News

Succession: Who pays the debts of the deceased?

When a person dies, who becomes responsible for that person’s debts? In other words, who then must pay the debts of the late lamented? It’s a question that all of us will have to face one day. Read this article and acquaint yourself with the 3 potential alternatives that the heir might consider in succession proceedings.

 

The hereditary option

First of all, it should be remembered that succession is considered as a voluntary form of acquisition of property. The term ‘voluntary’ is here taken to mean that the person or persons designated by law or chosen by the deceased personally will never be compelled to accept, in his, her or their own estate, that which the law or the deceased may have apportioned to him/her/them in the succession procedure. As of the opening of the estate the entitled parties obtain the right to choose between 3 options. This is known as the hereditary option.

 

 

  1. Outright acceptance

In case of outright acceptance, the heir must defray all the costs of the succession proceedings and, consequently, also the debts of the deceased. (Even if those debts should happen to exceed the estate of the deceased.)

The estate of the deceased testator is, therefore, integrated with the estate of the heir through the mechanism of merger of estates. The property, goods, assets and debts of the deceased therefore become the property, goods, assets and debts of the heir.

 

Outright acceptance may be either express or tacit.

If acceptance is “express” the heir must have a document drawn up recording his or her express wish to accept the estate. If, however, acceptance is described as “tacit“, this means that the heir has accepted the estate tacitly, in the light of his or her behaviour. For instance, if the heir has sold a piece of property out of the estate without having first expressly accepted the same, then succession will likewise be considered as having been accepted outright.

Incidentally, once an estate is accepted, expressly or tacitly, the heir may no longer renounce that estate nor seek an alternative at any later date.

It should also by noted, by way of exception, that payment of the funeral expenses does not imply acceptance of the estate.

 

 

  1. Acceptance without liability beyond assets descended

If the heir has misgivings about the estate of the deceased and is still unsure whether it might be wiser to accept or decline categorically, the law provides that the heir may accept the estate without incurring liability beyond the assets descended. This means that a notary will draw up an inventory of the estate of the deceased and that this will not be incorporated and merged in the heir’s own estate.

In other words, this is to say that the debts of the deceased person never have to be paid out of the heir’s own capital, but out of the capital of the deceased. So, the heir will then inherit only if the assets are greater than the liabilities.

 

 

  1. Outright renunciation

If an heir flatly refuses to pay off the debts of the deceased, outright renunciation of the estate is a possibility that might be considered. In that case he or she is required to sign what is known as an act of waiver before the notary of his or her choice; this is not optional. It should also be borne in mind that he or she will then automatically lose the capacity of heir and will no longer be able to accept the estate that should initially have been apportioned to him or her. His or her share will then be divided up amongst the other heirs.

Renunciation of estate is final, once and for all. It follows that, if an heir refuses an estate, he may not later reconsider his decision and accept, even if he should later discover that the deceased was in possession of hitherto unknown or undisclosed assets.

 

 

Conclusion

 

Who pays the debts of the deceased in succession proceedings?

If an heir is presented with the debts of the deceased, the so-called “hereditary option” allows the choice between 3 options:

  1. Outright acceptance of the estate;
  2. Acceptance without liability beyond assets descended;
  3. Outright renunciation pure of the estate.

 

Debt management clearly does not end with the death of a creditor or debtor. There are many rules in place to handle these delicate situations. You can always contact us by e-mail at sales@tcm.be or by telephone on +32 16 74 52 04.

Succession: Who pays the debts of the deceased?

When a person dies, who becomes responsible for that person’s debts? In other words, who then must pay the debts of the late lamented? It’s a question that all of us will have to face one day. Read this article and acquaint yourself with the 3 potential alternatives that the heir might consider in succession proceedings.

 

The hereditary option

First of all, it should be remembered that succession is considered as a voluntary form of acquisition of property. The term ‘voluntary’ is here taken to mean that the person or persons designated by law or chosen by the deceased personally will never be compelled to accept, in his, her or their own estate, that which the law or the deceased may have apportioned to him/her/them in the succession procedure. As of the opening of the estate the entitled parties obtain the right to choose between 3 options. This is known as the hereditary option.

 

 

  1. Outright acceptance

In case of outright acceptance, the heir must defray all the costs of the succession proceedings and, consequently, also the debts of the deceased. (Even if those debts should happen to exceed the estate of the deceased.)

The estate of the deceased testator is, therefore, integrated with the estate of the heir through the mechanism of merger of estates. The property, goods, assets and debts of the deceased therefore become the property, goods, assets and debts of the heir.

 

Outright acceptance may be either express or tacit.

If acceptance is “express” the heir must have a document drawn up recording his or her express wish to accept the estate. If, however, acceptance is described as “tacit“, this means that the heir has accepted the estate tacitly, in the light of his or her behaviour. For instance, if the heir has sold a piece of property out of the estate without having first expressly accepted the same, then succession will likewise be considered as having been accepted outright.

Incidentally, once an estate is accepted, expressly or tacitly, the heir may no longer renounce that estate nor seek an alternative at any later date.

It should also by noted, by way of exception, that payment of the funeral expenses does not imply acceptance of the estate.

 

 

  1. Acceptance without liability beyond assets descended

If the heir has misgivings about the estate of the deceased and is still unsure whether it might be wiser to accept or decline categorically, the law provides that the heir may accept the estate without incurring liability beyond the assets descended. This means that a notary will draw up an inventory of the estate of the deceased and that this will not be incorporated and merged in the heir’s own estate.

In other words, this is to say that the debts of the deceased person never have to be paid out of the heir’s own capital, but out of the capital of the deceased. So, the heir will then inherit only if the assets are greater than the liabilities.

 

 

  1. Outright renunciation

If an heir flatly refuses to pay off the debts of the deceased, outright renunciation of the estate is a possibility that might be considered. In that case he or she is required to sign what is known as an act of waiver before the notary of his or her choice; this is not optional. It should also be borne in mind that he or she will then automatically lose the capacity of heir and will no longer be able to accept the estate that should initially have been apportioned to him or her. His or her share will then be divided up amongst the other heirs.

Renunciation of estate is final, once and for all. It follows that, if an heir refuses an estate, he may not later reconsider his decision and accept, even if he should later discover that the deceased was in possession of hitherto unknown or undisclosed assets.

 

 

Conclusion

 

Who pays the debts of the deceased in succession proceedings?

If an heir is presented with the debts of the deceased, the so-called “hereditary option” allows the choice between 3 options:

  1. Outright acceptance of the estate;
  2. Acceptance without liability beyond assets descended;
  3. Outright renunciation pure of the estate.

 

Debt management clearly does not end with the death of a creditor or debtor. There are many rules in place to handle these delicate situations. You can always contact us by e-mail at sales@tcm.be or by telephone on +32 16 74 52 04.

News