The purpose of a probate is to determine the estate property of a decedent, to whom it should belong and how it ought to be divided. It commences when the relevant court is informed about the decedent’s death. It’s also the court that appoints a notary to administer the probate – the survivors can’t choose one themselves.
Determining the estate property
The notary examines the scope of the estate and subsequentially contacts all the involved persons of their own accord. During the process, they especially discern whether a will, mutual wills, or, e.g., a disinheritance deed concerning one of the heirs, exists. For that purpose, they also check the Central Wills Record administered by the Notarial Chamber of the Czech Republic. However, the eventual will needn’t be recorded therein even if it was duly signed, as the law doesn’t require it to come in the form of a notarial (or any other) record.
The notary can obtain further data by contacting the asset holders, such as banks and insurance companies, by checking the Land Register, Companies Register, Trade Register and other records. This examination may take considerably longer if a portion of the estate is situated abroad – the probate, which usually takes several months, then extends to one or even several years. The latter holds true especially if one of the heirs hasn’t reached legal capacity, as their actions need to be approved by the guardianship court.
Disputes among heirs
The probate determines the value of both the assets and debts. If, however, the estate value is obviously low and no dispute among heirs breaks out, their agreement about it suffices, as the value of an estate is primarily determined by the joint declaration of heirs.
On the other hand, if the heirs have opposing views of the estate value and therefore aren’t able to reach an agreement, or if they agree on an apparently wrong value, an expert appointed by the notary must appraise any and all significant portions of the estate, such as real estate property, greater moveables and other property subject to the probate.
Among other disputes that sometimes need to be settled during a probate is the authenticity of an heir’s claim. However, a notary doesn’t have the right to examine the facts of the case; the issue must be handled as a separate court process.
Substantial gifts given to an heir by the devisor in the last three years prior to their death may further complicate the probate, as in this case, a so-called collation may be required to justly redistribute the values donated during the testator’s life.
Tip: A separate article deals with disputes during a probate, especially with collation.
Prevent disputes with other heirs
If the heirs can’t agree on the estate value or its division, we recommend consulting a professional to prevent a family conflict.
Find out how best to proceed
To conclude the probate, all the potential heirs attend the final proceeding, where the eventual will and the estate property list is read. If any estate property is discovered thereafter, it’s negotiated in an additional proceeding.
Family settlement agreement
Even if it previously came to expert opinions, the heirs remain free to enter into a family settlement agreement thereafter. This is not to be confused with mutual wills, which is signed by the devisor and an heir. In a family settlement agreement, the heirs agree on the distribution of the estate. This variant is definitely preferable to dividing the estate according to the shares and the subsequent bickering about who should pay whom.
The agreement may define the estate property and apportion it to individual heirs, as well as name any persons who disclaim the inheritance. If an estate can’t be divided fairly, it may bind the heir with a share greater than to which they’re entitled. Once a sum is defined, the heir must then pay off the other heir(s) within a certain period of time.
A family settlement agreement is only valid when entered into at the notary or court and when all the heirs consent to it. Also, it must pertain to the whole estate.
Order to distribute the estate
If the heirs fail to reach an agreement, the notary issues the order to distribute the estate according to legal shares of the individual heirs, which definitely concludes the probate.
Debts are inherited quite frequently, and the heirs share them in the same fashion as assets. An unrepaid loan or mortgage doesn’t necessarily represent a problem, provided the estate assets outweigh it. Nonetheless, the heirs needn’t accept the inheritance, with or without debts. Generally, they may opt for any one of the following three variants of disclaiming the inheritance:
- Refusing an inheritance – an heir has the right to refuse the whole inheritance within a month of the day they were informed about the probate. The refusal can’t be revoked.
- Relinquishing an inheritance in favour of a third person, who, naturally, must consent to it.
- Accepting an inheritance with the benefit of estate inventory represents a somewhat less radical alternative to refusing the whole inheritance. The heir who accepts it with the benefit of inventory is still held liable for the testator’s debts; however, creditors may only claim performance not exceeding their inheritance share. Although this variant may appear advantageous, we only advise you to opt for it if you expect enormous debts, as the estate inventory doesn’t come free and under certain circumstances, it may be the heir, who is accepting the inheritance with its benefit, who must pay for it.
Tip: The previous article discusses disclaiming an inheritance in detail.
Expenditures connected with an inheritance
Funeral costs usually come first and should be borne by all the heirs according to their shares of the inheritance.
Moreover, you’ll need to pay the notary. A regulation on their fees states that these are to be calculated as a portion of the decedent’s estate, with the minimal amount of 2,000 CZK, or 1,000 CZK if no or only a minute estate exists. Otherwise, it’s calculated as follows:
- Of the first 500,000 CZK, the notary gets 2 % or at least 2,000 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,
no charge for amounts exceeding 20,000,000 CZK.
In addition, the notary claims any purposeful expenses connected with their services, e.g., postage fees, copying, duplicates, phone calls, etc., which amounts to 300 CZK.
Many people aren’t sure about the inheritance tax, also referred to as estate duties or death tax. However, this has long been abolished in Czechia. In addition, the inheritance of physical persons is exempt from the income tax as well.
Inheriting real estate
Some assets are divided easily – for instance, an account balance distribution requires nothing but the identification of the heirs and their shares. On the other hand, dividing real estate can pose a problem. Must it be sold and the profit divided? Or need it be occupied jointly? And what about inheriting a coop flat? These are some of the frequently asked questions.
Inheriting a freehold flat doesn’t complicate matters much. Once you have the property appraised properly and find out whether it was or wasn’t a part of matrimonial property, the flat is handled just like any other property.
With cooperatively-owned flats, the matter isn’t so simple, as it’s the housing cooperative who actually owns them, so merely a cooperative share is inherited. With a single heir, it’s naturally them who receives the share along with the right to lease it.
Matters become complicated with more than one heir, as the cooperative statutes only allow for a single person to own a coop share; therefore, it’s necessary to select one. An agreement comes first – if one heir shows prominent interest in the flat, while others content themselves with other estate property or don’t mind being bought out, they’re free to sign an agreement.
If such an agreement is out of question, for example because no other estate property exists and none of the heirs has enough money to buy the others out, they may agree that one of them will become the owner of the coop share and bind themselves to sell it and pay off the others within an agreed-upon time frame.
A different scenario comes into play when the share was a part of matrimonial property. Such a share isn’t subject to probate; it’s directly transferred to the surviving spouse instead. If other eligible heirs exist as well, a so-called “receivable to be paid by a surviving spouse for the reason of joint membership in a housing cooperative” is negotiated, which amounts to half of the market value of the coop flat in question.
You needn’t fear the probate. The notary will guide you through the whole process, and will usually do their best to lead the heirs to an agreement. If, however, you feel that the agreement disfavours you, or you don’t understand the situation, do seek out legal advice in time.