Changes in inheritance law
New rules on heirs’ liability for decedents’ debts are the most significant changes in the set of amendments to the Civil Code and the Civil Procedure Code, among other acts, effective 18 October 2015.
The Act of 20 March 2015 Amending the Civil Code and Certain Other Acts limits the scope of heirs’ liability for the decedent’s debts and introduces the new institution of an “inventory list” (wykaz inwentarza).
We discussed the planned changes in inheritance law on our portal at the stage of legislative work on the government proposal. Now we will highlight the importance of the changes that have been enacted.
Accepting inheritance with benefit of inventory
From 18 October 2015 forward, the scope of heirs’ liability is limited. Previously, heirs who did not declare their intention of accepting the estate with the benefit of an inventory before the court or a notary within a designated six-month period were personally liable for inherited debts without limitation. But an heir who did make that declaration within the designated time was liable for the decedent’s debts only up to the “positive” amount of the estate (i.e. before subtracting the debts). Therefore, only in the latter case could the heir prevent the amount of the inherited liabilities from exceeding the value of the inherited assets.
Whether out of ignorance of the legal consequences of failing to act, or the relatively high costs of preparing an inventory, heirs were sometimes saddled with high debts inherited from the decedent.
Under the amended regulations, instead of an inventory prepared by a notary, heirs will be able to use an “inventory list” prepared by the heirs themselves using a special form. The heirs will be required to disclose in the inventory list all assets of the decedent’s estate known to them, as well as items subject to specific bequest, and the debts of the estate. The inventory list will thus serve as a list of debts of the estate for which the heir is liable. An heir who did not know of the existence of other debts not included in the inventory list and with due diligence could not have learned of the other debts will be liable only up to the amount of the difference between the positive value of the inheritance (i.e. the absolute value of the assets before subtracting the debts) and the amount of the satisfied claims. However, if the heir knew of other debts, or with due diligence could have learned of them, the heir will be liable up to the amount that he or she would have been required to satisfy if all of the debts of the estate had been duly paid. The inventory list may be filed with the court or with a notary, who will later forward it to the court.
Meanwhile, the possibility of have a traditional inventory prepared by a bailiff has been retained. Such inventory will be decisive for valuing the decedent’s estate. Thus, for example, a creditor whose claim was overlooked in the inventory list can demand that an inventory be prepared by the bailiff reflecting the existence of the debt as part of the estate.
These changes are primarily designed to protect heirs against unexpected liability for inherited debts exceeding the absolute value of the assets in the estate. They are also intended to limit the costs heirs previously had to incur to have a traditional inventory drawn up. On the other hand, the amended regulations shift to the creditor the full burden of proving the heir’s liability for a specific debt of the estate, because anytime an obligation is not disclosed in the list of claims included in the inventory list, the creditor will have to file and pay for an application to prepare a full inventory.
The amendment applies only to estates opened on or after 18 October 2015. Thus inheritance proceedings begun before that date and still pending (e.g. with respect to claims by the decedent’s creditors) will be governed by the previous regulations.
Joanna Duda, Litigation Practice, Wardyński & Partners
Tomasz Krzywański, Private Client Practice, Wardyński & Partners