Inheritance Purchase
An inheritance purchase means that a person sells their future inheritance claims in exchange for money or other consideration. It is a compensated transfer of the right of inheritance between the death of the testator and the so-called ‘Einantwortung’ (the conclusion of the probate proceedings).
The Inheritance Purchase
An inheritance purchase is a contract in which a person sells their future inheritance claims in exchange for consideration, usually money. In this process, the seller transfers their claims to a buyer even before the death of the testator.
This buyer thus assumes all opportunities, but also risks, associated with the subsequent inheritance. Such a contract must be notarized in Austria to be legally valid.
Opportunities and Risks of an Inheritance Purchase
The buyer benefits from all advantages of the subsequent inheritance but also bears potential risks. For example, if it turns out that the inheritance is worth less than assumed, the buyer bears this loss. Conversely, they receive the profit if the inheritance is more valuable than expected.
Legal Requirements
- Before the inheritance occurs, the sale of a merely expected inheritance (before the death of the testator) is immoral according to § 879 para 2 item 3 ABGB and therefore prohibited.
- The buyer assumes all rights and obligations of the seller regarding the inheritance, but not obligations that personally affect the seller.
- The buyer takes over the right of inheritance in the condition it is in at the time of transfer.
The contract for the inheritance purchase must be notarized in Austria. Without this notarization, the purchase contract remains invalid.
Liability and Risks
The inheritance purchase is a so-called aleatory contract. This means that the buyer often does not know exactly what they are getting (e.g., debts or more assets).
Therefore, a purchase without a prior inventory cannot be challenged, even if the value is much lower than the price.
Rights and Obligations of the Buyer and Seller
Through the ‘Einantwortung’, the buyer becomes the legal successor of the deceased, and the entire estate passes to them.
The seller is liable for the existence of the right of inheritance. If an inventory exists, they are also liable for its accuracy. Without an inventory, liability is severely limited, and the buyer bears the full risk for the actual value of the inheritance.
However, liability can also be adjusted through a contractual agreement.
Inheritance Purchase in Case of Liquidity Needs or Risk Avoidance
An inheritance purchase can be advisable if the seller needs money immediately or wishes to avoid the risk of an inheritance.
Sebastian RiedlmairHarlander & Partner Attorneys „Aufgrund der rechtlichen Komplexität empfehlen wir eine individuelle Beratung.“
