If you do not draft a will or other will, the legislator will arrange the division of your inheritance. What exactly does that mean for individuals?
You haven’t arranged anything and you still have parents, (half) brothers or (half) sisters
As a single person with no children and no brothers or sisters, your property belongs to your parents, if they are still alive. ‘They each inherit half the estate,’ says Hilda van den Kepas, partner at Monard Law. Parents inherit the same (more favorable) rates as children.
If you also have siblings, your estate will be divided between your parents and siblings. The inheritance tax for the latter is immediately much higher. If both parents are still alive, then your father and your father together will receive half of the estate. Then the other half goes to your brothers, who each get an equal share. If one of the parents is still alive, they receive a fourth, while the siblings receive three quarters: one half, plus a fourth part from the deceased parent.
If both of your parents are deceased, your entire inheritance will go to your siblings. If one of them dies, the sons of the deceased brother or sister take his place. In legal jargon, this is referred to as place-taking.
NB! Siblings are not conservative heirs. So you can deviate from the legal regulation, and in principle give or leave everything to someone else.
In the case of a half-brother or half-sister, the handling of inheritance becomes somewhat more complicated. In this case, the micro-incision technique is used. Then the estate (or that part that does not belong to the surviving parents) is divided into two equal parts between the paternal and maternal line. Then full siblings inherit in both lineages, while half-siblings inherit only in the common parent line with the testator.
You have a full sister – Natalie – and a half-brother – Karel – on your mother’s side. Then the inheritance is divided between the paternal and maternal line. In this case, as a full-sister, Natalie inherits half of the estate through the paternal line. Natalie and Karel each inherit a quarter of the estate through the maternal line. Concretely, three-quarters of the estate is owned by Natalie, while Karel has to settle the quarter.
You have not arranged anything and you have no brothers or sisters and your parents have passed away
If you have no children, you have no brothers or sisters and your parents have passed away, your inheritance goes to your uncles, aunts, cousins etc. This is called the fourth order. Here is the division or division of the inheritance: half goes to the grandchildren on the father’s side, and the other half goes to the assets on the mother’s side.
If there is no inheritance, then the legislator speaks of an inheritance without an inheritance, and everything goes to the Belgian state.
As a single person without children, you can leave your entire property to a third party. A friend, one brother, a good cause… No one in the family can claim your inheritance if you don’t want it.
“If you haven’t arranged anything, the government will in principle look for your rightful heirs,” says Stephen Van Gert, partner at Bannister Advocaten. “In principle, this could go very far.” The lawyer refers to the TV program “The Heir Wanted”, in which the presenter Axel Desseler went in search of real estate heirs with an expert last year. “We got a lot of questions because of this programme,” Van Gert smiles. The government itself is not interested in investing time and resources in searching for potential heirs. In those cases, the inheritance is placed in a closed account for thirty years. If no one steps forward as the rightful heir during that period, the money will flow into the state.
You want to decide for yourself to whom your inheritance goes
All of this is all the more reason to make arrangements as one after your death. You can donate or write a will. Moreover, in this case there is no question of legal reserve or part available.
According to the legislator, the total assets of a person – the accounting estate (in the past it was referred to as the fictitious mass) – consists simply of two parts: half of your assets are allocated to the so-called reserved heirs. These are your potential partner in marriage and your children. They are always entitled to this reserve. The other half of your assets is called the disposable portion. As the name suggests, this part is available to you for free.
As single without children, this arrangement does not apply, and your property is completely free. “As a single person without kids, you really have a complete free game here,” explains Van Gert. In this case, there is no question of a legal reserve to which the parents or sons are entitled. In other words, you can leave your entire assets to a third party. A friend, one brother, a good cause… No one in the family can claim your inheritance if you don’t want it.
“There is only one exception,” van den Kepas says: “If the parents are in need, they are entitled to the alimony money that is taken from the estate.” And the heir – whoever he is – cannot avoid that. Parents have the right to a living, in the form of capital or a monthly pension.
1. Inflicting charity…?
If you want to leave your assets to a charity, a zero rate will apply since July 1, 2021. In the past, charities had to pay an 8.5% inheritance tax, but the Flemish government has revised this arrangement. This way you want to encourage charitable giving. The 8.5% rate applies to donations to professional societies and health insurance funds. This is always the case regardless of the amount of the donation.
2. Or a good friend?
This raises a tricky topic: It’s not always interesting for tax purposes to inherit as a third person. The rates are no lower, and for many years, so-called duet inheritance was a popular method among childless people to leave a tax advantage to a distant relative or friend. By including for a good cause, the high inheritance tax can be mitigated. The charity took out the entire inheritance tax in return for the donation. Other heirs received a little less, but received more.
This system was abolished and replaced with the so-called friend’s legacy. If you want to inherit a good friend, the legacy of friends is a godsend. “A 3% inheritance tax is levied on the inheritance portion, up to a maximum of 15,000 euros,” says Van Gert.
You inherit 15,000 euros as a “friend”. You pay 450 euros inheritance tax on this. Without the inheritance of friends, the inheritance tax would be 25%, or 3,750 euros. Save 3300 euros. Know that this is also the limit. If your friend leaves more than that, the reduction will never exceed 3,300 euros. Once the first 15,000 tranche is exceeded, the 25% inheritance tax is applied to the remaining amount.
If you designate several people as friends, and they inherit more than 15,000 euros together, the reduction will still apply to the first tranche. So the reduction of 3,300 euros applies to them together, in proportion to the amount they received personally. The inheritance of friends is in itself a good measure, but due to the limited amount that is taxed at a lower rate, you should definitely not overestimate it.
Plan to succeed you
In the Legacy Guide, you can read everything you need to know in order to move your possessions smoothly.
- How do you arrange your inheritance as legal cohabitants?
- What happens to my property if I am single without children?
- Is a power of attorney necessary as a widow or widower?
Plan your succession with 11 practical cases.
Saturday 3 September Free at The Times.