An introduction to forced (protected) heirship – Part 1

What is forced heirship?

In many Common Law jurisdictions, testators enjoy full freedom to leave their assets to whomever they wish. However, in other countries, this is not the case.

Succession laws define given rights for the heirs. Despite the provisions made in a testament, a will can easily be overturned by these protected heirs. This is called “forced heirship”.

Forced heirship rules restrict the ability of testator to decide how their assets should be distributed after death. The exact rules will differ from country to country. Some jurisdictions may legislate that, upon death, all the property of an individual must be inherited by the protected heirs, other countries may permit a testator to give away a proportion of the estate, provided the balance still passes to protected heirs. The latter is the case in Portugal.

Why forced heirship?
In some jurisdictions, succession is viewed as a right of the heir, not a choice of the testator. For the most part, these expectations are part of the prevailing way of thinking and reflect deep-seated cultural roots and assumptions. Several factors come into play:

a) there is a requirement to protect immediate family members – spouse and children of that marriage – by assuring they receive a minimum percentage of the estate, called the “legítima”.
b) Second, and almost equally important, is the intention to preserve family wealth. “Blood is thicker than water.”
c) Legislation regarding succession often dates back to historical periods where the prevailing mentality was quite different from today.

Why is forced heirship not used everywhere?
Critics of forced heirship contend that testators should be permitted to bequeath their estate or a proportion thereof as they please. Prohibiting them from doing so on death could be seen as the same as doing so during their lifetime. Also, most countries in the world allow wills to be changed if satisfactory conditions are not made for dependants.

Where are forced heirship rules most common?
Forced heirship prevails in Civil Law jurisdictions and Islamic countries.

How are the rules applied?
It is up to each country to decide how to apply its rules for forced heirship. In countries such as Belgium, Cyprus, France, Germany, Italy, the Netherlands, Portugal, Spain and Sweden, there are several categories of protected heirs. With a few exceptions, the hierarchical nature of relationships means that only the closest relatives inherit. In Common Law jurisdictions, heirs are not entitled to a fixed proportion of the estate. Dependants may also ask for financial provisions from the deceased’s estate if needed.

Different rules
Forced heirship rules applied in countries such as Portugal provide certainty, and so often may avoid unnecessary probate and legal expenses in their application. This rigidity does not take into account personal circumstance. Either a percentage of the estate or a set amount is allocated despite any provisions in a Will. Other forced heirship rules may lack certainty, as their application depends on the facts of the particular case. This can result in legal challenges.

Next: Mitigating forced heirship rules

By Dennis Swing Greene
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Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a.