Have you been contacted by a notary regarding the inheritance procedure, but instead of the acquired wealth you expect problems with debts? We will advise you on how to proceed in such a situation and whether the best solution is to refuse the inheritance altogether.
On the death of a person (called the testator), the right of inheritance arises and the proceedings on the estate, often referred to as succession proceedings, are initiated. Its purpose is to decide on the heirs and their share of the deceased’s estate. It should be mentioned at the outset that the subject of the succession proceedings is not only the property but also any debts.
Inheritance proceedings are initiated by the competent court on the basis of the death certificate, a copy of which is automatically forwarded to it by the local registry office. The court then selects a notary who is in charge of the entire procedure. The notary is thus never chosen by the survivors themselves, primarily in order to preserve impartiality. The assigned notary is published on the website of the Chamber of Notaries of the Czech Republic, together with their contact details. However, it is not necessary to actively contact the notary at all.
The first act of the notary is to conduct a preliminary investigation. For this purpose, the notary usually summons the person who took care of the funeral arrangements. The aim is to find out as much information as possible about the property, debts, heirs and the possible existence of a will or other documents, which may include, for example, a succession contract. The notary then checks all the information he has found, especially in cooperation with the heirs and other close persons. He also checks, among other things, banking institutions, insurance companies and, last but not least, the records of the Chamber of Notaries, where wills and other documents created in cooperation with notaries are stored.
Once the notary has the necessary information and documents at his disposal, he convenes a ‘ final hearing‘ at which the survivors who are entitled to a part of the estate attend.
Rejection of inheritance cannot be reversed
Before you refuse an inheritance, consult a lawyer about the consequences. Within 48 hours you will be clear on the best next step to take.
In the final hearing, an inventory of the estate, i.e. of all assets and debts, if any, is drawn up specifically as of the date of death. The value of the assets is ascertained. In the case of real estate, land, vehicles and other more valuable assets, an expert’s report is required (the notary chooses the expert, again to preserve impartiality), while for other assets, a consensus on the value between the heirs is sufficient.
If the heirs agree on everything, a simple list of assets is drawn up and a declaration of agreement is signed. However, if there are disagreements, a so-called inventory of the estate must be prepared. This can be recommended especially in situations where it is not clear whether the estate is over-indebted or not, i.e. whether there are larger estates or debts.
The inventory is prepared by a notary in cooperation with a forensic expert, who in such a case will estimate the value of all assets, not only the more valuable ones. An inventory of the estate is also needed in cases where no heirs declare themselves or where the will contains legal errors and cannot be clearly followed.
In the case of possible inherited debts, it is important to be wary. Heirs are liable for the debts of the testator even beyond the value of the inheritance they have received. You can defend yourself against this with a reservation of the inventory of the estate. This will limit the extent of your liability for the heir’s debts. You will still be liable to pay the debts jointly and severally with the other heirs (if there are more than one heir), but the creditor can only require you to pay up to the value of the inheritance acquired.
What you should remember about the right to reserve the inventory of the estate:
Tip: In the case of a risky inheritance, we recommend exercising the right to reserve the inventory of the estate or consulting a lawyer.
Every heir has the right to refuse an inheritance. Most often, such a decision occurs when the debts of the testator exceed his estate. There are four ways to refuse your right to inherit. These differ not only in the way they are carried out, but also in their timing.
If you wish to renounce your right of succession, you must do so during the testator’s lifetime. Together, you will sign a notarised contract exempting you from subsequent succession proceedings. The contract can be revoked if necessary, but again only in writing and in the form of a public deed – so it is essential that the revocation also takes place during the lifetime of the testator.
The renunciation of the right of succession also applies to the descendants of the heir who has renounced his or her right of succession, unless otherwise agreed in the contract.
This institution is not widely used, but it may be practical, for example, for a testator who has three daughters and gives one of them a plot of land during his lifetime so that she and her husband can build a family home. Since he did not give anything to the other two during his lifetime, he wants to share them fairly and also avoid any disputes after his death. He can enter into the given contract of renunciation with the gifted daughter and thus exclude her from further inheritance.
It is possible to refuse an inheritance even after the death of the testator. An express declaration must be addressed to the competent court within one month of the date on which the heir was notified of this right (the time limit is extended to three months for heirs living abroad). As a rule, the refusal is made directly at the court hearing, but it is also possible to address it to the court outside this event. The refusal is irreversible and if the heir refuses his/her share, he/she loses his/her possibility of appeal. The inheritance cannot be refused only in part – the whole share is always refused.
A non-probate heir (descendant of the deceased) may, like any other heir, renounce the whole of the inheritance, including the so-called mandatory share, which for adult heirs consists of a quarter of the share that would normally have been due to him (if he had not refused the inheritance).
However, the law also allows him to refuse subject to the compulsory share, i.e. one quarter of his legal share. This share is free of all debts and is calculated on the value of the estate.
Another option for an heir to “dispose” of his share or at least part of it is to renounce the inheritance in favour of another heir. Renunciation of the inheritance takes place in the context of a court hearing and requires the consent of the other heir in whose favour the heir renounces his or her inheritance. It is possible to renounce not only the whole inheritance but also part of it.
A relative novelty in Czech law is the possibility of alienation of inheritance. Alienation of inheritance consists in a bilateral or multilateral expression of the will of the heir and the acquirer of the inheritance in the form of a public deed. It therefore has similar features to a renunciation of the succession, except that the other party to the contract may be anyone, not just the person designated by the will or by law as the heir.
What about the fees for succession proceedings? Although inheritance tax has been abolished in the past and heirs are also exempt from income tax, inheritance proceedings still cost something. It is necessary to pay for the services of a notary. The fee, which is regulated directly by a decree, is based on the value of the estate and includes any other costs involved in preparing the succession proceedings. Since 2021, the notary’s remuneration has been increased to the following values:
The final amount shall be apportioned among the heirs on a pro rata basis according to the amount of their inheritance.
Tip: The law on inheritance is one of the five most frequently used parts of the Civil Code. Read also about the other four.
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