists because civil law countries see inheritance differently than we do in the US. The concept is centuries old and is based on the idea that wealth is a family resource, not just personal property. Lawmakers believed that certain relatives — especially spouses, children, and parents — should always receive a share, no matter what a will says.
The broad goal is to protect close family members from being disinherited and to keep family wealth from being diverted outside the bloodline. It’s also meant to reduce disputes after death and prevent situations where a surviving spouse or child is left with nothing.
You can see how this works in Italy. The law follows a strict order: spouse and children first, then parents and grandparents, then siblings and other relatives. If none of those exist, the estate eventually goes to the state. Each group is entitled to a “reserved share,” and you can only decide what happens to the part that remains — called the available quota.
Here’s a simplified example. Suppose you own a villa in Italy worth USD $1 million when you pass. Even with a perfectly valid US will leaving the property to someone else, Italian law dictates how that property is divided, based on who survives you.
With a spouse and two children, half must go to them, and only a quarter is fully under your control.
If there are no children, parents or even grandparents step in and receive a share.
If no family members exist, the state gets it.
How they calculate that is pretty detailed depending on your family makeup. As per legal resource, The Italian Lawyer:
| Heirs at the opening of the succession | Distribution under Italian law |
| Only the spouse | 1/2 to the spouse as a reserved quota (legittima), 1/2 as available quota |
| Spouse and one child | 1/3 to the spouse as a reserved quota, 1/3 to the child as a reserved quota, 1/3 as available quota |
| Spouse and two or more children | 1/4 to the spouse as a reserved quota, 2/4 to children as a reserved quota, 1/4 as available quota |
| One child (no spouse) | 1/2 to the child as a reserved quota, 1/2 as available quota |
| Two or more children (no spouse) | 2/3 to the children as a reserved quota, 1/3 as available quota |
| Ascendants* (no spouse or children) | 1/3 to ascendants as a reserved quota, 2/3 as available quota |
| Spouse and ascendants* (no children) | 1/2 to the spouse as a reserved quota, 1/4 to ascendants as a reserved quota, 1/4 as available quota |
*Ascendants in this case are parents by default. If the parents are no longer living, then grandparents.
Even in the best case scenario, only the available quota is fully under your control. The rest is locked in by law — whether you like it or not.
For many Americans, this can be quite a shock: the will they assumed would govern their property is effectively overridden by a mandatory formula they had no idea existed.
Louisiana Has Forced Heirship Too
Louisiana — because of its civil law heritage — still has a limited form of forced heirship. But it applies only in narrow circumstances, like when a child is under 24 or permanently disabled. Everywhere else in the US, you’re free to leave your assets however you wish.
Why It Matters for Foreign Real Estate
If you’re buying property abroad — a home in Portugal for seasonal living, a beach house in Mexico, or an investment apartment in Spain — your US estate plan doesn’t automatically follow that property. Real estate is governed by the law where it’s located (lex situs).
That means your foreign property is subject to local inheritance law, and local courts will generally enforce it even if your heirs live in the US and your will is written under US law.
A Real-World Example: The Portugal Surprise
An American couple — let’s call them Tom and Linda — bought a vacation property in Portugal. They intended to keep it for decades, possibly pass it to a favored niece, and had a perfectly valid US will laying that out.
They assumed that was enough. It wasn’t.
When Tom died, Portuguese law stepped in. Because the property was in Portugal, local courts applied Portuguese succession law, which mandated that two-thirds of the property pass to Tom’s children — even though Tom had been estranged from them for decades and wanted the property to go elsewhere. The will was irrelevant. The result: A big family fight.
The mistake wasn’t buying in Portugal. It was failing to plan for how Portuguese law would treat that asset on death.
How Forced Heirship Works in Key Countries
The details vary by country, but the core idea is the same: certain family members are legally entitled to a fixed share of your estate. Here’s how that looks in some of the most common jurisdictions our clients invest in:
France: Children are always entitled to a reserved share — 50% if you have one child, 66% if you have two, and 75% if you have three or more.
Spain: Two-thirds of your estate must go to your children. One-third is split equally, and another one-third you can divide among them however you like. The final third is yours to distribute freely.
Italy: Children and a spouse together must receive between two-thirds and three-quarters of the estate, depending on how many children you have.
Portugal: Children and a spouse are entitled to at least two-thirds of your estate. If there are no children, the spouse usually receives half.
Switzerland: Since 2023, both children and a spouse (or registered partner) are entitled to at least half of what they would receive under normal inheritance rules. Parents no longer have a reserved share.
Panama: Civil-law inheritance rules apply to property located in Panama. Children, a spouse, and sometimes parents are entitled to a reserved portion, but the exact shares depend on family circumstances.
Costa Rica: Spouses and children have strong inheritance rights, and courts protect them, but the exact amount varies depending on whether a will exists and how the estate is structured.
Mexico: Testamentary freedom is broad. There’s no fixed percentage, but a will can be reduced by a court if it fails to provide legally required support (alimentos) for dependents.
Uruguay: Children receive half the estate if there’s one child, two-thirds if there are two, and three-quarters if there are three or more. If there are no children, parents and a spouse share a legally mandated portion.
Montenegro: Spouses and children are entitled to a compulsory share that can’t be taken away by a will. In most cases, they must receive at least half of what they would have inherited under the normal family order.
Common Mistakes People Make
Here’s what we see most often:
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Relying solely on a US will. It’s rarely enough for foreign property.
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Titling the property in personal name. This exposes it directly to local succession law.
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Ignoring local planning options. Tools like usufruct or dual wills are often overlooked.
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Failing to consider tax consequences. Forced heirship shares can trigger unintended tax liabilities for heirs.
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Not updating plans after relocation. Residency changes can shift which law applies.
Each of these can result in your estate plan being overridden.
Strategies to Avoid or Minimize Forced Heirship
So now we come to the most important question – can you either minimize or avoid it entirely?
The answer is – maybe. It’s a common request that, unfortunately, has no one-size-fits-all solution. But here are some options…
#1. Elect US Law Under the EU Succession Regulation
The EU Succession Regulation (Brussels IV) allows non-EU citizens with property in most EU countries to elect the law of their nationality to govern their estate.
In practice, that means a US citizen can state in a local will that US law applies — bypassing forced heirship in most EU jurisdictions.
Three important notes:
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Denmark and Ireland did not adopt the regulation. If your property is there, local forced heirship applies no matter what.
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The election must be made in a valid will recognized under local law.
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The will must still go through local probate. This adds delays and costs, which vary from country to country.
This is one of the most powerful tools available to Americans with property in countries like France, Spain, Italy, or Portugal.
#2. Foreign Companies
Holding real estate through a foreign company can change how local law views the asset. In some cases, this shifts succession from “immovable property” (subject to forced heirship) to “shares” (movable property), which can follow your chosen jurisdiction’s rules.
This approach must be structured carefully to avoid tax and compliance pitfalls, but it’s a standard planning tool in cross-border wealth structuring.
#3. Use Local Planning Tools
Many civil law jurisdictions offer planning devices such as:
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Usufruct / bare ownership: Splitting lifetime use rights from ownership can control how property passes.
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Lifetime gifts: Gradual transfer of ownership during your lifetime can sidestep some forced heirship constraints.
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Marriage contracts or inheritance pacts: These can adjust spousal entitlements or bind heirs to certain terms.
Forced Heirship Affects More Than Real Estate
Although forced heirship is most painful with situs assets like real estate, it can also apply to shares in local companies, physical property (artwork, precious metals, collectibles, etc.), or bank accounts located in civil law countries. The more diversified your assets are overseas, the more important proper planning becomes.
When we have a new client, we take stock of every long-term asset a client has in a foreign country and then, asset by asset, get a sense of forced heirship exposure. It helps set the foundation for the rest of our work.
Frequently Asked Questions
Can a standard US attorney help put this together?
In most cases, a US attorney won’t be able to help because they don’t have the knowledge, experience and (often) language skills to navigate the other country’s legal system.
Can a foreign lawyer put this together?
Theoretically, yes. In practice, we’ve seen too many clients who retained a good lawyer in a foreign country who had very little practical knowledge of how their planning would affect the US side of things.
Without a US planner on board, it’s easy to get yourself in trouble.
Can I Hold Foreign Property in My US Trust?
Technically, yes — you may be able to title foreign real estate in the name of a US trust. But in almost every civil law country, that trust will not be recognized as a valid estate-planning vehicle. And that distinction matters.
Here’s why:
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Civil law doesn’t recognize the trust concept. The split between legal and beneficial ownership — which is the foundation of common law trusts — simply doesn’t exist in civil law countries.
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Local authorities may allow the trust to hold title, but they won’t treat it as controlling the inheritance. When you pass, the property will still be subject to local succession law — including forced heirship — as if you owned it directly.
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Courts routinely “look through” foreign trusts. Even if the deed names a US trust as the owner, judges often disregard the structure for inheritance purposes and apply forced heirship rules to the underlying property.
There are limited exceptions — for example, a few jurisdictions that have ratified the Hague Trusts Convention (like Italy or Luxembourg) will acknowledge the existence of a foreign trust. But even there, the property inside it usually remains subject to local inheritance law if it’s real estate. And in Latin America, foreign trusts are generally ignored altogether.
The practical takeaway: a US trust alone won’t protect foreign real estate from forced heirship. If you want to integrate the property into your broader estate plan, you’ll usually need one of these approaches:
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Own the property through a locally recognized entity and have the trust hold the shares.
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Use a local will that elects US law under the EU Succession Regulation (where available).
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Explore lifetime transfers or usufruct arrangements that can blunt the effects of forced heirship entirely.
Ounce of Prevention Better Than a Pound of Cure
As with many things about offshore planning, it’s better to take care of this early than leave it to your heirs to struggle after the fact.
Some version of forced heirship is the default rule across much of the world. And if you own property in one of those countries, local succession law generally doesn’t care what your US will says. It will decide who inherits, how much they receive, and on what terms.
The good news is that you’re not powerless. With the right planning, you can regain a certain level of control over your estate planning.
But you need the right team on board to help you do it. That’s exactly what we’ve done for thousands of clients over 40 years and counting.
If you:
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Are thinking about buying real estate in Europe or Latin America
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Already own property in these two areas
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Or have other assets
… feel free to book in a consultation to see how we can help.
Sources:
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Italian Inheritance Guide: https://theitalianlawyer.com/italian-inheritance-law-guide/
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Italian Reserved Quota System: https://theitalianlawyer.com/forced-heirship-and-reserved-quota/
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European Commission – Succession Regulation (Brussels IV): https://eur-lex.europa.eu/eli/reg/2012/650/oj/eng
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Notaries of Europe – Forced Heirship Overview: https://www.notariesofeurope.eu/en/citizens/successions-in-europe/
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