Waiver of inheritance (Erbausschlagung)
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Waiver of inheritance (Erbausschlagung)
Heirs are not liable for liabilities pertaining to the inherited estate if they waive their inheritance by the stipulated deadline.
The heir must waive his or her inheritance within six weeks after having been notified of the opening of the inheritance and the basis for his or her status as an heir. The heir must officialy disclaim the inheritance. This can either be done in the presence of and recorded by the Probate Court or be submitted after certification by a notary.
In the case of the latter, it is sufficient to submit a letter, although the signature of the heir must be certified by the notary. The act of either waiving or accepting the inheritance is binding.
Liability if inheritance is accepted:
If the heirs accept their inheritance, they essentially ‘step into the shoes’ of the testator from a legal perspective.
This means that they also inherit the person's debts and must use their own assets to cover them.
However, the heirs are able to limit their liability for the inherited debts to what is known as the ‘legal estate’ (‘Erbmasse’).
This means that any creditors to whom the deceased was indebted can recover their losses from the legal estate but the heirs' own assets remain protected from third parties.
The heirs can obtain this limitation of liability in one of two ways: they can either submit an application to the Probate Court to request administration of the estate on behalf of the creditors or they can request estate insolvency proceedings by submitting an application (Nachlassinsolvenzverfahren) to the insolvency court.
If the estate does not cover the costs of administration of the estate on behalf of the creditors or to cover the costs of estate insolvency proceedings, the heirs can still obtain a limitation of liability. If claims are asserted by a creditor, the heirs can plead insufficient assets in the estate. The heirs can then refuse to settle the liabilities of the estate in so far as the size of the estate is insufficient to cover them. However, the heirs are required to hand over what there is of the estate to the creditors.
If the heirs simply wish to avoid being confronted with debts they were not anticipating, all they need to do is initiate a public notice procedure (‘Aufgebotsverfahren’), whereby the heirs can submit an application to the probate court requiring all the creditors of the testator to notify the court — by a set deadline — of the outstanding debt owed to them by the testator.
If a creditor fails to file his or her claims on time, he or she must be satisfied with whatever is left of the inheritance.
The public notice procedure clarifies the situation for the heirs by revealing whether there are grounds to put the estate into official administration by applying for administration of the estate or insolvency of the estate.
