How to Refuse an Inheritance With Debt
– Step 1: Avoiding Unsuspected Debt
– Step 2: What to do if there are unsuspected debts
– Step 3: Accepting or Refusing the Estate: Are You Unsure?
In real estate matters, an heir who accepts an estate also undertakes to pay the deceased’s debts, even those of which he is unaware. How can you avoid inheriting debts that exceed the estate’s value, and what should you do if this situation arises? In this post, you will find out how to refuse an inheritance with debts.
1. Avoiding the recovery of unsuspected debts
Competing net assets
To avoid assuming debts incurred by the deceased, you can accept the inheritance, but only to the extent of the net assets:
– this means you accept the estate;
– but not beyond the difference between the value of the inheritance and the debts associated with it.
This protects your assets from the deceased’s creditors.
To accomplish this step:
– you will have to make a declaration at the judicial court (ex-court of the first instance) of the place of residence of the deceased;
– For this, you can be assisted by the notary in charge of the estate.
Once the declaration has been made, you must draw up an inventory:
– this very detailed inventory of the deceased’s estate must be made by a notary, a bailiff or an auctioneer;
– it must be delivered within 2 months following the declaration.
Good to know: this procedure is lengthy and costly and is only interesting if the deceased’s assets are substantial.
2. What to do if there are unsuspected debts?
If you have accepted the inheritance in full, you must repay all the debts the deceased owes.
However, there is a last resort:
– You have 5 months to file an appeal with the judicial court where the deceased’s last residence was located.
– In particular, you will have to prove the following:
◦ that you had no way of knowing about a hidden debt;
◦ that payment of the debt would cause you a severe financial imbalance.
Good to know: it is highly recommended that you have the assistance of an attorney.
3. Accepting or refusing the estate: are you hesitating?
In general, the heirs must decide pretty quickly whether or not to accept the estate:
– 4 months after the death, the creditors or the other heirs can put you on notice to make a decision;
– you will then have 2 months to answer;
– if you do not respond within this period: this will be considered acceptance of the estate.
It is sometimes difficult to make this kind of decision in a hurry. Especially since, even without officially accepting the estate, you may still be liable for the deceased’s debts if you act as such.
Good to know: if no one forces you to make a decision, you have 10 years to do so.
Don’t panic. You can still take care of the most urgent things:
– pay the funeral expenses;
– pay the last medical expenses;
– pay late rent, etc.
Having paid these few urgent debts will not mean that you have accepted the estate and, therefore, the debts that go with it.
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