Refusal of inheritance: when it pays and what the consequences are

Quick overview

After the death of the testator, the heir may refuse the inheritance by making an express declaration to the court. As a rule, he has one month from the date on which the court informs him of this right to refuse; if his only residence is abroad, it is three months. A non-missing heir may also refuse the succession subject to the mandatory share. He who refuses the succession shall be regarded as if he had never acquired it. If the heir does not refuse the inheritance but is afraid of debts, it is often safer to use the reservation of the inventory of the estate, as this limits his liability for debts to the value of the inheritance acquired.

How the inheritance procedure works

Probate proceedings begin after the death of the testator in court. The court appoints a notary as court commissioner to conduct the succession proceedings. The notary establishes the circle of heirs, the existence of a will or succession contract, the deceased’s assets and his debts. Only when it is clear who is to inherit and what belongs to the estate, is it decided whether the heirs will accept the inheritance, refuse it, or make a reservation of inventory. Inheritance proceedings do not only concern property, but also debts. This is fundamental to the heir’s decision-making.

In practice, it often only comes to light during the preliminary investigation that the testator not only had an account and a flat, but also business debts, consumer loans or guarantor liabilities. This is when it makes sense to quickly decide whether it is more advantageous to reject the inheritance or at least reserve the inventory.

Refusal of inheritance: what exactly does it mean

The heir has the right to refuse the inheritance after the death of the deceased. However, he must do so by making an express declaration to the court. If he refuses the inheritance, he is regarded as if he had never acquired the inheritance. In other words, he or she “drops out” of the succession proceedings and is treated in the same way as if the heir had never inherited at all.

This is a fundamental difference from the inventory reservation. In the case of a disallowance of inheritance, the heir receives nothing of the estate, but at the same time the debts of the estate do not pass to him. With an inventory reservation (see below), he accepts the inheritance but protects himself from paying more than he actually inherited.

Practical example: the father is left with an older family house but also with high debts from his business. The son does not want to take the risk of dealing with unexpected creditors years later. If he refuses the inheritance, he will inherit neither the house nor the debts. If he only reserved the inventory of the estate, he could accept the inheritance, but would only be liable for the debts up to the value of the inheritance acquired.

Time limit for refusal of inheritance

There is no unlimited time to refuse an inheritance. The succession may be refused within one month from the date on which the court has informed the heir of his right to refuse the succession and of the consequences of refusal. If the heir has his sole residence abroad, the time limit shall be three months. The court may extend the time limit proportionately for important reasons. On expiry of the period, the right to refuse the succession shall cease.

In practice, it is important not to count the time limit from the death of the testator but only from the moment when the heir is duly instructed by the court. At the same time, it is not worth waiting until the “last minute” if it is obvious that the succession will be problematic.

Only the whole succession can be refused, not part of it

A succession cannot be refused only in part. The law expressly provides that refusal of an inheritance conditionally, with reservation or only in part is invalid. This means that it is not possible to keep, for example, a cottage and reject only the debts or “everything but the car”.

The exception is the situation of a non-minor heir who can refuse an inheritance subject to the obligatory share. This is a special legal option for a descendant of the testator. Thus, the non-mutual heir does not have to accept the whole inheritance but may retain the right to the mandatory share.

When the inheritance can no longer be refused

The refusal of an inheritance is not taken into account if the heir has already indicated by his or her actions that he or she wishes to accept the inheritance. Similarly, an attempt to withdraw the refusal or to amend an earlier declaration that he accepts or does not reject the succession shall not be taken into account.

This is very sensitive in practice. If the heir starts to behave like the owner of the property of the estate, he or she may thereby lose the possibility of refusal. It is therefore wise not to arbitrarily dispose of the deceased’s property until it is clear how the heir will decide.

Reservation of inventory: often better than a complete refusal

Many people feel that when debts exist, the only safe solution is to reject the inheritance. However, this is not always true. The Civil Code gives the heir the right to reserve the inventory of the estate. If he or she does so in time, he or she pays the debts of the testator only up to the value of the acquired inheritance. If he does not make the reservation, he pays the debts in full.

In addition, in the case of multiple heirs, each heir who has claimed the inventory reservation shall pay the debts jointly and severally with the others, but the creditor may only require him to pay up to the amount corresponding to his share of the estate.

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

How the inventory reservation applies

The right to reserve the inventory can be exercised orally before the court or in writing to the court. The heir has one month from the date on which the court notifies him of this right. The court may also extend this period for important reasons. If the heir does not claim the reservation of inventory in time, he shall bear the debts in full.

The law also takes into account that the testator cannot withdraw the heir’s right to reserve the inventory. Nor can it be validly agreed in the succession contract that the heir will not have this protection.

Renunciation of the right of succession during the lifetime of the testator

The renunciation of the right of succession is another legal institution that takes place during the lifetime of the testator, by means of a contract between the testator and the future heir. This contract must take the form of a public deed. Unless otherwise agreed, the renunciation also operates against the descendants. Whoever renounces the right of inheritance thereby renounces the right to the obligatory share. However, only the right to the obligatory share may be waived.

This is used in practice , for example, when a parent significantly favours one child during life and wants to avoid future disputes between siblings.

Renunciation of the inheritance in favour of another heir

Another option is to renounce the inheritance. However, this is only possible after the death of the testator and only if the heir has not refused the inheritance. The heir may renounce the inheritance in favour of the other heir in the succession proceedings before the court. If the other heir does not agree, the renunciation shall not be taken into account. In the case of a non-minor heir, the renunciation of the succession shall also waive the right to the obligatory share, with effect for his descendants.

This is practical, for example, between siblings if one of them does not wish to participate in the inheritance and agrees that his or her entire share should go to the other.

Alienation of inheritance

Alienation of inheritance is different from renunciation of inheritance. After the death of the deceased, the inheritance can be disposed of by a contract which requires a public deed. Moreover, the purchaser does not have to be another heir, but in principle anyone. The acquirer enters into the rights and obligations of the estate.

This is not a very common institution in ordinary practice, but it may make sense, for example, where the heir does not want to wait for the final settlement and wants to transfer his or her hereditary position to another person.

Costs of succession proceedings

Inheritance tax is not paid today and inheritance is also exempt from income tax for individuals, unless there are other related tax situations. However, the estate proceedings themselves are not cost-free. The notary’s remuneration and other out-of-pocket expenses are paid according to the notary’s tariff. In any event, the costs of the proceedings must be taken into account when considering whether to accept or reject the succession.

Summary

Rejecting an inheritance is a powerful and usually irreversible step. The heir must expressly reject the succession vis-à-vis the court and within a specified period of time. Only the whole inheritance can be refused, not part of it, and if the heir has already begun to behave in a way that constitutes acceptance of the inheritance, it is usually too late. In many cases, however, it is not necessary to refuse the inheritance entirely. If the problem is mainly uncertainty about debts, it is often more practical to invoke the reservation of the inventory of the estate, thereby limiting liability for debts to the value of the inheritance acquired. In addition, there are also waivers of the right of inheritance during the lifetime of the testator, renunciation of the inheritance in favour of another heir and alienation of the inheritance.