Disclaiming an Inheritance

Article chapters:

• How does probate work?
• Estate inventory
• Accepting an inheritance with limited liability for debts
• Disclaiming an inheritance – why and how?
• Probate costs

How does probate work?

When a person (a devisor or testator in legal terms) becomes deceased, other person(s) may claim their right of inheritance, which is examined in a process called probate. The purpose of probate is to determine the heir(s) and their share of the devisor’s estate. Let it be noted that not only assets but eventual liabilities (debts) are subject to probate.

Upon the death of a person, the local register office automatically sends a copy of the death certificate to the authorized court, which in response commences the probate and appoints a notary in charge of the whole process. The notary is never selected by the survivors to prevent bias. Subsequently, the appointed notary’s name is published on the website of the Notarial Chamber of the Czech Republic. However, you needn’t contact them yourself.

The notary’s first task is to run a preliminary examination. This means they usually summon the person who administered the funeral and strive to gather any and all relevant information about the devisor’s estate, debts, heirs, the existence of the eventual testament or other relevant documents, such as mutual wills. The acquired data are then verified in cooperation with the heirs and other close persons. Also, the notary makes inquiries to banking institutions, insurance companies and the Notarial Chamber’s record, where wills and other documents created with the help of notaries are kept.

When they have gathered all the required information and documents, the notary summons the so-called final proceeding, which is attended by all the survivors entitled to a portion of the estate property.

Estate inventory

During the final proceeding, an estate aggregate is compiled, i.e., a list of any and all assets and debts associated with the decedent on the day of their death. When determining the assets’ value, an expert opinion is required with real estate, land, vehicles and any other items of value. The appraiser is selected by the notary, again to prevent bias. With other estate assets, the heirs’ consensus regarding their value suffices.

If no heir raises an objection, a simple list of estate property is compiled, and an affirmative declaration of heirs is signed. However, if an heir challenges the motion, a so-called estate inventory must be prepared. This is advisable especially if it’s unclear whether or not the estate is overextended (insolvent), i.e., if the debts might exceed the assets.

The inventory is prepared by the notary along with a court-sworn expert, who appraises the value of all the property, not only of its more valuable portions. An estate inventory is also required if no heir claims the inheritance, or if the will contains legal errors that make its clear interpretation impossible.

Accepting an inheritance with limited liability for debts

If it seems you might inherit debts, proceed with caution, as the Czech law holds heirs liable for the devisor’s debts beyond the scope of their inheritance. However, you may prevent this by accepting the inheritance with the benefit of estate inventory, thus reducing your liability for the debts. This way, you’ll continue to bear liability for the debts jointly and equally with the other heirs (if they exist), but the creditors will only be able to claim performance no greater than the value of the obtained inheritance.

What to bear in mind regarding the right to accept an inheritance with the benefit of inventory:

• the heir must claim it within a month,
• the period starts running on the day the court informs the heir about their right,
• it may be claimed at the court by word of mouth or in writing,
• if it isn’t claimed within one month or the heir waives it, the decision is final and can’t be revoked,
• the heir is held fully liable for any and all of the testator’s debts if they don’t claim or waive the right.

Disclaiming an inheritance – why and how?

Each heir has the right to refuse the inheritance. They usually do so when the testator’s debts exceed the assets. Four ways of refusing an inheritance exist; they differ in both how they work and in the time at which they come into play.

Renouncing the inheritance right

If you wish to renounce your inheritance right, you must do so while the testator lives. Together, you’ll sign an agreement legalized by a notary that will exclude you from the probate. This agreement may be voided, provided it comes in writing, in the form of a public deed and during the testator’s life.

Renouncing the inheritance right extends to the heir’s descendants by default; however, they are free to stipulate otherwise in the agreement.

This option isn’t used much in practice. However, it may prove useful, for example, for a devisor who has three daughters and has already donated a building plot to one of them, so that she can build a house with her husband. As he hasn’t given the other two daughters anything, he wants to treat them fairly while preventing disputes after his death. He may therefore sign an inheritance renouncement agreement with the first daughter, thus excluding her from the probate.

Refusing an inheritance with the exception of its mandatory share

Unlike other heirs, a forced heir (a testator’s descendant) may not refuse the whole inheritance. A so-called mandatory share, that is, a quarter of the share that they would receive if they didn’t refuse the inheritance, always belongs to them. The share is calculated from the assets’ value and comes free from any eventual debt.

Relinquishing an inheritance

The last way to disclaim an inheritance, or at least its share, is relinquishing an inheritance in favour of another heir. The relinquishment is done at the court and requires the consent of the heir in whose favour you’re relinquishing your share. It’s possible to relinquish either the whole inheritance or only a portion.

Probate costs

And what fees do you pay at the probate? Although the inheritance tax (also known as estate duties or death tax) has been abolished and the heirs are also exempt from the income tax, be prepared to pay the notary. Their fee is calculated from the estate property’s value and includes any additional expenses of the probate. In 2021, the notarial fees were raised to the following amounts:

• Of the first 500,000 CZK, the notary gets 2 % or at least 2,000 CZK,
• 1.2 % of the exceeding amount up to 500,000 CZK,
• 0.9 % of the exceeding amount up to 1,000,000 CZK,
• 0.5 % of the exceeding amount up to 3,000,000 CZK,
• 0.1 % of the exceeding amount up to 20,000,000 CZK.

The total is distributed among the heirs according to their share.