Inheritance, Acceptance and Disclaimer
1. Overview
The acceptance of an inheritance or its disclaimer are in many jurisdictions significant steps for the transfer of the decedent’s estate to the heir or, alternatively, for the prevention of such transfer after the death of the decedent. They have, however, very different functions in the European legal systems regarding the transfer of rights in rem to the heir on the one hand and the liability of the heir for the debts of the decedent (liability of heirs) on the other. This is because the transfer of the decedent’s estate to the heir is subject to different legal principles in the various countries due to historical reasons (devolution of the inheritance/universal succession).
2. Legal harmonization
There are thus far no trends for legal harmonization in the European Union in the area of substantive succession law in general (succession law), and acceptance of an inheritance and disclaimer in particular. The EU has no legislative power in respect of succession law, which is regarded as part of national culture just as is the family law from which it has historically developed. Comparative legal studies, however, provide the foundation for a convergence of succession law systems by national reforms.
3. Comparative law
a) In countries where the principle of universal succession with automatic accrual (Vonselbsterwerb) is applied (Belgium, France, Germany, Greece and the Netherlands), the acceptance of an inheritance does not have direct relevance for the transfer of rights in rem. The heir already owns the estate. As the acceptance of an inheritance is irrevocable, the heir in principle (subject to the possibility of avoidance) only loses his right to disclaimer and thus his right retroactively to undo the transfer of title.
In Belgium, France and Greece the acceptance of an inheritance can be declared either unconditionally (pur et simple) or subject to the heir’s limitation of liability to the estate (Belgium: acceptation sous bénéfice d’inventaire, France: acceptation à concurrence de l’actif). In the first case, the estate merges with the assets of the heir, the heir being liable for the debts of the decedent in general with all his assets irrespective of the amount of the estate’s assets (ultra vires hereditatis). In the second case, the assets remain separate if a true and accurate inventory of the estate is drawn up and the legal formalities regarding the satisfaction of creditors are complied with; here the inheritance alone is used to satisfy the debts of the deceased. (Obtaining possession (saisine) is a further requirement for the accrual of the estate in France and Belgium in addition to the acceptance of the inheritance; a court order granting right to possession is, however, only required in cases of the existence of mandatory heirs, holograph wills, or specific legacies.)
In Germany, the acceptance of an inheritance as such cannot be subjected to a condition (§ 1947 Bürgerliches Gesetzbuch (BGB)). Instead, the limitation of the heir’s liability to the estate definitively results from (the application and) the order for the administration of the estate on behalf of the creditors, or the order for the institution of insolvency proceedings regarding the estate or its refusal for lack of funds (insufficient estate). Additionally, there are several dilatory defences available to the heir (until acceptance; three-month defence and the defence of public notice to creditors of an estate to prove their claims). Drawing up an inventory does not as such lead to a limitation of liability under German law. It only preserves the possibility for the heir to apply for the administration of the estate on behalf of the creditors, or for the institution of insolvency proceedings regarding the estate.
Since the unconditional acceptance of the inheritance does not lead to a transfer of rights in rem, acceptance is not subjected to any formal requirements in the countries of universal succession with automatic accrual. An implied acceptance of the inheritance is common but has to be distinguished from interim administration of the estate and conservation measures without the intention of acceptance.
The acceptance of an inheritance subject to limitation of the heir’s liability to the estate must be declared explicitly to the relevant probate court. Similarly, in Germany one has to go before the relevant probate court and specifically make an application for the public notice to creditors of an estate to prove their claims, for the administration of the estate on behalf of the creditors and for the institution of insolvency proceedings regarding the estate.
While in Germany and Greece the acceptance of an inheritance is presumed after the expiration of the disclaimer period (subject to the possibility of avoidance), disclaimer is presumed in Belgium and France after, respectively, 30 or 10 years from the event of succession in the absence of an (implied) acceptance.
b) In countries following the principle of universal succession with accrual on acceptance (Antrittserwerb; Austria, Spain, Italy) the acceptance of the inheritance is a prerequisite—varying in detail from country to country—for the transfer to the heir of the estate which, up to that point, is vacant (hereditas iacens).
Under Italian and Spanish law, the estate accrues to the heir upon express or implied acceptance of the inheritance (accettazione pura e semplice/pura y simplimente) retroactively, the moment when the succession occurred being relevant in this respect. The heir may of course take measures of protection and provisional administration of the estate beforehand, unless, on request, a provisional administrator of the estate has been—exceptionally—appointed by the probate court. Only with the acceptance of the inheritance does the estate merge with the assets of the heir (confusio bonorum), who is then subject to unlimited liability for the debts of the estate (ultra vires hereditatis). The right to accept the inheritance is time-barred after 10 years. The inheritance is considered unconditionally accepted if the heir has taken actions, such as a sale, without having drawn up an estate inventory within three months of the event of succession and without having declared his acceptance of the inheritance subject to limitation of his liability to the estate within a further 40 days in front of a notary or the probate court. Such a conditional acceptance (accettazione con beneficio di inventario/a beneficio de inventario) leads to a separation of the heir’s personal assets and the assets of the estate (separatio bonorum) and a limitation of liability (pro viribus hereditatis).
In Austrian law, the vacant estate (hereditas iacens), which is regarded as a legal entity with capacity to sue and be sued, is at first (except for very small estates) automatically administered by the probate court (Verlassenschaftsgericht). The duties of the probate courts have been largely delegated to notaries (notary public) who act as court commissioners (Gerichtskommissäre). They are obliged to take measures for the protection of the estate and to identify the heirs. The heirs are, in principle, forbidden to take possession of the estate (Verlassenschaftsvermögen) on their own. They are requested to declare whether and, if so, in what way (conditionally or unconditionally) they accept the inheritance, or whether they want to disclaim the inheritance. Probate proceedings (Verlassenschaftsabhandlung) including the devolution of the estate (Einantwortung) are only dispensable for very small and over-indebted estates; they can be directly transferred to the creditors by court order in lieu of payment.
The irrevocable declaration of acceptance of the inheritance (Erbantrittserklärung), which has to be submitted in writing or recorded by a court commissioner, is a necessary prerequisite in Austria for the subsequent transfer of the estate (Einantwortung) by way of universal succession by an order of the probate court.
Heirs that unconditionally declare acceptance of the inheritance are liable for the debts of the estate with all their assets once the estate has been transferred to them. In the case of a conditional declaration of acceptance, the probate court ex officio draws up an inventory of the estate and gives public notice to the creditors (Edikt). In this case the heirs are only liable up to the value of the transferred estate.
c) A disclaimer effects a retroactive transfer of the estate to the next-entitled heir in the countries of universal succession (devolution of the inheritance/universal succession) with automatic accrual and effects the accrual of a retroactive right to succeed to these heirs in countries following the principle of universal succession with accrual on acceptance. Because of its important legal consequences, a disclaimer requires an explicit declaration to the relevant court. It often requires a special form (before a notary or a judge) and is subject to time limits (Germany: six weeks in principle; France and Italy: 10 years). Sometimes (in France and the Netherlands) it is recorded in a special register. In some countries it is irrevocable (in the Netherlands) whereas in some it can be avoided (in Germany).
d) In English law, the estate is not directly transferred to the beneficiaries. It rather first passes to a personal representative of the decedent, who has to wind up the estate similar to a trustee and whose liability for the debts of the estate is in principle limited to the estate (trusts). The personal representative can accept or decline the appointment. If the representative has been named in the will (executor), possibly being a beneficiary at the same time, the fiduciary transfer of the estate takes place automatically and the court’s grant of probate only has declaratory effect. If the representative has been appointed by the court (administrator), the transfer of the estate is effected only by letter of administration. The administrator may also be a beneficiary, as beneficiaries of law have a right to be appointed as administrator in the order of intestate succession, beginning with the surviving spouse. The personal representative has to collect the estate, administer it, convert it into cash as far as necessary, and then settle the debts of the estate (including the estate tax). Finally (usually after one year, the so-called executor’s year), he has to distribute the estate according to the testator’s will or according to the rules of intestate succession to the beneficiaries, who as such are not liable for the debts of the estate. If the personal representative distributes the estate before having settled all debts (whether known or unknown), he is personally liable unless he has initiated a prior public notice to the creditors (advertisement) or received permission from the court (order). An over-indebted estate is as a general rule to be wound up by the personal representative according to the rules of insolvency law. The beneficiaries as such are not universal successors of the decedent. Rather, they only have a personal claim inter vivos against the personal representative, which may be waived. Thus, issues of acceptance of an inheritance and disclaimer by the beneficiaries do not arise under the English model of winding up estates.
e) Swedish succession law contains no provisions on the acceptance of an inheritance or on disclaimers. The assets and liabilities of the deceased first pass automatically to the estate (dödsboet), which is regarded as a legal entity and is the property of all stakeholders in the estate (dödsbodelägare). Stakeholders in the estate are the spouse/partner of the deceased as well as the statutory and testamentary heirs. They jointly have to administer the estate unless special administration by an administrator (boutredningsman) is ordered by the court at the request of either one of them or of a creditor in order to clarify the legal relationships regarding the succession. Only the estate is liable for the debts of the decedent unless the stakeholders in the estate are liable for damages due to intentional or negligent acts. Questions of acceptance of the inheritance and disclaimer are of no significance in this context. All stakeholders in the estate have to draw up an estate inventory (bouppteckning) for the winding up of the estate (except for very small estates) with the assistance of two reliable persons (gode män). It has to be submitted to the tax authorities for verification and registration and not only has to list all assets and liabilities, but has to describe fully the entire situation of the estate (including the matrimonial property regime, the statutory and testamentary heirs, the content of the will, the persons entitled to a compulsory portion, the property to be received before distribution, life insurance policies, etc). The estate inventory serves as a certificate of inheritance and is the basis for the winding up and distribution of the estate, which is not allowed before. As the heirs are, in principle, not personally liable for the debts of the estate, the disclaimer of the estate is rare in practice, but it can be declared informally.
4. First tendencies for legal harmonization
Although the legal approaches regarding the acceptance of an inheritance and disclaimer have very different starting points in the European countries, they all have a common regulatory goal: the orderly transfer of the assets of the decedent to his legal successor. To protect the creditors of the decedent and the freedom of action of the successors, all jurisdictions contain clear rules on whose assets are liable for the debts of the deceased (ie only the assets of the estate or also the personal assets of the successor), who has to administer the actual payment of the creditors’ claims and when the successors have (free) access to the estate.
Without seeking to negate the existing differences of the systems, it appears on closer examination that the practical differences are often smaller than the systematic differences suggest.
In the countries following the principle of universal succession with automatic accrual, the ‘normal’ (not over-indebted) estate is transferred directly to the heirs, who then have to settle the debts. In several countries following the principle of universal succession with accrual on acceptance (except for Austria), the heirs are in principle responsible for the interim administration of the estate until the (possibly implicit) acceptance of the estate, and they have to settle the debts. Similarly, in England and Sweden the estate is primarily administered by one of the beneficiaries or the stakeholders of the estate, who are also responsible for settling the debts.
All jurisdictions analysed in the previous paragraphs provide legal protection for the successor against over-indebted estates: either the liability of the successor is automatically limited to the estate (as in Britain and Sweden) except for cases involving their own misconduct, or it may be limited to the estate by the successor by means of a conditional acceptance, or an acceptance in conjunction with an application for the administration of the estate on behalf of the creditors.
Further, in all jurisdictions there is at least the possibility for a preventive intervention on the part of the courts regarding the winding up of the estate. In the paternalistic Austrian system the probate court is almost always involved, in all other jurisdictions the probate court may, on request, appoint an external administrator for an orderly settlement of the debts and the winding up of the estate.
Thus, it seems likely that there will be at least some convergence of the legal systems also regarding the accrual of the estate and, in particular, acceptance of the inheritance and disclaimer, with reforms of the national succession laws being the likely first steps. The scholars of comparative law are called upon to prepare the ground for these developments.
Literature
Michael A Schwind, ‘Liability for Obligations of the Inheritance’ in IECL V (1995) ch 8; Felix Odersky, Die Abwicklung deutsch-englischer Erbfälle (2001); Karlheinz Muscheler, Universalsukzession und Vonselbsterwerb: Die rechtstechnischen Grundlagen des deutschen Erbrechts (2002); Deutsches Notarinstitut (ed), Internationals Erbrecht in der EU: Perspektiven einer Harmonisierung (2004); Markus Stögner and Alice Perscha, ‘Verlassenschaftsverfahren in Österreich’ [2005] Notarius International 113; Alfonso Renteria (ed), Manuel de Droit Privé et de Justice Préventive en Europe (2007); Rembert Süß (ed), Erbrecht in Europa (2nd edn, 2008).
