This entry is a continuation of the topic discussed in the article: “Principles of Inheritance and Declaration of Acquisition of Inheritance”. Here, I will address the second stage of the inheritance procedure, which involves transferring individual estate assets into the direct possession of heirs.
I encourage you to read my other posts on inheritance law: “Disinheritance and Exclusion from Inheritance” and “Renunciation of Inheritance and Other Cases When a Potential Heir Does Not Inherit”, where you’ll find a wealth of useful information.
From this article, you will learn:
- How inheritance can be accepted
- What accepting inheritance outright means
- What accepting inheritance with the benefit of inventory means
- Why the declaration of acquisition of inheritance does not end the inheritance procedure
- What the division of the estate is
- What the legal effects of estate division are
- How estate division can be conducted
- How to conduct estate division through an agreement
- How to conduct estate division through court proceedings
- What should be included in an application for estate division
- What information co-heirs should provide to the court during estate division
- The principles of court-ordered estate division
- Estate division and inclusion in the inheritance schedule
- The jurisdiction of the court in division proceedings
- What estate division may involve
- Fees associated with estate division
- At the end of the article you can find Frequently Asked Questions
Since the division of the estate can only be carried out concerning heirs who have accepted their inheritance, let me first explain…
How Can Inheritance Be Accepted?
The rules for accepting inheritance are set out in the provisions of the Civil Code. According to these, inheritance can be accepted in two ways:
- Outright, or
- With the benefit of inventory.
Generally, this occurs based on a statement made by the heir. I discuss the principles governing such statements in the article: “Renunciation of Inheritance and Other Cases When a Potential Heir Does Not Inherit”.
What Does Accepting Inheritance Outright Mean?
Accepting inheritance outright means that the heir inherits without any limitations regarding the debts of the estate. They are therefore responsible for all these debts with their entire property—both the inherited assets and the resources they possessed at the time of the opening of the estate.
The only exceptions are responsibilities for:
- Ordinary legacies and instructions, and
- Reserved portions.
For the former, liability is limited to the value of the net estate. For the latter, the heir’s liability is limited to the surplus exceeding their reserved portion.
I wrote about the assets and liabilities included in the estate in the article: “Principles of Inheritance and Declaration of Acquisition of Inheritance”.
What Does Accepting Inheritance With the Benefit of Inventory Mean?
In the case of accepting inheritance with the benefit of inventory, the heir is liable for the estate’s debts only up to the value of the net estate as determined in the inventory list or inventory report. The net estate comprises the assets that increase its value and provide benefits to the heir.
This limitation does not apply if the heir fraudulently omitted from the inventory list or inventory report:
- Items belonging to the estate, or
- Items included in legacy-specific bequests.
The same applies if the heir fraudulently included non-existent debts in the inventory.
What Is the Difference Between an Inventory List and an Inventory Report?
An inventory list of the net estate is a private document prepared by the heir on an official form, available on the Ministry of Justice website.
The inventory list discloses:
- Items belonging to the estate and specific legacies, indicating their value as of the time of the estate’s opening,
- The estate’s debts and their amounts as of the time of the estate’s opening.
If additional data is discovered after the inventory list is submitted, it must be supplemented. The inventory list is filed in court or before a notary, who then sends a protocol of this action to the court. In both cases, the so-called “court of inheritance” is involved, which is:
- The court of the deceased’s last habitual residence,
- If undeterminable, the court where the estate or part of it is located,
- If none of the above applies, the District Court for the City of Warsaw.
The submission of the inventory list is publicly announced on the court’s website and notice board. Heirs who submitted the inventory list must settle debts according to its contents but cannot claim ignorance of an inventory list submitted by another heir, legatee, or executor of the will.
Conversely, the inventory report is an official document prepared by a court-appointed bailiff upon the court’s order, based on the request of an individual who proves that they:
- Are an heir entitled to a reserved portion,
- Are a legatee,
- Are an executor of the will, or
- Are a creditor with written proof of a claim against the deceased.
It is also possible to submit the request directly to the bailiff, who will notify the court, which then issues the necessary order. The inventory report contains the same information as the inventory list. Once completed, the bailiff sends the records to the court, which may order its supplementation.
If discrepancies arise between the inventory list and the inventory report, the latter takes precedence.
Why Doesn’t the Declaration of Acquisition of Inheritance End the Inheritance Procedure?
As I wrote in the article: “Principles of Inheritance and Declaration of Acquisition of Inheritance” , our law treats the estate holistically, and inheritance is based on the principle of universal succession. This means that heirs inherit all rights and obligations as a whole. When there are multiple heirs, each inherits a fractional share of the estate.
As a result, the co-ownership of the estate arises among the heirs by operation of law. This co-ownership is characterized as joint ownership in fractional shares. It encompasses all items and rights included in the estate. This also applies to the debts of the deceased, for which the heirs are jointly and severally liable. Consequently, creditors of the deceased may demand repayment from all heirs simultaneously, from several, or even just one of them, at their discretion.
If one of the heirs pays a debt, they are entitled to a so-called recourse claim, which allows them to seek reimbursement from the other heirs who did not settle the debt, in proportions corresponding to their respective shares.
The co-ownership of the estate is reflected in the shares assigned to individual heirs. These shares can be determined by:
- The testator, who specifies their size in the will, or
- Provisions of the Civil Code in the case of intestate succession.
Thus, heirs under co-ownership do not have independent, separate rights to specific items and rights within the estate. Each heir is entitled to co-possession of the estate and its use, provided this does not conflict with the co-possession and use by other co-heirs. For example, if one heir uses an apartment while several heirs inherit the property and one prevents others from using it, such behavior would be unlawful.
Co-heirs jointly manage the estate. Each heir may dispose of their share in individual items only with the consent of all other heirs or after obtaining appropriate court approval. In the absence of such consent, any such action is ineffective to the extent it infringes on the rights of other heirs as provided under estate division regulations.
It is important to note that this legal status applies to heirs whose acquisition of the estate has been formally confirmed through a court ruling on inheritance acquisition or a notarial certificate of inheritance.
To change this status, an additional inheritance procedure is necessary, as the declaration of inheritance acquisition does not conclude the process. This additional step is the division of the estate.
What Is the Division of the Estate?
The division of the estate is a procedural mechanism aimed at determining the value of specific items within the estate and distributing them among the heirs, who then become their exclusive owners. It constitutes the actual division of the estate among all heirs.
Thus, the division of the estate is the next step after heirs obtain a notarial certificate of inheritance or a court ruling confirming the acquisition of inheritance. These documents only identify the heirs and their shares in the estate. However, it should be noted that, in most cases, the declaration of inheritance acquisition and the division of the estate are conducted in a single proceeding.
It is important to know that the division of the estate is not mandatory and depends entirely on the will of the heirs. Any heir may request it at any time.
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What Are the Legal Consequences of the Division of the Estate?
The division of the estate has significant legal consequences for the heirs. Specifically, it results in:
- The estate ceasing to exist as a cohesive property mass,
- The termination of co-ownership of the estate,
- The allocation of estate components among the heirs, making them the exclusive owners,
- Heirs gaining full freedom to dispose of the inherited items, such as selling, donating, or transferring them,
- The cessation of joint and several liability of heirs for the deceased’s debts—each heir becomes independently liable for a portion of the debts proportional to their share in the estate,
- Heirs being liable for the debts proportionally to the value of the assets they received.
How Can the Division of the Estate Be Conducted?
Under current law, the division of the estate can occur:
- Through an agreement among all heirs, or
- By a court ruling at the request of any heir.
How to Conduct the Division of the Estate by Agreement?
The division of the estate by agreement can only take place if all heirs fully agree on how it should be carried out. There must be no disputes regarding the necessity or method of division, the allocation of items, or the amounts of any compensatory payments or equalizations. Additionally, all heirs must consent to sign the agreement, which may also be done through proxies.
It should be noted that the agreement can be concluded in any form, even verbally. However, it is advisable to document the agreement in writing for evidentiary purposes. This facilitates proving its terms and the parties’ intentions in court if disputes arise.
In cases where real estate is part of the estate, the agreement must be executed as a notarial deed to be valid. Without this form, the agreement will be legally ineffective. If the estate includes a business, the agreement should be made in writing with notarized signatures. If the business includes real estate or is subject to succession management, the agreement must also be executed as a notarial deed.
The agreement must not contradict the law or public policy principles.
The contractual division of the estate may:
- Cover the entire estate, or
- Be limited to part of it.
The agreement should include:
- A detailed list of the estate’s components,
- Clear identification of the items subject to division,
- Their valuation,
- The method and scope of the division (whether it covers the entire estate or part of it),
- Specific allocation of items to individual heirs.
If the value of the assets received by one party does not match their share in the estate, the agreement may include provisions for compensatory payments to balance the shares.
It is also worth noting that an agreement made under the influence of a mistake may be annulled only if the mistake pertained to a factual condition the parties considered certain.
How to Conduct the Division of the Estate Through Court Proceedings?
In an application for the division of the estate, the following should be included:
- A reference to the court decision confirming inheritance acquisition or the registered certificate of inheritance, along with the inventory report,
- Information on the testaments made by the deceased, where they were submitted, and where they are located,
- A proposal on how the estate should be divided.
If no inventory report has been prepared, the application must specify the assets to be divided with a detailed description.
It is important to note that the composition and value of the estate to be divided are ultimately determined by the court. Thus, determining the estate’s composition is the court’s obligation.
Division of the Estate – Real Estate
If the estate includes real estate, it is necessary to provide evidence proving the deceased’s ownership of the property, such as a sales contract, an excerpt from the land and mortgage register, proof of property tax payments, etc.
What Information Should Co-Heirs Provide to the Court in the Division of the Estate?
Co-heirs must provide the court with:
- Their age,
- Occupation,
- Family status,
- Details of income and assets held by themselves and their spouses,
- How they have used the estate so far,
- Other circumstances that may influence the court’s decision on what each co-heir should receive from the estate.
If the estate includes an agricultural holding, co-heirs should provide information about circumstances favoring its allocation to one of them, as defined in Article 214 of the Civil Code.
What Are the Principles of the Judicial Division of the Estate?
A judicial division of the estate should cover the entire estate. It can be limited to part of the estate only for valid reasons. Partial division is permissible in special circumstances, such as when the estate includes a business. In such cases, the division considers the need to ensure the continuity of the business operations. This principle does not apply if the heirs and the deceased’s spouse, entitled to a share in the business, fail to reach an agreement.
The division of the estate is conducted in a non-contentious procedure. The court’s role is to determine the composition and value of the estate to be divided. The composition of the estate is assessed as of the date of the deceased’s death, while its value is determined according to the prices in effect at the time of the court’s ruling on the division.
Division of the Estate and Allocation to the Inheritance Schedule – Gifts Made Years Ago
Specific rules govern the inclusion of gifts and other benefits in the inheritance schedule during the division.
The inheritance schedule includes the estate assets augmented by certain benefits provided by the deceased to the heirs. It represents a greater total value than the estate alone.
Key points include:
- If the division occurs among descendants or between descendants and the spouse in statutory inheritance, they must include gifts and legacy-specific bequests in the inheritance schedule unless the deceased explicitly or implicitly exempted these from inclusion.
- Small customary gifts are not included in the schedule.
- If the value of a gift or legacy-specific bequest exceeds the heir’s share, the heir is not obligated to return the excess. In such cases, the gift or bequest and the obligated heir are excluded from the division.
- Descendants of the deceased must include gifts and legacy-specific bequests made to their direct ascendants.
The inclusion process involves:
- Adding the value of gifts and bequests to the estate or the portion subject to division among heirs obligated to mutual inclusion.
- Calculating the inheritance schedule and crediting each heir’s share with the value of the gifts or bequests.
The value of a gift is calculated based on its condition at the time of the gift but valued at prices applicable during the estate division.
Benefits derived from the gift or bequest are not included in the inheritance schedule.
These rules also apply to the costs of upbringing and education (general and vocational) incurred by the deceased for a descendant, provided these exceeded the average level customary in the community.
At the request of two or more heirs, the court may allocate parts of the inheritance schedule to them as co-owners in specific fractional shares.
Jurisdiction of the Court in Estate Division Proceedings
The jurisdiction of the court in estate division cases is determined by the relevant provisions of the Civil Procedure Code.
Typically, the court competent to hear such cases is the so-called inheritance court, as previously mentioned.
However, upon the request of a party, the inheritance court may transfer the case to a district court in the jurisdiction where:
- The estate or a significant portion of it is located, or
- All co-heirs reside.
What Can Estate Division Involve?
In both contractual and judicial division of the estate, the division may involve:
- Division in kind, assigning specific estate items to heirs according to their shares,
- Assigning items to one or more co-owners while obligating them to compensate the others,
- Civil division, involving auctioning estate items and distributing the proceeds among the heirs in proportion to their shares.
Division of the Estate – Payments to Co-Heirs
When the court determines compensation or payments to other heirs, it must specify:
- The deadlines and methods of payment,
- The amount and deadlines for interest payments.
The court may allow these obligations to be paid in installments, provided the total repayment period does not exceed ten years. The court may also postpone payment deadlines for due installments upon the debtor’s request in exceptional cases.
Division of the Estate – Fees
The court charges a fixed fee for an estate division application:
- 500 PLN if no agreement is included,
- 300 PLN if the application contains an agreed project.
If the division includes the dissolution of co-ownership, the fees are:
- 1,000 PLN without an agreement,
- 600 PLN with an agreement.
In Summary – The division of the estate is a significant step for heirs. It ends co-ownership of estate assets and allows heirs to individually manage the assets they inherit. However, the procedure and rules governing the division are complex and often require professional legal assistance of lawyers with experience in succession matters. Attempting to navigate this process alone can lead to wasted time, stress, and financial losses. Before taking on this challenge independently, consider consulting a qualified attorney who can provide guidance and expertise.
