A person's estate passes when they die, or when it is impossible to know, due to a prolonged absence, whether they are alive or dead. By the commencement of the probate proceeding, all of the deceased's possessions are passed to their heirs. However, the heirs are not necessarily obliged to accept the inheritance.
The heirs have a number of different options regarding an inheritance to which they are entitled. Indeed, they may:
- accept the inheritance with an inventory;
- simply accept the inheritance;
- renounce the inheritance;
- contest an inheritance.
Who is concerned
Renunciation of an inheritance: any of the deceased's heirs.
Contesting an inheritance: any legal heir, whether they can be disinherited or not.
How to proceed
Accepting an inheritance with an inventory
This option is for hesitant heirs, who are unsure whether they should accept or renounce the inheritance. Indeed, it is possible that the debt attached to an inheritance may outweigh the assets, in which case it is obviously in the heir's interest not to accept the inheritance, or else run the risk of having to personally settle the deceased’s outstanding debts.
It may also be that the heir does not yet have all the necessary elements to allow them to make an informed decision (e.g., the deceased's accounts to evaluate the assets and debts attached to the inheritance).
The advantage for heirs accepting an inheritance with an inventory is that they are only obliged to pay the outstanding debts up to the value of the inherited assets.
Heirs wishing to accept their inheritance with an inventory must file a declaration with the clerk of the court in the district court (of Luxembourg City or Diekirch) in whose jurisdiction the inheritance proceedings were initiated. Such a declaration is not necessary when the heirs are minors or adults without legal capacity. However, such heirs must file a declaration with the clerk of the court once their incapacity has been remedied, or when they reach the age of majority, so as not to lose the benefit of acceptance with an inventory.
The time limit within which this right can be exercised is 3 months plus 40 days from the day of the deceased's death (3 months for the inventory to be drawn up and 40 days for the heir to reflect on its content).
Acceptance of an inheritance
Acceptance may be given expressly. In that case, it must be written (a simple letter or authenticated deed) and addressed to an heir, a creditor or an authority, i.e., the Indirect Tax Authority (Administration de l’enregistrement et des domaines) or the Luxembourg Inland Revenue (Administration des contributions directes).
The acceptance may also be tacit when the heir begins proceedings for the disposal (selling or exchanging an asset), conservation (preserving the state or value of the assets) or administration or use (managing a company or renting a building) of the assets in the inheritance.
Renouncing an inheritance
An inheritance is considered to be renounced when an heir, without any other benefit to counter, gives up all their successional rights to all of their co-inheritors.
In order to be valid, the renunciation must be filed with the clerk of the court in the district court in whose jurisdiction the inheritance proceedings were begun (as above in the case of acceptance with an inventory).
If they renounce the inheritance, the heir no longer has any rights to the inheritance, nor obligations to the deceased's creditors. Their part is distributed between the other inheritors.
Contesting an inheritance
Some people are protected by law and are entitled to a portion of the estate, of which they cannot be deprived. That portion is called the 'hereditary reserve' (réserve héréditaire) and depends on the number of children the deceased is leaving behind. For example, if the deceased has 2 children, the hereditary reserve is 2/3 for both children. The remaining 1/3 of the assets constitutes the disposable part, and may be distributed by the deceased in their will as they see fit.
When a legally protected heir has been stripped of their reserve, either in full or in part, owing to provisions in the deceased's will or donations made prior to their death, the heir may contest the inheritance legally, through the civil courts. In that case, they must be represented by a lawyer.
In this regard, there are 2 actions which must be carried out:
- establish a report of donations to determine the exact state of the deceased's estate as it was before the deceased distributed any of their assets to their heirs or to third parties;
- apply for a reduction in the donations in proportion to the amount by which they exceed the disposable portion.
The judicial action must encompass all recipients of the donations made by the deceased. The duration of such proceedings lasts between a year and a year and a half. If the legally protected heirs win the court case, the donations will be reduced accordingly.
If, after the death, the legally protected heirs do not claim their reserves, then the donations remain valid.
Who to contact
Luxembourg and Diekirch Bar
Registration Duties, Estates and VAT Authority1-3, Avenue Guillaume
B.P. 31 L-2010
Phone : (+352) 247 80800Fax : (+352) 247 90400