Personal Finance & Money Asked on June 11, 2021
Are there any countries in the world where the debts of the deceased must be inherited by the deceased’s heirs?
In the UK and USA, it seems to be well understood that if the deceased’s estate is insufficient to cover any outstanding debts, then those debts are written off once the estate is exhausted; the heirs do not take on any further liability for them. Any discussion of the topic seems to revolve around potential continuation of debts shared via joint credit cards or mortgages, but that’s not the sort of thing I’m looking for.
Elsewhere, there seem to be places where things are a little less straightforward. For example, in Poland there seemed to be some quirk in the law which allowed heirs to become unwittingly liable for debts in excess of any assets – see this story, for example – but the law was changed in 2016 to limit the impact. And in Japan, as I understand it (source), inheritors must consent to take on any debts in addition to assets; but as inheritances can be renounced noone is forced to take on debts in excess of assets.
Are there countries where heirs have no choice but to take on full liability for the debts of their ancestors? (If not, has it always been so, or have things been different in the past?)
Update: a bit more googling around found me this (from Slavery International):
Bonded labour is most widespread in South Asian countries such as
India and Pakistan. Often entire families have to work to pay off the
debt taken by one of its members. Sometimes, the debt can be passed
down the generations and children can be held in debt bondage because
of a loan their parents had taken decades ago.
Which seems an example of the sort of issue I’m thinking of. However, wikipedia claims
In 1976, Indira Gandhi and the Indian government passed the Bonded
Labor System Act of 1976 which released bonded laborers and stated
that the practice of debt bondage in India was no longer allowed.
so I’m not sure I can count that, at least not in India (even if, in practice, it still happens, due to custom or coercion). Anywhere where this sort of intergenerational debt bondage still happens and is still unequivocally legal would be certainly be of interest though.
It's not a full answer, and I'll try to research this more later to give a more comprehensive answer, but. As far as I know, in some EU countries, and at least in Romania, if you accept the inheritance, you are liable for the debts, even if they go higher than the estate.
Of course, you always have the option to refuse the inheritance altogether and there is no option to partially accept the inheritance. You have the right to know what you inherit though, so both what you get and what you owe are made known to you. This may make sense in some cases where the 2 are more or less equal, but what you get is either sentimental, or strategically important for you in particular.
Update: Still not a comprehensive answer, but an issue was raise in the comments that such a system is prone to fraud because the debt could be given through will to person A, who can refuse the debt, and the rest of the inheritance to persons B-Z. This issue is moot, because the inheritance is all done at once among all those who accept the inheritance, which in this case it would be persons B-Z. First, persons B-Z get whatever it says in the will, if there is one, and the rest is split according to the law. This means that persons B-Z would also inherit the debt, which was refused by person A.
Answered by Andrei on June 11, 2021
In France, as stated on the government’s page here : https://www.service-public.fr/particuliers/vosdroits/F21571, you have the option of declining the inheritance. You also have an option to accept only the net assets !
Answered by Théophane on June 11, 2021
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