How is an inheritance divided?

First settle the estate before it can be distributed; when is that necessary?

A liquidation is a procedure that is prescribed by law in certain cases. This procedure takes place in the interest of the creditors of an estate. The debts of the estate must be paid and (any)
claims must be collected.

In two cases, an estate must be legally liquidated. First, if an inheritance has been accepted under benefit of inventory by one or more heirs. The other situation in which the estate is legally liquidated is if the court has appointed a liquidator. For example, at the request of an heir, an interested party, or the Public Prosecution Service.

If the estate contains more assets than liabilities (or if the estate is "positive"), the liquidation procedure is not required in certain cases. This is the case, for example, if there is an executor who can declare that the estate is "amply positive." Even if there is a so-called statutory distribution and the children accept the estate "beneficially," the estate does not need to be liquidated according to the law. The liquidation procedure is, however, necessary if the surviving spouse accepts the estate beneficiarily.

What are the liquidator's duties? Is it a light or heavy liquidation?

When determining the obligations of a liquidator, there is a difference between the situation in which liquidation takes place due to beneficiary acceptance and the situation in which a liquidator has been appointed by the court.

Light settlement

If the estate is accepted under benefit of inventory, all heirs are joint liquidators of the estate. As liquidators, the heirs do not have the same obligations as a court-appointed liquidator. For example, as liquidators, the heirs do not have to publicly summon creditors. They can, for example, address creditors by letter. Furthermore, there is no need to publish a list of so-called "acknowledged and disputed claims and entitlements," and no account and statement of account or distribution list need to be filed. This type of liquidation is called a "light" liquidation. The only thing the liquidators have to do is draw up an inventory of the estate and sell the estate's assets to the extent necessary to pay the creditors.

Heavy settlement

In addition to the light liquidation, there is also a "heavy" liquidation. This is a procedure that must be followed by a court-appointed liquidator (not the heirs as liquidators, as in the light version). This procedure can also apply to heirs who have accepted the inheritance with benefit of inventory, if the subdistrict court judge so determines. The heavy liquidation resembles bankruptcy proceedings. The liquidator must, among other things, summon creditors to submit their claims by a date set by the subdistrict court judge. An inventory of the estate must also be prepared, and the liquidator must sell the estate's assets to pay the creditors. Subsequently, a list of assets and liabilities must be prepared, along with a list specifying which creditors will be paid for what portion of their claims. Once this distribution list is final, the liquidator will pay the debts listed therein.

When can the estate be divided between the heirs?

If all the estate's debts have been paid and the estate is still in the black, the remaining assets can be divided among the heirs. All heirs must reach an agreement on the division. If this fails, the liquidator must ensure that the estate is divided. If the heirs cannot reach an agreement and there is no liquidator, the court can determine how the estate is divided. An heir can receive more or less than the value of their inheritance. This is called an "overallocation" (more) or "underallocation" (less). In such cases, claims arise between the overallocated and underallocated heirs. One owes the other a sum of money because they receive assets from the estate that are worth more than they are entitled to. Certain formalities may be required for the division of assets. For example, a notarial deed is required for the division of a house.

Inheritances can also be partially divided. This can be wise if, for example, the sale of a house is delayed. The remaining belongings can then be divided in advance. A civil-law notary can play a role in the settlement and distribution of an inheritance. For example, he or she can be appointed as the estate notary for the settlement of the inheritance. Engaging a (civil-law notary) mediator for inheritance matters is also possible. If there are disputes between the heirs, the civil-law notary can hold discussions to resolve them together. In addition, the civil-law notary can
Preparing inheritance tax returns. In short: the notary is the ultimate advisor on inheritance matters.

Summary and tip

Under certain circumstances, it is mandatory to first settle an estate before it can be distributed. This essentially prepares the estate for distribution. Settling an estate is done in the interest of the estate's creditors. The estate's debts must be paid and any claims must be collected. There are "light" and "heavy" settlement procedures. If the estate is positive, in many cases, settlement is not necessary. If all debts have been paid and the estate is positive, the inheritance can be distributed.

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This article is taken from 'Met Recht Geregeld' (www.metrechtgeregeld.nl), a product of FBN Juristen.

FBN Juristen and MAES civil-law notaries take the utmost care with the content of the articles, but accept no liability for incompleteness or inaccuracy of an article, nor for the consequences thereof.