In our country, the law of succession has undergone a thorough overhaul, which required quite a bit of work. The new law will come into effect on 1September 2018. The aim was to adapt the law of succession to the needs of modern society by taking into account unmarried couples and blended families, while giving more freedom to the testator. There was also the intention to simplify the law of succession.
A few basic principles
The law of succession is to a large extent based ona division of the family in 'orders' and 'degrees'. The inheritance is passed down according to orders. The first order is made up of the descendants. The second group is made up of the parents, brothers and sisters. The third group includes the ancestors: the (grand)parents, without the brothers and sisters. The fourth group includes all of the other members of the family.
In addition to the orders, there are also degrees: within the same order, the people who are most closely related to the deceased person will receive the inheritance. There is one degree per generation. The new law of succession changes nothing in this subdivision of the family. For more information: The 'orders' and the 'degrees'.
The new law of succession is aimed at giving more freedom to the testator. However, certain heirs remain protected by the law. In the new law of succession, the spouse and the children remain the rightful heirs. However, this is no longer the case for (grand)parents. For more information: The freedom of the testator versus the protected heirs.
The reserved share of an inheritance (the legal reserve) is the minimum share of the inheritance which cannot be withheld froma legally protected heir. In order to calculate the total amount of the inheritance, we start with the notional estate. This is the sum of all of the testator's property at the moment of his or her death, minus his or her debts, plus all of the donations made by the deceased during his or her life. The value of these donations is determined on the day of the donation, indexed until the day of death. For more information: How is the reserved share calculated?
A deceased spouse's estate
The legal spouse will always receive a share of his or her spouse's estate. The sharing out takes place according to the matrimonial regime: the legal regime with equal division of property acquired during marriage, the separation of property regime or the community of property regime. To this is added the separation of property regimewith joint ownership of acquired property. For more information: What is a deceased spouse's estate composed of?
When the testator has children, the surviving spouse is entitled to usufruct of the total estate, whereas the children have bare ownership. If the testator does not have children, the surviving spouse has full ownership ofthe deceased's share of the joint property of the couple, as well as usufruct of the deceased's property. If the testator does not have children or a family, the surviving spouse will have full ownership of the total estate. For further details: How is an estate shared out between the surviving spouse and the family?
If the couple are not married, they may be legal or de facto cohabitants. For an inheritance, this makes a big difference. A legal cohabitant automatically inherits usufruct of the shared home and the furnishings. However, according to the law, de facto cohabitants inherit nothing automatically from their partner. The testator may however easily resolve this problem by making a will in favour of the de facto cohabitant partner. See: How is an estate shared out between the cohabitant and the family?
Children and parents
Just as the law provides for a legal reserve for the surviving spouse, there is also a legal reserve for the children. In the new law of succession, the legal reserve for children amounts to half of the inheritance, which is therefore shared out equally between the children. You may find more information here: What is the legal reserve for children? In the past, there was also a legal reserve for parents. In the new law of succession, this was however removed and replaced by a maintenance obligation for the testator's parents who are in need of assistance. For further details: What is the legal reserve for parents?
The obligation to report is the obligation for the testator to report a donation in his or her estate, if he or she has made one. In the new law of succession, as of September 2018, this obligation to report is limited to children who inherit. The value of the donation is now determined on the day of the donation (indexed until the day of death). You may find further information here: The obligation to report a donation and its calculation. The distinction which used to exist between a donation of movable assets and a donation of immovable assets has also been removed. You may find further information on this page: Declaration of support.
In principal, inheritance agreements are forbidden. However, the new law of succession is aimed at giving more freedom to the testator. For this reason, certain inheritance agreements are now explicitly permitted. You will find the ones which are now authorised here: The possibilities for an inheritance agreement after 2018. In order to provide greater peace of mind and better legal security to all parties in the framework of an inheritance, the new law explicitly provides for the cases in which such an agreement is authorised. In this case, it is referred to as a family agreement, which must be countersigned by all parties: The authorised inheritance agreement or family agreement after 2018.
With inheritance taxes now being a regional competence, this matter has undergone a thorough overhaul. The former principles still exist, but the rates now vary from one region to another. The first principle is that it is the region of the tax domicile of the deceased which determines the inheritance taxes. Next, it is the degree of kinship between the deceased and his or her legatee which determines the rate of the inheritance taxes: the closer the degree of kinship, the lower the rate. Finally, the size of the inheritance also determines the rate: the greater the amount, the higher the rate. For more information: Inheritance taxes: the principles. In Flanders, an adaptation of inheritance taxes will take place on 1 September 2018. The brackets for direct lineage and indirect lineage have been adapted. See: Registration fees in Flanders: what you need to know
Inheritance planning is not necessarily difficult or complicated and saves your loved ones a lot of trouble. In order to avoid inheritance taxes, it is possible to make an inter vivos donation, for example as a gift by hand or a bank deposit, or a gift with usufruct. Donation insurance and estate insurance are other possibilities, as well as being good investments for the inheritance. In short, inheritance planning is an integral part of financial planning. Do not forget to verify whether your marriage contract mentions everything which is necessary for the estate. You may find out more by reading Simple inheritance planning is a helpful solution and Five ways to avoid inheritance taxes.
The principles of estate insurance and donation insurance
Estate insurance may be a good way to avoid high inheritance taxes. This type of insurance pays a capital which allows the heirs to pay the inheritance taxes in the event of death of the testator. Thus, in many cases, it would be possible not to have to sell inherited property in order to pay the inheritance taxes. See: Estate insurance in order to avoid financial problems.
Donation insurance is a perfectly legal way to get around the three-year rule. It is a death insurance policy taken out by the beneficiary on the life of the donor. If the insured person dies within the specified period, the beneficiary receives a capital corresponding to the amount of the inheritance taxes. See: Avoid inheritance taxes thanks to donation insurance.