What property constitutes an individual’s estate for succession purposes?
From a Belgian inheritance tax perspective, an individual’s estate consists of all the assets left after he or she has died. Gifts of movable assets made within three years prior to the donor’s decease without payment of gift tax are added to the taxable basis as fictitious legacies. Certain gifts, irrespective of when they were made, will always qualify as fictitious legacies that must be added to the taxable basis (eg, gifts made on the condition precedent of the decease of the donor).
According to current Belgian legislation, trusts are not transparent for inheritance tax purposes. If a Belgian individual is the settlor of an irrevocable discretionary trust and dies as a Belgian resident, the assets of the trust are not part of his or her estate for inheritance tax purposes. However, from the administrative standpoint of the Belgian tax authorities, distributions made by the trust to a beneficiary upon or after the decease of the settlor are deemed to be fictitious legacies made by the settlor in favour of the beneficiary. Inheritance tax is due by the beneficiary over the value of the distribution at the moment of the distribution. The inheritance tax rate depends on the value of the distribution and on the degree of kinship between the settlor and the beneficiary. If no distributions are made out of the irrevocable discretionary trust, no inheritance tax is due.
According to an administrative standpoint of the Belgian tax authorities, assets held in a revocable trust are taxable in the estate of the settlor if he or she died as a Belgian resident.
From a civil law perspective, an individual’s estate consists, in principle, of all assets an individual leaves upon decease. However, Belgian inheritance law contains forced heirship rules. In order to safeguard the forced heirship rules, gifts made during the deceased’s lifetime are also taken into account to calculate the reserved portion of forced heirs.
To what extent do individuals have freedom of disposition over their estate during their lifetime?
In principle, individuals can gift everything they own during their lifetime. However, certain legal restrictions apply.
Individuals married under the regime of community of property cannot give away common goods without the consent and approval of their spouse. An individual cannot give in such a way that he or she endangers the family interests (eg, he or she cannot give away the family home, not even if the family home is personal property).
Also, an individual must take into account that children and the surviving spouse have forced heirship rights according to Belgian inheritance law. The basis on which forced heirship is calculated includes not only the estate at the date of decease, but also all the gifts that have been made by the deceased during his or her lifetime (‘fictitious mass’). Therefore, if forced heirs cannot receive their reserved portion because of gifts made, they can claim for gifts to be reduced.
A new inheritance law entered into force on 1 September 2018. The rules on forced heirship of children have been rewritten.
To what extent do individuals have freedom of disposition over their estate on death?
In a will, an individual can freely dispose of his or her estate. However, in the event that Belgian law applies to the succession, or in the event that Belgium can impose the Belgian forced heirship rules on the basis of the applicable conflict of law rules, both the surviving spouse and the children of the deceased can invoke a forced heirship on the basis of Belgian forced heirship rules.
The forced heirship is calculated on the estate of an individual at the moment of death as well as on all assets that have been gifted by the individual during his or her lifetime (fictitious mass).
The new inheritance law limits the combined forced heirship of children to half of the fictitious mass (in bare ownership when there is a surviving spouse), irrespective of the number of children.
In principle, the surviving spouse is entitled to a forced heirship of at least half of the fictitious mass in usufruct (at least the usufruct on the family home). As usufructuary, the surviving spouse is entitled to the income of the goods (eg, rental income or interests and dividends). The bare owner is, in principle, entitled to the capital gains. Usufruct will end automatically upon decease of the usufructuary. In that case, the bare owner of the goods acquires full ownership.
In the event that at least one spouse has children from a previous marriage, it is possible to limit the inheritance rights of the surviving spouse in a marriage contract.
The new Belgian inheritance law makes it possible for a parent to come to a valid agreement with his or her children on the division of the estate upon the demise. The agreement is binding on all parties involved.Intestacy
If an individual dies in your jurisdiction without leaving valid instructions for the disposition of the estate, to whom does the estate pass and in what shares?
If the deceased leaves a surviving spouse and children, the surviving spouse receives the estate in usufruct. The children receive the estate in bare ownership, each in equal shares.
In the event that there is no surviving spouse, the children receive the estate in full property, each in equal shares.
If the deceased leaves a surviving spouse but no children, the surviving spouse receives the deceased’s share in the community property in full ownership, the full ownership of the deceased’s share in the assets jointly held by the spouses, as well as the usufruct of the deceased’s personal property. The bare ownership of the deceased’s personal property is divided between the surviving blood relatives on the basis of the degree of kinship with the deceased.
If the deceased leaves no surviving spouse nor children, the estate is divided between the surviving blood relatives on the basis of the degree of kinship with the deceased.
In a marriage contract, gifts can be made to the surviving spouse.Adopted and illegitimate children
In relation to the disposition of an individual’s estate, are adopted or illegitimate children treated the same as natural legitimate children and, if not, how may they inherit?
Only children for whom legal parentage has been established can inherit from their parents.
It is not required for the parents to be married in order to establish legal parentage.
In principle, maternity is established automatically, as the name of the mother of the child is included in the birth certificate.
In the event that the mother is married, in principle, paternity (or co-maternity) is established automatically through the presumption that the mother’s spouse is the father (or co-mother) of the child.
In the event the parents of the child are not married, the father (or co-mother) of the child needs to acknowledge the child in order to establish legal parentage.
An adopted child has the same rights to the estate of his or her adoptive parent as other children for whom the legal parentage has been established.Distribution
What law governs the distribution of an individual’s estate and does this depend on the type of property within it?
Since 17 August 2015, the European Union’s Succession Regulation (EU) No. 650/2012 has determined the conflict of law rules. In the event that no choice of law has been made in a will, in principle, the law of the state in which the individual had his or her last habitual residence is applicable. However, if it is clear from all circumstances that, at the moment of death, the deceased had a manifestly closer connection with another state, the law of that state is applicable. The applicable law governs the distribution of both the movable and the immovable estate.
A choice of law can be made in the will for the law of the state in which the resident has nationality. This law governs the distribution of both the movable and the immovable estate.
On the basis of the European Union’s Succession Regulation, Belgium will respect the application of non-Belgian law, even if the foreign law infringes Belgian forced heirship rules.Formalities
What formalities are required for an individual to make a valid will in your jurisdiction?
According to Belgian law, an individual can make either a public or notarial will, a holographic or handwritten will, or an international will.
A public or notarial will must be drafted by the notary. The will must be read out by the notary to the testator in the presence of either two witnesses or another notary. The will must be dated and signed by the testator.
A testator can also personally draft his or her will. To be valid, the entire content of the will must be handwritten by the testator. The will needs to be dated and signed by the testator.
An international will can be drafted by the notary, by the testator or by a third party. To be valid, the international will does not need to be handwritten. The testator needs to sign the will in the presence of a notary and two witnesses.Foreign wills
Are foreign wills recognised in your jurisdiction and how is this achieved?
If a Belgian resident who is not a Belgian national has drafted a will in accordance with the laws of his or her state of nationality, in principle, Belgium will recognise the will provided that it is valid according to the laws of the state of nationality. In principle, it will not be possible for the heirs to challenge the content of the foreign will on the basis of the forced heirship rules of Belgian inheritance law.Administration
Who has the right to administer an estate?
The executor appointed in the will has the right to administer the estate. However, such a testamentary executor has very limited rights. If no executor has been appointed, the heirs administer the estate.
How does title to a deceased’s assets pass to the heirs and successors? What are the rules for administration of the estate?
Title to a deceased’s assets passes to the heirs and successors on the basis of a notarial certificate of succession.
Provided that there is no executor, the notarial certificate of inheritance gives the heirs the authorisation to administer the estate. They must take all precautionary measures to preserve the assets until the estate is divided between the heirs.Challenge
Is there a procedure for disappointed heirs and/or beneficiaries to make a claim against an estate?
Disappointed heirs may start a procedure before the court of first instance.
Law stated dateCorrect on:
Give the date on which the information above is accurate.
11 September 2020.