Contract of Inheritance among Novelties in the Law of Succession
21. 01. 2015
As of January 1, 2014, the New Civil Code introduced a number of changes in the area of inheritance law.
One of the novelties of the current legislation, which has just entered the second year of its validity, is the contract of inheritance, which is the strongest title by inheritance. It prevails over intestate and testamentary succession namely because it carries the principle of voluntary and free will. Thus, if a contractual heir (whose titles ensues from the inheritance contract) and a testamentary heir (whose title is derived from the last will) compete with each other, the title of the contractual heir will prevail. Inheritance contract must take exclusively the form of a public document (notarial deed).
The inheritance contract may (but doesn´t have to be) a contract for consideration. In that case, the contractual heir provides the decedent with consideration for becoming the heir. Compared to a last will, inheritance contract gives more legal certainty. It is a bilateral legal act, and therefore it cannot be unilaterally rescinded, revoked or modified, as is the case of the last will.
Although the inheritance contract establishes the right of the other party to become the heir, the decedent may during his or her lifetime dispose of their property according to their own discretion. This freedom of the decedent, however, has its limits. For example, if the decedent gave all his or her property to a third party so that the contracting heir couldn´t inherit it, contractual heir may demand the ineffectiveness of such legal actions of the decedent.
The law expressly provides that the contract of inheritance cannot be entered into with respect to the whole of the decedent´s estate, but only with respect to no more than three-quarters of it. The remaining quarter must be earmarked for other types of inheritance, i.e. either by testament or on the basis of statutory classes of heirs. As in the case of last wills, forced heirs, i.e. the children of the deceased and their offsprings, cannot be excluded from succession. Forced heirs always have a right to a share of the estate, provided that they were not disowned by the decedent or didn´t waive their right to the inheritance. Inheritance contracts may be concluded between spouses, or with a third party.
The inheritance contract has thus extended the range of dispositions the decedent can make for the case of death. Most importantly, it´s based on contractual freedom, i.e. a contract may provide for anything which is not prohibited by law.
The inheritance contract is not the only novelty the New Civil Code has introduced. For instance, the range of potential heirs was extended. Thus, decedent´s great-grandparents or cousins may inherit by intestacy. Furthermore, trust funds have been introduced to the law of succession, and preconditions for the acquisition of inheritance, both in wills and inheritance contracts, may be set.
If you seek advice on succession law and inheritance rights, please contact our law firm.
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