Segregation of the Estate

Segregation of the Estate

When a person dies and creditor claims remain outstanding, the question often arises as to how these can be effectively enforced. This question becomes particularly relevant when the heirs’ assets are commingled with the estate. This is precisely where the segregation of the estate according to § 812 ABGB comes into play:

It protects certain claimants from unsecured access to the estate assets.

The segregation of the estate is a court-approved procedure by which the estate assets are managed separately.

Purpose of the Segregation of the Estate

The purpose is to secure specific creditor claims if there is a risk that the estate assets will no longer be available due to commingling with the heirs’ assets. In this process, a portion of the estate is separated from the heirs’ assets and placed under judicial control. The segregated assets form a special fund that remains reserved for the segregating creditors.

Sebastian Riedlmair
Harlander & Partner Attorneys „Die Absonderung schützt vor dem Totalverlust: Wer als Gläubiger zuwartet, riskiert, dass sein Anspruch in der Vermögensvermischung untergeht“

Eligible Parties

The segregation of the estate explicitly names creditors of the estate. These include:

• Creditors of the deceased
• Estate creditors, e.g., for funeral expenses or care of the deceased
• Legatees
• Beneficiaries of a compulsory share
• Maintenance claimants
• Surviving spouses or registered partners, insofar as they assert a preferential legacy

Each of these creditors can individually file an application for segregation. Heirs themselves may only utilize segregation if they are also creditors of the estate. This option is not available to heirs’ creditors.

Securable Claims

Segregation serves exclusively to secure obligatory claims, not real rights. Non-monetary claims, such as an obligatory claim for restitution, can also be covered. It is important that the applicant credibly demonstrates a concrete interest in security.

Prerequisites for Judicial Segregation

The court approves segregation only under the following conditions:

• The application must be filed before the legal finality of the decree of inheritance.
• The applicant must attest to (not prove) their creditor status and the endangerment of their claim.
• For beneficiaries of a compulsory share, proof of belonging to the group of beneficiaries of a compulsory share is sufficient.
• There must be an objective risk, for example, due to the heir’s free disposal of the estate assets.

Note: Under current legal provisions, a merely subjective concern is no longer sufficient. There must be an objectively comprehensible risk factor.

The heir can avert segregation by providing security. This security may also be provided from the estate’s assets.

Effect of the Segregation of the Estate

After approval, the segregated assets form a judicially managed special fund, separate from the rest of the estate and the heirs’ assets. Practical security is achieved through:

• Locking or sealing
• Appointment of a segregation curator

Since January 1, 2017, only the relevant portion of the assets is segregated, no longer the entire estate. In practice, this raises issues, for example, with indivisible assets such as real estate or artworks.

Creditors with a successful application for segregation have priority over the segregated assets. The heir is liable to them only with the segregated portion. For all other creditors, the heir is liable as after conditional acceptance, i.e., only limited to the assets of the estate.

Termination of the Segregation of the Estate

Segregation ends:

• if the heir provides suitable security,
• in case of unjustified approval (upon application or ex officio),
• if the prerequisites cease to exist, or
• if the creditor does not duly pursue their claim.

Important: Segregation can also be maintained beyond the decree of inheritance, as long as the prerequisites continue to exist.

Jurisdiction, Procedure, and Deadlines

• The probate court is competent, both internationally and nationally.
• The decision is made exclusively by the judge.
• Deadline: The application can be filed until the legal finality of the decree of inheritance.
• Applicable Law: The law of succession applies in conjunction with local procedural law.

Peter Harlander
Harlander & Partner Rechtsanwälte „Die Durchsetzung einer Verlassenschaftsabsonderung verlangt taktisches Vorgehen. Wer frühzeitig rechtliche Beratung einholt, sichert sich echte Vorteile im Verfahren.“

Your Benefits with Legal Assistance

The segregation of the estate requires legal expertise, tactical action, and precise knowledge of deadlines. Without a well-founded justification, the court will quickly reject applications. Legal representation ensures that your rights remain secured.

Our law firm supports you in:

• pursuing your claim even beyond the decree of inheritance.
• precisely attesting to your creditor status, for example, in cases of compulsory share, legacy, or maintenance claims,
• objectively presenting the risk of commingling assets,
• filing a legally sound application within the deadline,
• responding specifically to objections from the heir (e.g., by opposing the provision of security)

Frequently Asked Questions – FAQ