Collation of lifetime gifts: what an heir received in life is deducted from the estate
Where a father or mother gave one of the children a flat, a sum of money or a business during their lifetime, the law presumes it was an advance on that child’s inheritance. Collation means deducting it when the estate is divided. We explain when it applies, what is left out, how it is valued and what to do if the deed of partition ignores it.
What collation is and what it is for
Collation (colación) is the operation by which a forced heir who received a gift from the deceased during their lifetime brings it into the pot of the estate so that it is taken into account when the estate is divided (arts. 1035 to 1050 of the Civil Code). The heir does not hand the asset back: they simply take correspondingly less in the division, until the gift has been accounted for (art. 1047 CC). The purpose is equality between forced heirs: the law presumes that what was given to a child was an advance on their share, unless the donor said otherwise.
It should not be confused with the computation (computación) of gifts in order to calculate the forced share (art. 818 CC), which covers every gift, including gifts to people outside the family, and serves to establish whether any of them is excessive. These are two different calculations, applied at different stages; we explain it in the guide to computation and attribution of lifetime gifts.
If you come from English or American law. Collation has no real equivalent in England or in most of the United States, where lifetime gifts are usually the recipient’s to keep and a parent is free to favour one child over another. In Spain two thirds of the estate are reserved by law for the children — the legítima, or forced share — and a gift made to one of them is presumed to be an advance on their part of it. That presumption, not the parent’s intention after the event, is the starting point of every division.
When a gift is collated and when it is not
Gifts that are collated
- What the deceased gave to a forced heir (children, and in some cases ascendants) who takes the estate alongside other forced heirs (art. 1035 CC).
- What was given by both parents, which is collated in halves in each of their estates (art. 1046 CC). If the gift was made to the child and their spouse, the child collates only their own half; the son-in-law’s or daughter-in-law’s half is not collated, although it is computed for the forced share as a gift to a stranger.
- What the deceased gave to the parent of a grandchild who inherits by representation (art. 1038 CC).
- Sums the deceased paid to settle a child’s debts and other analogous outlays (art. 1043 CC), and what was handed over to set that child up in business where it amounted to a gift.
Gifts that are not collated
- Where the donor expressly released the gift from collation (dispensa de colación), either in the deed of gift itself or in the will (art. 1036 CC). The release has to be clear; a gift made «by way of betterment» (mejora) is generally understood to fall outside strict collation as well.
- Expenditure on maintenance, education, medical treatment, apprenticeship, and customary presents (art. 1041 CC).
- Expenditure to give a child a professional or artistic career, unless the deceased directed otherwise or it cuts into the forced share (art. 1042 CC).
- Gifts made to someone who is not a forced heir, or to someone who renounces the estate (art. 1036 CC): a person who renounces does not collate, although their gift is still computed for the forced share of the others.
How the gift is valued
Assets given during the deceased’s lifetime are valued as at the time the estate assets are valued, that is, at the date of the division, not at the date of the gift (art. 1045 CC). Any increase or physical deterioration after the gift, and its loss or destruction, are for the account and at the risk of the person who received it. So a flat given away in 1998 for €90,000 is collated at what it is worth today, and a gift of money is brought up to date so that it keeps its real value. This is the main source of argument in the divisions that reach us.
An example in round figures. Estate to be divided: €600,000 between three siblings. One of them received, during the parents’ lifetime, a flat now worth €300,000. Without collation, each would take €200,000 and the one who was favoured would end up with €500,000 in all. With collation, the divisible pot is €900,000, each is entitled to €300,000, and the one who already has the flat takes nothing further. The difference for each of the other two is €100,000.
What to do if the division ignores the gift
If the heirs are dividing the estate themselves, collation is negotiated with the figures on the table; most of the time it is enough to prove the gift (the deed, the bank transfers, purchase deeds paid for by the father) and its present value. If there is a contador-partidor — the accountant-divider appointed to draw up the division — and he has not taken the gift into account, opposition to the cuaderno particional, the deed of partition, can be raised within the judicial division procedure; and if the division has already been completed in disregard of the gift, it can be set aside for prejudice of more than a quarter (art. 1074 CC) or supplemented. We deal with these routes in the guide to estate distribution and the deed of partition.
A disguised gift counts as well: a transfer labelled a «loan» that was never repaid is collated as a gift, and a sale of a property with no real price is a sham. In that second case the Supreme Court (Tribunal Supremo) treats the concealed gift as void too (art. 633 CC) and the asset returns to the estate, which is even better for the other heirs. Bank records and the absence of any payment are the usual evidence.
How we handle it, step by step
Inventory of what was given away
Deeds of gift and suspect sale deeds, bank records for the last few years, insurance policies and «family» loans.
Present-day valuation
Valuation of the assets given away as at the date of division, and money brought up to date, on a basis that can be defended before a judge.
Working out the division
The collatable pot, each heir’s share and how much less the recipient takes. We tell you how much is at stake.
Negotiation or judicial division
A proposed division put to the co-heirs; if there is no agreement, judicial division with reasoned opposition to the deed of partition.
Deadlines worth not letting slip
- Collation is raised in the division itself: if the estate has gone years without being divided, it is still open to you; if it has already been divided, a claim to set the division aside for prejudice is time-barred after four years (art. 1076 CC).
- Six months for inheritance tax, even while the division is in dispute.
Common questions about collation
My brother was given a flat by my parents twenty years ago. Does it count in the estate?
Yes, unless your parents expressly released it from collation. And it counts at what the flat is worth when the estate is divided, not at its value twenty years ago.
Does he have to give the flat back?
No. Collation is not restitution: the brother who received it takes correspondingly less in the division until everyone is level, and if what he was given exceeds his share he does not have to pay back the excess, unless it cuts into the others’ forced share.
My parents paid for my sister’s university studies abroad. Is that collated?
As a rule, no: expenditure on education and on a professional career falls outside collation, unless the parents directed otherwise or it cuts into the other children’s forced share.
The person who received the gift has renounced the estate. What now?
By renouncing, they do not collate: they keep what they were given and take no part in the division. But their gift is still computed in order to work out whether the others’ forced share is covered, and if it is not, the gift can be cut down.
How do I prove a gift that was dressed up as a sale?
Through the bank records: if the price was never really paid, the sale is a sham. With real property, the Supreme Court treats the concealed gift as void as well, for want of a deed of gift (art. 633 CC), and the asset returns to the estate; with money or movable property it may stand as a gift and be collated.
Where we work
Our office is in Villanueva de la Cañada, and we regularly act in Majadahonda, Las Rozas, Boadilla del Monte, Pozuelo de Alarcón, Brunete, Villanueva del Pardillo, Valdemorillo and the rest of western Madrid. Succession proceedings are heard by the court for the place where the deceased was last domiciled, not where the heirs live: if you live outside the area, or outside Spain, that is no obstacle to our handling the case. This guide forms part of our inheritance and succession practice.
Tell us about your case
If you believe a brother or sister received more during your parents’ lifetime than the division recognises, bring us the deeds and whatever bank records you have. We study every case before taking it on, and we tell you frankly how much is at stake.
First consultation: quoted before we start.
28691 Villanueva de la Cañada (Madrid)