Inheritance Contract

Inheritance Contract

An inheritance contract enables married couples or registered partners to pass on their assets to their partner after death.

Eligible Parties

An inheritance contract offers married individuals or registered partners the option to pass on their assets to their partner after death. It includes a promise by the parties to bequeath part of their assets to each other upon death.

Eligible Parties for the Inheritance Contract

An inheritance contract can only be concluded between:

• Spouses or registered partners,
• Persons with a valid engagement or a promise to enter into a registered partnership

be concluded. For other constellations of persons, such as between parents and children or unmarried partners, the inheritance contract is not intended. These parties must resort to alternative forms of arrangement such as wills or gifts mortis causa.

Note: Engaged couples can only conclude an inheritance contract if they actually marry.

In addition, provisions can also be made in an inheritance contract, such as the obligation of one spouse to care for the other in case of illness and need for care.

Content and Effect of an Inheritance Contract

An inheritance contract must mandatorily include the appointment of the contracting partner as heir. At most three-quarters (75%) of the future estate assets can be disposed of. The remaining “pure quarter” must remain free and unencumbered, neither by compulsory portion claims nor by other dispositions.

If an inheritance contract disregards this provision and extends its dispositions to this part of the assets, it is invalid.

The contracting partner becomes the binding heir through the inheritance contract. Nevertheless, the testator remains completely free to dispose of their assets during their lifetime. They can sell, gift, or consume them. The legal position arising from the inheritance contract therefore only becomes effective upon death. The contracting partner previously only has an expectation of inheritance, nothing more.

Regarding that part of the assets for which the inheritance contract has made no provision, the deceased can freely dispose by will, for example, through a testamentary disposition. If the deceased makes no provision, statutory succession applies.

Binding Effect

The binding effect of the inheritance contract excludes later testamentary dispositions to the detriment of the contractual heir, unless they relate solely to the pure quarter. Consequently, later wills or legacies are invalid. However, testamentary dispositions that do not burden or further benefit the spouse or registered partner are permissible.

Formal Requirements of the Inheritance Contract

Inheritance contracts must be drawn up in the form of a notarial deed. This means:

• The contract is concluded with the involvement of a notary,
• Additionally, either a second notary or two witnesses must be involved,
• The strict formal requirements of a written will apply.

This formalization ensures that all parties understand the implications of the contract and that it is legally documented. Handwritten or merely privately written inheritance contracts are invalid.

Conditions for Validity

An inheritance contract requires both legal capacity and testamentary capacity of the parties involved. The person appointing the other as heir must have testamentary capacity at the time of execution. The appointed heir, in turn, must have the capacity to inherit at the time of inheritance.

Inheritance Contract in Favor of Third Parties

Inheritance contracts in favor of third parties, such as children or other relatives, are not permissible under Austrian law. Such a disposition merely has the effect of a revocable testamentary gift. The Supreme Court (OGH) has repeatedly emphasized this in its consistent jurisprudence. Only the contractually appointed spouse or partner can definitively determine the heir.

Relationship to Wills and Other Inheritance Instruments

In terms of hierarchy, the inheritance contract takes precedence over wills and statutory succession. This means:

• A later will cannot supersede the inheritance contract.
• Only the “pure quarter” remains available for other testamentary dispositions.
• The inheritance contract overrides existing statutory inheritance claims, with the exception of compulsory portion rights.

Note: The inheritance contract does not replace a will. You can and should regulate the free quarter by will to avoid later ambiguities.

Termination

The inheritance contract can be terminated in the following ways:

Termination by Mutual Agreement

An inheritance contract can only be revoked jointly, thus never unilaterally. The revocation, in turn, takes place in the form of a notarial deed or a court record.

Divorce or Dissolution of Registered Partnership/Marriage

If both parties separate equally or without fault, the inheritance contract automatically loses its validity in the event of divorce or dissolution of the registered partnership. In the case of divorce due to sole fault, the contract remains in favor of the innocent partner, unless otherwise agreed.

A contractually agreed right of acquisition can then be exercised immediately. This allows, for example, a share in real estate to be acquired at its appraised value.

Distinction from a Joint Will

The inheritance contract is clearly distinguishable from a joint will. Spouses or registered partners draw up a joint will and can revoke it themselves at any time without the other’s knowledge. The inheritance contract, however, is binding and can only be amended jointly. Therefore, anyone who wants to rely on a guaranteed appointment as heir needs an inheritance contract.

Sebastian Riedlmair
Harlander & Partner Attorneys „Wer sich auf eine verbindliche Erbeinsetzung verlassen will, kommt am Erbvertrag nicht vorbei – Testamente bieten diese Sicherheit schlicht nicht.“

Your Benefits with Legal Assistance

An inheritance contract is a powerful, yet complex instrument. Consultation with an experienced law firm like ours offers you the following advantages:

• Secure Drafting: We ensure that all legal formal requirements are met and your personal wishes are legally implemented precisely.
• Optimization of Compulsory Portions: We advise you on how to consider compulsory portion claims.
• Avoidance of Future Conflicts: A clearly formulated inheritance contract creates legal certainty and prevents disputes after death.
• Strategic Estate Planning: We develop a comprehensive asset succession plan with you – individual, tax-efficient, and family-appropriate.

Peter Harlander
Harlander & Partner Rechtsanwälte „Gerade bei Patchwork-Familien schafft ein Erbvertrag klare Verhältnisse und verhindert spätere Erbstreitigkeiten, die emotional wie finanziell belastend sein können“

Frequently Asked Questions – FAQ