Have you ever contemplated what will happen to your property, your business, your bank accounts, your collection of vintage cars, your crypto currency wallet – or your social media profiles – after your death? Based on previous enquiries brought before us by clients, this article answers a few of the most frequently asked questions.
Applicable law and jurisdiction
The first question that arises is that of the law governing the inheritance. Unless the testamentary disposition says otherwise, inheritances shall be settled applying the law of that country in which the testator had their habitual place of residence. In such a case, the court with jurisdiction over the case is the court of that state for the entire estate across the EU (with the exception of assets located in Ireland or Denmark). Assets located e.g. in Switzerland, the UK, or the U.S. come within the purview of the courts of those countries. For the rest of this article, we shall assume that Czech law applies and that Czech notaries are competent to open the will.
What is the estate?
The subject matter of the inheritance is everything belonging to the deceased – i.e., assets as well as debts (together forming the so-called estate). If the heir accepts the inheritance, then they are liable for the testator’s debts in their full amount, even if they should exceed the value of the inherited property. If the heir wishes to evade (or limit) this liability for debt, they must either disclaim the entire inheritance or invoke the right to contest individual items listed in the inventory of the estate.
With this in mind, our recommendation is to painstakingly record and document any items which will form part of the estate, including in particular assets which the notary will not necessarily be able to establish or which may even be completely unknown to your very own successors. You may either wish to inform them of such items during your lifetime or expressly reference them in your testament.
Are there persons whom I cannot exclude from my will?
Yes – under the concept of forced heirship, your descendants (or, as the case may be, their successors) are entitled to a compulsory portion of the inheritance. Czech law differentiates between heirs of age and minor heirs; minor heirs are entitled to at least ¾ of their statutory share in the estate, whereas an heir of age is entitled to at least ¼ of their statutory share in the estate. Forced heirs are entitled to a cash payment corresponding to their portion in the estate, and if you leave them out of your testament, then the other heirs will be obligated to satisfy that claim for payment.
What happens if the property regime of the testator’s marriage is the community of acquired assets?
Upon death of one of the spouses, the notary will, as a matter of the inheritance procedure, settle the community of acquired assets by dividing the joint marital property into equal halves, one of which goes to the surviving spouse and the other goes to the estate (whereas the surviving spouse is at the same time a statutory heir with respect to that estate).
What will happen to my business after my death?
Ownership participation in a corporation also becomes part of the inheritance – but do consider the possibility that the memorandum of association may stipulate that the individual shareholders’ shares cannot be inherited, or only subject to certain conditions. In such a case, the heir will not become a shareholder but is entitled to what is known as the settlement balance – compensation in the form of a cash payment. (The inheritance of shares in a joint-stock company cannot be proscribed in the same way.) It is thus at your discretion whether you wish your successors to become involved in the business alongside your current fellow shareholders or whether the company should instead be obliged to pay them off in the amount of the settlement balance.
What is the digital inheritance?
Digital inheritance can be understood to mean cash balances, data, credit, information and content tied to various online apps such as e-mail accounts, money in crypto currency accounts, Paypal, Google Pay / Apple Pay, betting sites or payment technologies, data stored in the cloud, access to accounting software, domain names, virtual money, etc. With respect to digital inheritances, it is advisable to determine whether they can be said to be located in the EU (which would make it possible for the Czech notary who opens the will to settle and dispose of them – whereas the additional question arises whether the Terms & Conditions of the company in question, such as Paypal, might not take precedence over Czech law), or whether the assets are located outside of the EU (e.g. in the U.S., in the UK, or in the UAE – in which case, an additional inheritance procedure would have to be commenced in the relevant country). Will the Czech notary (or, as it were, your heirs) be successful in locating, determining and disposing of such assets? In what way do you wish to transfer access to your digital wealth to your successors?
How can we help you?
Drawing up a last will and testament is unavoidably associated with a fair amount of administrative hassle. We’ll gladly assist you with the process, overseeing all its aspects and ensuring that the entire documentation is ironclad both in terms of the rules and requirements of the law and in terms of your desires and expectations.
If you are interested in our assistance with respect to drafting and perfecting your testamentary disposition, please drop an e-mail to jan.mandik@bnt.eu. We will send you more detailed information, including an initial questionnaire, and make the arrangements to record the testament in the form of a notarial deed.