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Reform of Belgian Inheritance and Gifts Law
The Minister, Mr. Koen Geens, had urged a major reform of Belgian inheritance and gifts law which mostly dated from Napoleon.
This reform was the subject of a bill filed at the beginning of the year.
The House of Representatives adopted it on July 20, 2017.
It went unnoticed in the press, which was devoted to the federal and Walloon tax reforms. But this is a profound reform of our inheritance law and other related matters (donations or gifts, minority, insurance contract, etc.).
The main changes provided by this reform are:
Reserved share of an estate (legitimate portion)
- Reserved share for children
So far the total share reserved for children was half of the estate if the deceased left one child; two thirds of the estate if there were two children (one third for each child) and three-quarters of the estate if the deceased left three or more children.
Henceforth, the total share reserved for children will be half the estate, regardless of the number of children. This reduction in the reserved share for children will make the deceased freer to dispose of his/her estate as he/she wishes, to the benefit of his/her spouse, to the benefit of a child who has more difficulties than other(s) or to the benefit of charity works that are close to his/her heart. Some will say that this margin of freedom could harm the children, in favour of a “girl friend” of their father ...
- Reserved share for ascendants
The share reserved for the ascendants has been abolished.
- Waiver of action for reduction
The reduction of donations can no longer be claimed by heirs entitled to a reserved share of the estate (entitled heirs) who have waived the abatement of the donation concerned through a unilateral statement in the deed of gift or subsequent to it.
The reporting of donations
- Reportable donations (advancements) vs. Non-reportable donations (donations made aside from the reserved share)
The doctrine now considers that a reportable donation can be transformed into a nn-reportable donation by the donor. The other way round is more problematic since the donor cannot withdraw rights from the donee without his/her consent, forcing him/her to report a donation that he/she was not initially obliged to report.
Henceforth it is possible to modify the nature of donations both ways: from reportable to non-reportable and the other way round.
The gift initially subject to report (advancement) may be subsequently exempted from being reported through an agreement between the donor and the donee. And vice versa, the gift originally granted aside from the reserved share of the estate (à titre de préciput), as share for betterment or exempted from being reported may be subsequently transformed into a reportable donation through an agreement between the donor and the donee.
The donor may also make this change in his/her will, but this amendment will only be valid if the donee accepts it.
- Value to report
Currently, the donation must be reported at the value on the date of donation or at the value on the date of death, depending on the type of the property given (movable or real estate assets) and according to the provisions of the deed of gift.
In order to simplify these rules the legislator has provided that the heir must report the advancement at the intrinsic value of the given property on the date of donation, indexed from that date and until the date of death, to the consumer price index (CPI) of the donor's month of death. Additionally, no account shall be taken neither of the fruits produced by the property given from the date of donation and to the date of the death of the testator nor of the advantage to the donee resulting from the enjoyment of the property during that period.
However, if the donee has not had full ownership of the given property from the date of donation (e.g. because the donor has reserved the usufruct), the donation will be reported at the value of the given property on the date of the death of the testator, if the donee gets / got full ownership of the property on the date of death. However, if the donee acquires full ownership of the given property at a date subsequent to the death (for example, because the donor has provided for a reversion of usufruct to his/her spouse), the donation will be reported at the value of the given property on the date of death, after deducting the value of the charges which might impede the exercise of the full ownership right on the property.
If the donee gets full ownership of the given property at a date subsequent to the gift but before the death of the testator, the donation will be reported at the value of the given property on such date, being this value indexed from that date and to the date of death in accordance with paragraph 1 above.
The distribution of the estate
The rules of distribution have been simplified.
Rights of the surviving spouse in relation to the children - additional rights for the legal cohabitant
In particular, it can be noted that:
- The surviving legal cohabitant collects, upon death of the donor, the usufruct of the immovable asset used during the time of cohabitation as the family home, and the furniture garnishing it, even if the donor has given this property by reserving the usufruct, provided that the legal cohabitant already had this status at the time of the donation.
- Where the surviving spouse is only partially entitled to the usufruct of the estate (for example, to the usufruct of half of the estate), this usufruct will encumber by priority the available share and for the remainder only the estate portion reserved for children.
Agreement as to succession
The legislator introduces the possibility of an agreement as to succession between the father or mother and their children
- The father or the mother can establish, with all his/her heirs presumptive in descending direct line, a global agreement as to succession. This agreement establishes the existence of a balance between these heirs presumptive, in particular in respect of the donations or gifts made by the father or the mother respectively to them before the signing of the agreement, as advancement or as gift granted aside from the reserved share of the estate, the donations granted under the agreement and, where applicable, the situation of each of the heirs presumptive.
In order to establish this balance, the parties may agree to assimilate to other gifts other benefits granted to the heirs presumptive previously or under the terms of the agreement itself.
The agreement may also allot one or more heirs presumptive in a direct descending line.
- This agreement will be subject to certain relevant formalities (public deed, prior meeting, deadlines, etc.).
The bill will enter into force on the first day of the twelfth month following its publication in the Moniteur belge, probably on August 1, 2018.
The provisions of the reform shall apply to estates opened from the coming into force of this Law. They shall also apply to donations made by the deceased prior to the coming into force of this Law but with certain exceptions and particularities in an attempt to respect the will of the donor who made the donations.
These complex rules, concerning donations already made and future successions, will require re-examining heritage planning already agreed in order to verify that the new provisions do not undermine the will of the family.
 The legitimate or natural portion is the part of the deceased’s estate that descends to natural heirs as of right;
Share of an estate which passes by law to family and dependants.
Valérie-Anne has been admitted to the Brussels bar in 1999 and was a tax partner at Afschrift Law Firm. She advises and represents corporations, managers and individuals in direct and indirect tax matters. She has also gained extensive experience in wealth and estate planning. Furthermore, she advises and assists in tax litigation matters.
Valérie-Anne lectures tax law at the Solvay Business School (ULB) and at ICHEC (Brussels).
She has written numerous publications in the field of taxation and is regular guest speaker at seminars.