Succession contract: what are the rules and how to draw it up

Inheritance contract – the strongest inheritance title

The succession contract is one of the three succession titles, which is the legal basis for inheriting property from a deceased person (the testator). In addition to the contract of succession, there is also a will and intestate succession, which are hierarchically subordinate to the contract of succession. This means that if the testator has left both a contract of succession and a will, succession will be primarily under the contract of succession. Only in the event of the exhaustion or absence of these two legal titles does succession by operation of law occur.

The contract of succession and the will are often confused, but they are substantially different:

• Legal nature: A succession contract is a bilateral legal act between the testator and the heir and its modification requires the consent of both parties. X A will is a unilateral legal act and can be modified or revoked by the testator at any time.
• Scope: The contract of inheritance can cover a maximum of three quarters of the estate, the remaining quarter must be left free for another title (e.g. will or intestate succession). X Although the will can cover the whole estate, the testator must respect the right of the non-nominal heirs (children).
• Formalities: the contract of succession must be made in the form of a public deed (notarial deed). X The will may be made in the testator’s own handwriting, in the form of a notarial deed or with two witnesses (different forms of will).

The third and weakest form of succession by operation of law is then governed by legal rules that determine who the legal heirs are and how the estate is divided. Legal succession is based on so-called inheritance classes, which determine the order of heirs according to kinship ties.

Terms of the succession contract

The conditions for the form of the contract of succession are stricter than for a will and if they are not complied with, the contract could be considered invalid. These basic conditions include:

• Voluntariness: the contract of succession must be entered into voluntarily and by mutual consent. Neither party must be forced to enter into the agreement (e.g. by coercion or threats). Otherwise, the contract would be invalid.
• It must be a public deed: The form of the contract of succession must be a public deed, which means that the contract must be drawn up in the form of a notarial deed. The notary not only verifies the identity of the contracting parties, but also ensures that the contract is in accordance with the law and that the parties entered into it voluntarily. A succession contract without a notarial deed would be invalid.
• A quarter of the inheritance must be left freely: the testator may bequeath a maximum of three quarters of his estate by a succession contract. The remaining quarter must be left free by the testator. However, he may bequeath the remaining property to the other party by making a will. This limitation serves to ensure that the testator is not fully restricted in how he disposes of his property and is able to decide on part of his property in the future.
• Both parties must be of full age and of legal capacity: The parties to the contract of succession must be of full age and of legal capacity. This means that both the testator and the future heir must be over 18 years of age at the time the contract is concluded and must not have any impairment of their legal capacity.
• The contract must not go against the non-nominee heirs: Non-nominal heirs are persons who are legally entitled to a certain part of the inheritance, even if they would have been omitted in the will or succession contract. In practice, these are the children of the deceased and their possible descendants. Therefore, if the succession contract omits the non-delegable heirs or allocates them less than they are entitled to, the contract will not be valid in this part.

Special features of the succession contract

A succession contract can take various forms. Specific cases include the negative content of the contract of succession, the conditions for succession and the contract of succession between spouses:

Negative content

The contract of succession may contain a provision whereby the heir voluntarily renounces his or her right to the inheritance. This option is often resorted to if the property is divided among the heirs during the testator’s lifetime.

To illustrate this situation in concrete terms, consider the following example: parents have three children and own a house which the youngest child shares with them. The parents, together with all their children, agree that their house will go to the youngest sibling, with the understanding that he or she will buy them out of the house. They therefore sign an inheritance contract in which the two eldest siblings renounce their right to inherit the house.

Conditioning of inheritance

The contract of inheritance may contain conditions that must be met in order for the heir to inherit the property. The testator may require the heir to meet certain requirements or reach a certain state or lose his or her right to the inheritance. However, these conditions must not violate moral principles or public policy.

For example, the succession contract may stipulate that the heir will only receive the inheritance if he or she finishes college or takes care of the deceased’s beloved dog after the death of the deceased.

Inheritance agreement between spouses

A specific type of inheritance contract is an inheritance contract between spouses or fiancés in the event of a marriage. In this case, one spouse may name the other as heir or they may name each other as heirs. In the case of fiancés, this succession contract comes into force only after the wedding.

In this case, however, it must be taken into account that a divorce will not annul this succession agreement. However, the automatic termination of the succession contract with the dissolution of the marriage can be written directly into the succession contract. Otherwise, it must be revoked in the classic way. Annulment can also be sought in court after the divorce, but only if the divorce is due to the actions of the other spouse.

Amendment and revocation of the contract of succession

A will can be easily amended or revoked by rewriting it or by writing a new will. However, a testamentary contract is a bilateral act and therefore the consent of both parties (i.e. the heir and the testator) is required to revoke or amend it. It also applies that any modification or revocation of the succession contract must again be made by means of a public deed.

When is a contract of succession null and void

A contract of succession can be declared invalid for various reasons relating to both formal and substantive requirements:

• Failure to comply with formal requirements: the contract of succession is invalid if it does not comply with formal requirements. Typically, it will not be a contract of succession if it is not in the form of a public deed. However, it may still be valid as a will. In this case, however, it needs to meet the formalities of a will.
• Minority or incapacity: It will also be invalid if one of the parties is a minor or an incapacitated person.
• Involuntariness: A succession contract will not be valid if it was concluded under duress, threat or coercion. In order for a contract of succession to be valid, all parties must act freely and voluntarily.
• Violation of the rights of the non-nominee heirs: Certain parts or even the whole succession contract will not be valid even if it does not respect the rights of the non-nominee heirs to their legal share
• Non-compliance with good morals: the succession contract must not be contrary to law and good morals. Thus, the testator cannot require the heir to perform an illegal act or, for example, to marry in order to acquire the inheritance.
• Vagueness: If the property to be inherited is not clearly and specifically defined, the contract may be void for vagueness.
• Exceeding share: A testator may only bequeath three-quarters of his or her estate by contract. If the contract covers more than three quarters of the estate, this part of the contract may be declared null and void. The exceeded portion would then go to inheritance by will or by operation of law.

Advantages and disadvantages of a succession contract

A contract of succession offers several advantages, but also certain limitations that are important to consider before entering into it:

Advantages

• Legal certainty for the heirs: a contract of inheritance gives the heirs the certainty that they will receive the property according to the agreed terms after the death of the deceased, as the contract cannot be changed unilaterally. This can be particularly advantageous in cases where the testator wants to make sure that a particular heir will have a legally enforceable right to the property.
• Binding on the testator: unlike a will, the testator cannot unilaterally change or cancel the contract. This ensures that his or her decision on the succession remains fixed and prevents any future changes under pressure or circumstances.
• Possibility to include conditions: the succession contract may contain various conditions that the heir must fulfil in order to receive the inheritance. This allows the testator to impose specific requirements, such as a requirement to complete education, provide care or manage the estate.
• Protection against disputes: By making the contract binding and clearly defining the terms, a succession contract can minimise the risk of disputes between heirs after the death of the testator. If the terms are clearly specified and approved by a notary, the contract is difficult to challenge.
• Combination with other inheritance instruments: the succession contract allows the testator to distribute up to three quarters of his estate, the rest can be freely bequeathed by will or by law. This allows flexibility in the distribution of property.

Disadvantages

• Limited ability to change: the main disadvantage is that once the contract is concluded, it cannot be unilaterally changed or cancelled. This is because any changes require the consent of the heir, which can be restrictive in some situations.
• Limitation to three quarters of the estate: A testator can bequeath no more than three-quarters of his or her estate by contract of inheritance, which means that it is not possible to divide the entire estate by this contract. This share must be freely available for other modes of succession.
• Need for notarial deed and higher costs: the contract of succession must be drawn up in the form of a notarial deed, which entails higher costs linked to the notary’s fees. This process can also be more time-consuming and requires the personal presence of both the testator and the heir.
• Necessity to respect the rights of non-minor heirs: Although the contract is binding, non-minor heirs are legally entitled to a certain share of the estate. If the contract does not respect their rights, it may be partially invalid, which can lead to litigation and other complications.

Summary

The contract of inheritance is the strongest inheritance title, taking precedence over wills and intestate succession. A succession contract is a bilateral legal act between the testator and the heir, and amendment or revocation requires the consent of both parties. The contract may cover a maximum of three-quarters of the estate, leaving the remainder available for other forms of succession. The succession contract must be in the form of a public deed and must respect the rights of the non-nominee heirs.