Renouncing an Inheritance: When It’s Worth It and What the Consequences Are

Quick Overview

An heir may renounce an inheritance after the decedent’s death by making an explicit declaration to the court. The heir generally has one month from the date the court informs him or her of this right to renounce the inheritance; if the heir’s sole residence is abroad, the period is three months. A mandatory heir may renounce the inheritance even while reserving their statutory share. Anyone who renounces the inheritance is deemed never to have acquired it. If an heir does not renounce the inheritance but is concerned about debts, it is often safer to exercise the right to an inventory of the estate, as this limits their liability for debts to the value of the inherited estate.

How Probate Proceedings Work

Probate proceedings begin in court following the decedent’s death. The court appoints a notary as a probate commissioner to conduct the proceedings. The notary determines the circle of heirs, the existence of a will or inheritance agreement, and the decedent’s assets and debts. Only once it is clear who is to inherit and what is included in the estate is the question addressed of whether the heirs will accept or reject the inheritance, or whether they will exercise the right to an inventory. Probate proceedings concern not only assets but also debts. This is crucial for the heirs’ decision-making.

In practice, it often becomes apparent only during the preliminary investigation that the decedent had not only a bank account and an apartment but also business obligations, consumer loans, or guarantees. That is precisely when it makes sense to quickly determine whether it is more advantageous to renounce the inheritance or, at the very least, to reserve the right to an inventory.

Renouncing an Inheritance: What Does It Mean Exactly?

An heir has the right to renounce an inheritance after the testator’s death. However, they must do so by making an explicit declaration to the court. Anyone who renounces an inheritance is treated as if they had never acquired it. In other words, they are “excluded” from the probate proceedings, and their share is treated as if they had never inherited anything at all.

This is a fundamental difference from the right to an inventory. When an heir renounces an inheritance, they receive nothing from the estate, but at the same time , the debts of the estate do not pass to them. When making a reservation of inventory (see below), the heir accepts the inheritance but protects themselves from having to pay more than what they actually inherited.

Practical example: A father leaves behind an older family home, but also significant business debts. The son does not want to risk having to deal with unexpected creditors years later. If he renounces the inheritance, he will inherit neither the house nor the debts. If he were to simply reserve the right to an inventory of the estate, he could accept the inheritance but would be liable for the debts only up to the value of the inherited estate.

Deadline for Rejecting an Inheritance

There is no unlimited time to renounce an inheritance. An inheritance may be renounced within one month from the date the court notified the heir of their right to renounce the inheritance and of the consequences of such renunciation. If the heir’s sole residence is abroad, the deadline is three months. For important reasons, the court may reasonably extend this deadline. Once the deadline has passed, the right to renounce the inheritance expires.

In practice, it is important not to count the time limit from the date of the decedent’s death, but rather from the moment the court properly informs the heir. At the same time, it is not advisable to wait “until the last minute” if it is clear that the inheritance will be problematic.

Only the entire inheritance may be renounced; not just a portion of it

An inheritance cannot be renounced in part. The law expressly stipulates that a renunciation of an inheritance that is conditional, subject to a reservation, or only partial is invalid. This means it is not possible, for example, to keep a vacation home and renounce only the debts or “everything except the car.”

An exception applies to a compulsory heir, who may renounce the inheritance subject to the statutory share. This is a special legal option available to a descendant of the decedent. A compulsory heir is thus not required to accept the entire inheritance but may retain the right to the statutory share.

When It Is No Longer Possible to Renounce an Inheritance

A renunciation of an inheritance is disregarded if the heir has already indicated through their actions that they intend to accept the inheritance. Similarly, any attempt to withdraw the renunciation or to change a previous statement that the heir accepts or does not renounce the inheritance is disregarded.

This is a very sensitive issue in practice. If an heir begins to act as the owner of the estate’s assets, they may forfeit the option to renounce the inheritance. It is therefore prudent not to dispose of the decedent’s property in any arbitrary manner until it is clear how the heir will decide.

Reservation of Inventory: Often Better Than a Complete Renunciation

Many people feel that if there are debts, the only safe solution is to renounce the inheritance. However, this is not always true. The Civil Code gives the heir the right to reserve the right to an inventory of the estate. If they do so in a timely manner, they are liable for the decedent’s debts only up to the value of the inheritance they have acquired. If they do not exercise this right, they are liable for the debts in full.

Furthermore, when there are multiple heirs, each heir who has exercised the right to an inventory of the estate is jointly and severally liable for the debts with the others; however, a creditor may only demand payment from that heir up to an amount corresponding to their share of the inheritance.

This is very useful in practice, for example, when the decedent left behind an apartment that has value, but it is not entirely clear how many creditors will still come forward.

How to Exercise the Right to an Inventory

The right to the reservation of inventory may be asserted orally before the court or in writing to the court. The heir has one month to do so from the date the court notified him or her of this right. The court may extend this deadline for important reasons. If the heir does not exercise the right to reserve the inventory in a timely manner, they are liable for the debts in full.

The law also provides that the decedent cannot deprive the heir of the right to reserve the inventory. Nor can a valid provision be included in an inheritance agreement stating that the heir will not have this protection.

Renunciation of the Right of Inheritance While the Decedent Is Still Alive

Renunciation of the right to inherit is a separate legal concept that takes place during the testator’s lifetime through an agreement between the testator and the future heir. This agreement must take the form of a notarized document. Unless otherwise agreed, the renunciation is also effective against descendants. Anyone who renounces the right to inherit thereby also renounces the right to a statutory share. However, it is also possible to renounce only the right to a statutory share.

In practice , this legal mechanism is used , for example, when a parent significantly favors one child financially during their lifetime and wishes to prevent future disputes among siblings.

Renouncing an Inheritance in Favor of Another Heir

Another option is to renounce an inheritance. However, this is only possible after the decedent’s death and only if the heir has not previously rejected the inheritance. An heir may, during probate proceedings before a court, renounce the inheritance in favor of another heir. If the other heir does not agree, the renunciation of the inheritance is disregarded. For a mandatory heir, renouncing the inheritance also means renouncing the right to the statutory share, with effects extending to their descendants as well.

This is useful, for example, among siblings, if one of them does not wish to participate in the inheritance and agrees to have their entire share go to the other.

Disposal of an Inheritance

The transfer of an inheritance is distinct from renouncing an inheritance. After the decedent’s death, an heir may transfer their inheritance by contract, which must be in the form of a public deed. The transferee may even be a person who is not an heir themselves. However, through such a transfer, the transferee does not assume the status of heir in place of the transferor. The rights and obligations associated with the inheritance are transferred between the contracting parties to the extent prescribed by law, and the transferor and the transferee are jointly and severally liable to creditors for the decedent’s debts.

In practice, this is not a very common arrangement, but it may make sense, for example, when an heir does not wish to wait for the final settlement and wants to transfer their status as an heir to another person.

Costs of Probate Proceedings

Inheritance tax is not currently payable, and inheritances by individuals are also exempt from income tax, provided there are no other related tax implications. However, the probate proceedings themselves are not free of charge. The notary’s fee and other out-of-pocket expenses are paid according to the notary’s fee schedule. In any case, the costs of the proceedings must be taken into account when considering whether to accept or reject an inheritance.

Summary

Renouncing an inheritance is a significant and generally irreversible step. The heir must expressly renounce the inheritance before the court and within the prescribed time limit. Only the entire inheritance may be renounced, not just a portion of it, and if the heir has already begun acting in a manner that indicates acceptance of the inheritance, it is usually too late. In many cases, however, it is not necessary to renounce the inheritance entirely. If the main concern is uncertainty regarding debts, it is often more practical to exercise the right to an inventory of the estate, thereby limiting liability for debts to the value of the inherited estate. In addition, there is the option of renouncing the right to inherit during the decedent’s lifetime, waiving the inheritance in favor of another heir, and disposing of the inheritance.