Inheritance Laws in Austria
Inheritance Laws in Austria are governed by Austrian civil law, specifically under the Austrian General Civil Code (ABGB). Austria follows a civil law system, which emphasizes statutory law, and inheritance laws in the country include provisions for testamentary freedom as well as certain forced heirship protections to ensure that close family members are provided for, even if they are excluded from a will. The inheritance system in Austria is designed to protect the family and ensure fair distribution of the estate among close relatives.
Here’s an overview of key aspects of inheritance laws in Austria:
1. Testamentary Succession (Wills)
Creating a Will: In Austria, individuals have the right to make a will to determine how their estate will be distributed upon death. A valid will must meet the following legal requirements:
- Written Will: The will must be written, and the testator must sign it. It can be either handwritten (holographic will) or typed.
- Holographic Will: A holographic will (entirely handwritten by the testator) is valid if it is signed and dated by the testator.
- Notarial Will: A notarial will can be made with the assistance of a notary, ensuring that it is executed properly and complies with legal requirements. This is often seen as the most secure form of will in Austria.
- Witnessed Will: The testator can also create a will with the assistance of witnesses (i.e., a will drawn up by an attorney or a public official).
Revocation and Modification of Wills: A will can be revoked or modified by the testator at any time, as long as the new will or modification complies with the legal requirements. If a will is altered or revoked, the previous version becomes invalid.
2. Intestate Succession (Without a Will)
If an individual dies intestate (without a valid will), their estate is distributed according to the Austrian General Civil Code (ABGB), which sets out rules for intestate succession.
Order of Intestate Succession:
First Priority – Spouse and Children:
- Children: The children of the deceased are the first in line to inherit if there is no will. They inherit the estate equally, with each child receiving an equal share.
- Spouse: The spouse also inherits a portion of the estate. The share of the spouse depends on whether the deceased had children or other relatives:
- With children: The spouse shares the estate with the children, typically receiving one-third of the estate, with the remainder going to the children.
- Without children: The surviving spouse may inherit the entire estate if there are no children, but they will share the estate with other relatives (such as parents, siblings, etc.).
Second Priority – Parents: If there are no surviving children, the parents of the deceased inherit the estate. If the parents are no longer alive, the estate will be passed on to the deceased's siblings.
Third Priority – Other Relatives: If there are no surviving spouse, children, or parents, the estate will be inherited by more distant relatives, such as siblings, nieces and nephews, or grandparents, depending on the rules of succession in the ABGB.
The estate will not go to non-relatives unless there is a will specifying otherwise.
3. Forced Heirship (Legitime Portion)
Austria has a system of forced heirship, which guarantees certain close relatives a portion of the deceased’s estate, regardless of the terms of the will. These forced heirs cannot be completely disinherited unless there are very specific legal grounds.
- Children: The children of the deceased have a legitimate portion of the estate, which is typically half of what they would receive under the statutory rules of inheritance. This means that children have a protected portion that cannot be reduced by the testator.
- Spouse: The surviving spouse also has a right to a legitimate portion, which is usually one-third of the estate if there are children. If there are no children, the spouse receives a larger share.
- Parents: If there are no children, the parents of the deceased can also claim a legitimate portion of the estate.
The forced heirship laws ensure that children and spouses cannot be entirely disinherited, although a person can still leave certain assets to others, as long as they respect the forced heirship portion for family members.
4. Inheritance of Property
Real and Personal Property: Both real property (land and buildings) and personal property (bank accounts, vehicles, jewelry, etc.) are inherited according to the terms of the will or, if no will exists, according to intestate succession laws.
Joint Ownership: If the deceased owned property jointly with another person (such as a spouse or business partner), the surviving co-owner typically inherits the deceased's share of the property under the right of survivorship, particularly in cases of joint tenancy.
Marital Property Regime: The distribution of property between a surviving spouse and children may be influenced by the marital property regime under Austrian law. If the couple was married under the separation of property system, each spouse owns their individual property. Under the community property system, the surviving spouse has an entitlement to half of the property acquired during the marriage.
5. Inheritance Taxes
No Inheritance Tax: Austria abolished inheritance tax in 2008. As a result, there is no national inheritance tax on property inherited in Austria.
Capital Gains Tax (CGT): While there is no inheritance tax, inherited property may be subject to capital gains tax (CGT) if it is sold in the future. However, if the inherited property is not sold and remains in the family, there is no immediate CGT liability.
6. Estate Administration and Probate
Executor: If a valid will exists, the executor named in the will is responsible for administering the estate. The executor's duties include gathering the deceased’s assets, paying off debts, and distributing the estate according to the terms of the will or, if there is no will, according to the laws of intestate succession.
Probate: The probate process in Austria involves court approval of the will (if one exists). The probate court will confirm the validity of the will, appoint the executor, and oversee the administration of the estate. If there is no will, the court will appoint an administrator to distribute the estate according to the laws of intestate succession.
Probate Process: The probate process in Austria is relatively straightforward. The estate must be administered according to the law, and the beneficiaries must be notified and involved in the distribution process. The probate court ensures that the estate is settled according to legal rules.
7. Inheritance Disputes
- Challenging a Will: Family members or other parties may challenge the validity of a will in Austrian courts. Grounds for challenging a will may include:
- Lack of capacity (the testator was not mentally competent when making the will).
- Undue influence (the testator was coerced or pressured into making the will).
- Improper execution (the will was not signed or witnessed in accordance with Austrian law).
- Claims for Legitimate Portion: If an eligible family member believes they have not been adequately provided for in the will, they may make a claim to their legitimate portion. This claim is based on the forced heirship laws and ensures that certain relatives, such as children and spouses, receive their statutory share.
8. Special Considerations for Foreign Nationals
Foreign Nationals: Foreign nationals who own property in Austria are subject to Austrian inheritance laws for the property located within the country. If a foreign national dies in Austria or owns Austrian assets, the estate will be administered according to Austrian law.
International Wills: Austria recognizes international wills under the Convention Providing a Uniform Law on the Form of an International Will (1973). This allows foreign nationals who own property in Austria to create an international will that may be recognized both in Austria and their home country.
9. Estate Planning and Trusts
Trusts: Unlike some common law countries, trusts are not a prominent feature of Austrian inheritance law. However, individuals may use other tools, such as wills and gifts, to arrange their estate planning.
Donations: Donations made during the lifetime of the individual may affect the distribution of the estate, especially if the value of the donation is large. In some cases, the value of the donations may be considered when determining whether the deceased’s family members are adequately provided for.
Conclusion
Austrian inheritance laws are based on the Austrian General Civil Code (ABGB) and include principles of testamentary freedom along with forced heirship protections. While individuals have the freedom to decide how to distribute their estate through a valid will, close family members such as children and spouses are entitled to a legitimate portion of the estate, which cannot be reduced or excluded by the testator. There is no inheritance tax in Austria, but capital gains tax may apply when inherited property is sold. The probate process is straightforward, with courts overseeing the administration of estates. Foreign nationals with property in Austria are subject to Austrian inheritance laws.
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