Estate Planning
If a person does not make any arrangements for his or her death, his or her property will be inherited according to the law. If the testator wishes the distribution of the estate to be different from that defined by law, it is important to put these wishes in writing clearly and unambiguously . There are different options for doing this.
Bequeathing items
- It is quite common for a person to think of his or her assets not in terms of percentages and fractions, but as individual items – a house, an apartment, a forest, a business, an art collection, etc., and to want to leave specific items to specific persons.
- On the one hand, to avoid disputes and quarrels between heirs, and on the other hand, to ensure that assets are used in the future by people who understand their value.
- Once you have created a beautiful home with a garden, it is worth thinking about who to bequeath the property to – perhaps preferably someone who will develop it rather than sell it for property development.
- However, bequeathing specific items is not as simple and straightforward as one might think.
Please note!
- If you want to leave specific items to specific people in your will, these are called “legacies”.
- It can be something small like jewellery or a painting or a chair, or a whole property.
- If a person is left only a legacy in a will, they are not an heir.
- The rights and obligations of a legatee are quite different from those of an heir.
Difference between an heir and a legatee
Heir
The entire estate of the testator, including all obligations and those items designated as legacies to other individuals, passes to the heir or heirs
The legatee
The legatee does not automatically become the owner of the designated item. The heir is obligated to arrange the transfer of the item to the legatee.
Please note!
- A legatee can also be an heir, but does not have to be.
- For example, the testator bequeaths all his property in equal shares to his three sons, but leaves one specific apartment to his youngest son as a legacy and the car to a friend as a legacy.
- In this case, the three sons, as heirs, equally share what remains after the legacies.
In the case of immovable property, it is sufficient to physically transfer the property; in the case of immovable property, a notarial deed is required so that the ownership can be transferred and new owner entered in the land register.
If the transfer of the legacy does not take place, the legatee has the legal right to go to court to obtain the legacy.
Advantages of a legacy
Instructions for the division of the estate are not binding
- A person can write in their will that my heirs are A, B and C and I want them to divide the estate between them so that A gets the house, B gets the cottage and C gets the bank accounts.
- However, the arrangements for the distribution of the estate are not binding, and the heirs can divide the estate as they wish and still fall out and “run over” some of the heirs.
- A legacy provides greater assurance that the item will indeed go to the person the testator intended to leave it.
The legatee has no obligations
- Inheritance inevitably brings a whole series of tasks and practical matters. The heir fulfills the testator’s obligations to third parties, submits claims, arranges the funeral and bears the funeral costs, and may have to file for the declaration of bankruptcy of the estate.
- The legatee has no such obligations.
Obligations are fulfilled from the legacy only as a last resort
- If the deceased has debts or other obligations, the heirs must pay them.
- Claims against the estate are primarily satisfied from the property going to the heirs, and only if that is insufficient, from the legacy.
Please note!
- If the legacy is real estate or a vehicle that still has an outstanding loan, it is wise to specify in the will what should become of it – whether the loan should pass to the legatee or be paid out of the estate.
Disadvantages of a legacy
Heirs may not want to transfer the legacy
- If the heir does not transfer the legacy, you must go to court. A notary cannot help.
- Although the court usually decides that the transfer must be made, the legal proceedings are still long and damaging to relationships.
- The heir can refuse to transfer the legacy only if the inherited debts must be paid from the item designated for the legacy.
Hard to understand for an ordinary person
- A legacy is a legal term that most people do not know.
- If someone writes in his or her domestic will that he or she leaves his or her house to person A, this can be legally interpreted as a legacy. This means that the house will go to the person named in the will, but the rest of the estate – such as jewellery, furniture or a lawnmower – will be distributed by intestate succession because they are not mentioned in the will.
- An estate is a collection of assets and when making a will you should think of your assets as a collection. If A should also receive other assets (you do not want to leave other assets to someone else), the will should also be worded as such. If the wish is for A to get the house but the other assets to go to other people, then the will should be written that way.
Some examples
Some examples of how to make a will so that specific items go to the people you want. In somewhat more complex situations, it is always wise to consult a notary. When notarizing a will, discussing its contents with the notary is part of the notarization process, and there is no separate fee for this.
- The will states: “I bequeath an apartment to my son and a country house to my grandson”. At the time the will was made, the testator owned other property. The testator has two children – a daughter and a son.
- Since the will does not designate all the property or a notional share to the son and grandson, but only an apartment and a country house, in general, a will with such content is considered for the designation of legacies.
- In this case, the legal heirs are the son and daughter. The son plays two roles at the same time – heir on the one hand and legatee on the other.
- The heirs must transfer the country house to the grandson as a legacy.
- The heirs must transfer the apartment to the son as legacy.
- The daughter and son share the rest of the estate equally.
Better wording
- If the testator’s intention was to divide all his property between his son and grandson, he or she should have written: “My heirs are my son and grandson. The son gets the apartment, the grandson gets the country house.”
- In this case, the son would receive the apartment as a legacy, the grandson would receive the country house as a legacy, and the remaining assets would be divided equally between them.
- The deceased had a wife and an adult son and daughter. The wife is not the mother of the children.
- The daughter lived in an apartment that was part of the couple’s joint property. The will states, among other things, that “the apartment will go to the daughter”.
- As the apartment is joint property, only half of it is included in the estate, the other half being the property of the surviving spouse. Thus, the daughter will inherit only 50% of the apartment. There is no possibility for the testator to leave the apartment in its entirety to his daughter.