The Law Applicable to the Succession of Foreign Residents in Portugal

In recent years, Portugal has become a destination for a growing number of foreign citizens, attracted by the quality of life, the tax framework, and the legal stability. However, upon establishing residency in Portuguese territory, many do not anticipate that their inheritance may be subject to Portuguese law.

Under applicable international law rules, inheritance is, in principle, governed by the law of the deceased's last domicile. For legal purposes, domicile is considered to be the place of habitual residence. Thus, a foreign resident in Portugal who dies here may see their inheritance, including all their assets, subject to Portuguese law.

The Portuguese inheritance system is based on a system of protection for the so-called legitimate heirs—specifically the spouse, descendants, and, in their absence, ascendants. A substantial part of the inheritance is legally reserved for these heirs, limiting the testator's freedom of disposition. Consequently, it is not possible to freely dispose of the entire estate through a will if there are legitimate heirs.

For citizens from legal systems that grant broad testamentary freedom, this limitation can represent a significant difference from initial expectations. Furthermore, when assets are dispersed across different jurisdictions, succession can become particularly complex, requiring careful and technically structured planning.

In this context, the adoption of appropriate estate planning measures is essential. European Union law allows citizens of member states to choose the law of their nationality to govern their succession, as an alternative to the law of their last domicile. This choice must be expressly stated in a will, clearly and unequivocally.

Opting for national law can allow for greater alignment between the wishes of the asset holder and the applicable legal regime; therefore, a prior analysis of the personal and financial situation is recommended to define the most appropriate solution.