What about the inherited debt in 2026?

Quick summary

• An inheritance includes not only the property but also the debts of the testator.
• The inheritance can be rejected, but only as a whole and within a specified period of time.
• The reservation of inventory protects the heirs from paying debts in excess of the value of the acquired inheritance.
• Special care should be taken with minor heirs and over-indebted estates.
• Before accepting an inheritance, request an inventory of assets, debts and communicate with the notary.

Are you dealing with an inheritance burdened with debts? We can help you and assess whether it is appropriate for you to reject the inheritance, exercise the inventory reservation, or choose another course of action.

What does inheritance involve

The death of a loved one is one of life’s most difficult situations. Settling an inheritance can often be a long haul, especially if the survivors cannot come to an agreement.

An inheritance is seen as a right to the estate – that is, the totality of the deceased’s assets, which can include both property and debts. It is only from the estate as a whole that individual heirs are awarded shares – shares in the estate. The only things that do not form part of the estate are, for example, rights and obligations that are so strongly linked to the person of the testator that it is not possible for them to pass to someone else.

The problem, of course, is that because the estate is taken as a whole, it is possible that the debts will be as high as the value of the estate or exceed it. The debts of the testator then pass to the heirs (although the law may provide for exceptions, but these are only the bare minimum).

In the event that such a situation should arise, there are four ways to avoid the estate (or part of it) being passed on to the heirs that is burdened with debts:

I. Renunciation of the right of succession

This is dealt with before the death of the testator. In this case, the heir and the testator must sign a waiver of the right of succession by means of a contract in the form of a public deed, typically a notarial deed. The rights and obligations under this contract may later be waived by the parties by written agreement.

The renunciation of the right of succession also applies to the descendant of the heir who has renounced his right of succession, unless otherwise agreed in the contract.

This 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.

II. Refusal of inheritance

This option occurs if the testator is already deceased. An express declaration must be addressed to the competent court within one month of the date on which the heir is notified of this right (the time limit is extended to three months for heirs living abroad). For important reasons, the court may extend the time limit accordingly. 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 of succession is irreversible. The inheritance cannot be refused only in part – the entire share is always refused.

III. Renunciation of inheritance

This takes place before the court in the succession proceedings, in favour of another heir – but the other heir must also agree to this. It is possible to renounce not only the whole inheritance but also part of it.

IV. Refusal of the succession subject to the mandatory share

Refusal of inheritance is the simplest and surest way to avoid the situation described above. The intestate heir (a descendant of the deceased) may renounce the whole of the inheritance, including the so-called obligatory share, which consists of one quarter of the share (three quarters in the case of minors) 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 a 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.

Inventory of the estate

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 more complex or disputed cases, typically for more valuable assets or where the heirs disagree on the value, the value may be established by an expert’s report.

If the heirs agree on everything, a simple list of the property is made and a declaration of agreement is signed by the heirs. 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.

The heir may also propose that the estate be inventoried – i.e. that the value of the estate be determined and the debts that are part of the estate be taken into account; the court will then order the inventory.

Avoid mistakes in the will and leave it to us. We will prepare the will exactly according to your requirements and at the same time according to the applicable regulations so that it is irrefutable. All this within five working days and at a predetermined price.

Reservation of the inventory of the estate

At the same time, it is possible to propose that the court publicly invite creditors to declare their claims against the testator – i.e. to come forward with the fact that the testator owed them something and these debts are then included in the estate. This can limit the cases where the debts will exceed the assets in the estate – even if all the assets are to be used only to pay the debts.

If this procedure is used, only those creditors who apply within a certain time limit and only up to the value of the acquired estate will have the right to settle the debt. Thus, it is possible for an heir to get to zero, but not to the negative. However, there are also exceptions to this possibility, so it will not be 100% effective (e.g. if the creditor has a lien or other similar right on some item that belongs to the estate).

Example from our law practice

Mrs. Benešová contacted us after the notary informed her about her father’s inheritance proceedings. Initially, it seemed that the estate consisted mainly of an older apartment and ordinary household furnishings. Shortly afterwards, however, information about several loans, a credit card debt and a possible promissory note claim came to light, which the family had not known about until then.

We first reviewed with the client the available deeds, bank statements, correspondence from creditors and documents from the notary. We explained to her the difference between rejecting an inheritance and filing an inventory objection. Because the value of the apartment likely exceeded the debts, but their ultimate extent was unclear, we recommended filing an inventory reservation of the estate and requesting a careful determination of the liabilities.

As a result, the client did not lose her inheritance, but at the same time she significantly reduced her risk of having to pay debts in excess of the value of the property she actually acquired.

Overall, you need to think carefully about whether you will actually accept the inheritance. Be careful with minor children, as they may also be heirs, but you will usually act for them as their legal representatives. It may therefore happen that you do not refuse the inheritance, although this may be appropriate in the case of a heavily indebted estate, the court confirms the inheritance and then problems arise with indebted minors who have a much more difficult entry into adulthood.

Summary

An estate consists not only of the assets but also the liabilities of the testator, and therefore an heir can easily find himself or herself in a situation where he or she must deal with loans, unpaid invoices, credit or other debts. The most important thing is not to act hastily and to find out what assets and liabilities actually belong to the estate.

If you do not want to accept the inheritance at all, you can refuse it. But you must do so within the legal time limit and take into account that refusal is a crucial and usually irreversible step. If you want to keep the inheritance but are worried about unknown or higher debts, a reservation of the inventory is often a practical solution. This limits your liability for debts to the value of the inheritance acquired.

Particular attention should be paid to cases where the heirs are minor children, where the heirs disagree among themselves, or where the creditors are heard only gradually during the proceedings. In such situations, it is advisable to consult a lawyer before making a declaration before the notary, which cannot be easily changed.