Acceptance of Inheritance with the Benefit of Inventory

Legal Insight

July 2024

Eleanna Karanikola, Attorney

Summary: In our previous article (see here), we thoroughly analyzed the issue of renouncing inheritance by a minor heir. In this note, we will attempt a comprehensive view of the institution of accepting inheritance with the benefit of inventory, giving particular emphasis to the specific issues of the inventory process and the special case of the minor heir.

1. General

Firstly, the fundamental principle of inheritance law is the rule of universal succession of the deceased by their heirs. Specifically, upon the devolution of the inheritance, the respective heir will automatically succeed to all the rights and obligations of the deceased, that is, the entirety of their legal relationships, provided they are inheritable, while at the same time, the heir will acquire the estate of the deceased as a whole (Article 1710 para.1 of the Civil Code). It should be noted that the inheritance property, which consists of both its assets (real estate, movable property, etc.) and liabilities (debts to third parties, etc.), will be fully and indiscriminately integrated into the personal property of the heir, resulting in the heir being liable for the obligations of the inheritance also with their personal property, as stipulated in Article 1901 of the Civil Code.

As a result, this personal and unlimited liability of the heir for the liabilities of an inheritance may prove catastrophic for the heir if the inheritance turns out to be heavily indebted. In such a case, the heir has the option to utilize the provision offered by the legislator as a counterbalance to the unlimited liability and accept the inheritance with the benefit of inventory. Specifically, according to Article 1902 of the Civil Code: "As long as the heir has the option to renounce the inheritance, they can declare that they accept it with the benefit of inventory. The declaration is made to the secretary of the probate court. [...]". In simple terms, to protect their interests, the heir has the legal right to declare that they accept the inheritance with the benefit of inventory, which entails, on the one hand, the complete separation of the inheritance property from their personal property and, on the other hand, the limitation of their liability for the liabilities of the inheritance property to its assets, thus introducing a "crack" in the system of universal succession. Consequently, there will be no confusion between the two properties as the rights and obligations of the inheritance will constitute a separate group under the management of the heir. Accordingly, inheritance creditors will not have the right to seek satisfaction of their claim from the personal property of the heir, and vice versa, the personal creditors of the heir cannot be satisfied from the inheritance property (Articles 1904 and 1905 of the Civil Code).

It is also noted that if there are multiple heirs, the declaration of acceptance with the benefit of inventory does not benefit the other heirs if they have not made a corresponding declaration and continue to be liable with their personal property up to the amount of their inheritance share. However, it is accepted that if there are multiple heirs with the benefit of inventory, each of them can continue or rely on the inventory conducted by their co-heir.

2. Conditions and Procedure of Inventory

According to Article 1902 of the Civil Code, the acceptance of inheritance with the benefit of inventory is made by the heir's declaration to the secretary of the probate court (see also Article 812 of the Code of Civil Procedure), which is the Magistrate's Court of the last residence or, if there is no residence, of the last domicile of the deceased at the time of death (Article 810 of the Code of Civil Procedure), and a related report is drawn up by the secretary. However, it should be emphasized that for the acceptance with the benefit of inventory to be valid, the heir must not have already explicitly or implicitly accepted the inheritance. Practically, the heir has the right to accept the inheritance with the benefit of inventory only within the four-month period provided by the legislator to renounce the inheritance (Article 1847 of the Civil Code) and on the condition that they have not already renounced or accepted the inheritance, while otherwise, its validity is judged based on the general conditions of any acceptance.

However, the benefit of inventory obtained by the heir with their declaration is subject to the condition of timely inventory since, according to Article 1903 of the Civil Code: "The heir with inventory must complete the inventory of the inheritance property within four months from the declaration of the previous article." The aforementioned four-month period, referred to in the above provision, which is mandatory law, is an extinguishing deadline, but it is accepted that the provisions for the suspension of the statute of limitations can be applied analogously, as we will explain below. Inventory is defined as the precise and faithful recording of the elements of the inheritance property, both assets and liabilities, aiming at the accurate verification of the existence or condition of the inventoried items in such a way that their existence or concealment cannot be disputed, as the ultimate goal of the process is to inform the inheritance creditors of the total inheritable items – movable, immovable, and intangible – which are liable for their claims.

In more detail, the inventory is ordered by the Magistrate of the district where the inventory property is located, upon application by any of the heirs who have accepted the inheritance with the benefit of inventory. This inventory is characterized as a judicial inventory and is considered a regulatory measure taken under the provisions of voluntary jurisdiction and Article 838 of the Code of Civil Procedure, without requiring the condition of risk prevention. The Magistrate handling the case will order the inventory of the inheritance items, which will be conducted by the appointed Notary or their legal substitute in case of their impediment. Accordingly, according to Article 840 of the Code of Civil Procedure, the Notary will draw up a related inventory report with the participation of the two experts appointed by the court, including, among other things, the precise description of the items and the accurate estimation of their value at the time the inventory is drawn up. It is noted that for inventory purposes, sealing of the inheritance is not required, but in certain cases, it is advisable for the protection of the inheritance.

It is worth noting that if items to be inventoried are located in multiple districts, the inventory may be ordered by the Magistrate of the district where at least one of the inheritance items is located. In such a case, the appointed Notary in the district where the items are located may request the transfer of all movable items to their office and the valuation of the immovable items by the experts so that the inventory of all inheritance elements can be conducted due to the unity of the inventory process and for the economy of time and expense of the already burdened heir (see also decision no. 670/2008 of the Magistrate's Court of Chalandri).

3. Cases of Acceptance with the Benefit of Inventory by Law - The Special Case of the Minor Heir

In certain cases, the legislator has stipulated that the acceptance of inheritance takes place mandatorily with the benefit of inventory and without the need for special formalities (Article 1902 para. 2 of the Civil Code). Specifically, the following cases fall into this category:

a) When the inheritance devolves to a minor child under parental care or guardianship (Article 1527 para. 1 and Article 1625 para. 2 of the Civil Code, respectively),

b) When the inheritance devolves to persons under deprivation or supplementary judicial support (Article 1678 para. 4 of the Civil Code),

c) When the inheritance devolves to the State (Article 118 of the Introductory Law to the Civil Code), public law legal entities, the Church of Greece, the Archdiocese of Athens, Metropolises, ecclesiastical public law legal entities (Article 46 para. 4 of Law 490/1977), the Universities of Athens and Thessaloniki (Articles 238 and 227 para. 2 of Law 5343/1932), and a series of foundations, without the obligation of declaration or drafting of an inventory.

Regarding the first two cases, this regulation aims to protect individuals from the potential risk of being burdened with foreign debts, being liable with their personal property due to the negligence of their legal representatives, specifically their parents or guardian or judicial support. Concerning the minor heir, according to Article 1527 of the Civil Code: "The inheritance devolved to a minor child is considered always accepted with the benefit of inventory, and the child, subject to the provisions of Article 1912, does not lose this benefit. [...]". At the same time, according to Article 1912 of the Civil Code: "In the case of persons incapable or with limited capacity for legal transactions for whom the acceptance of the inheritance by law is with the benefit of inventory, the loss of this benefit due to the absence of an inventory occurs if within one year after they become fully capable, they do not complete an inventory." Therefore, a minor heir who accepted the inheritance during their minority, either explicitly or implicitly, must complete an inventory at the latest within one year after reaching adulthood to retain the benefit.

This obligation remains unchanged after the introduction of the interpretative provision of Article 1912 of the Civil Code (Article 35 of Law 4786/2021), according to which the heir who reaches adulthood is entitled to renounce the inheritance within the one-year period of Article 1912 of the Civil Code (for a more detailed analysis of the issue, see here). This is because Article 1912 of the Civil Code, which extends the inventory deadline, applies in cases where the minor heir has already become the definitive heir, that is, in cases where their legal representatives have accepted the inheritance, explicitly or implicitly, during their minority.

It is worth noting that after the addition of Article 35 of Law 4786/2021 to Article 1912 of the Civil Code, the presumed acceptance of the inheritance, which occurs with the lapse of the renunciation period, is inferred from the passage of one year after the minor heir reaches adulthood. As a result, since the definitive acquisition of the inheritance will occur when the minor heir has already reached adulthood, the presumed acceptance of the inheritance will be without the benefit of inventory.

4. Reasons for Loss of the Benefit - Deadline for Completing the Inheritance Inventory

For the loss of the benefit of inventory, the legislator has strictly defined the cases in which this legal consequence occurs. Specifically, according to Article 1911 of the Civil Code, the heir loses the benefit of inventory for the following reasons: 1) if they did not complete the inventory on time, 2) if they fraudulently made an inaccurate inventory, 3) in the case of fraud regarding the management of the inheritance group, and 4) if they sold real estate or public bonds or shares or bonds of joint-stock companies without court permission.

Regarding the first case of loss, it is generally accepted that "completing" the inventory on time means submitting the application to the competent Magistrate's Court within the four-month deadline, as this obligation is interpreted restrictively. This is because the general provisions on the suspension of the statute of limitations (Articles 279 and 255 of the Civil Code) will apply to this period, and thus the time between the submission of the inventory application (which must be submitted on time) and the issuance of the final decision constitutes a reason of force majeure that suspends the completion of the period. Naturally, the same applies to the special case of the minor heir, where the inventory completion period is extended until the first year of their adulthood, as already analyzed in detail.

The above has been decided in decision no. 64/2016 of the Magistrate's Court of Lamia, stating: "If the heir fails to complete the inventory within four months from the time they made the declaration of acceptance with the benefit of inventory, they lose the benefit (Article 1911 para. 1 of the Civil Code, Supreme Court decision no. 246/1993, ΝοΒ 42, 667). The term 'completed' is interpreted restrictively for the heir, meaning that submitting the application for the Magistrate to order the inventory (Article 838 of the Code of Civil Procedure) was submitted on time. Thus, the loss does not occur if a timely application preceded, but the decision was issued or the inventory conducted by the notary (Articles 839 et seq. of the Code of Civil Procedure) was completed late. If the heir delayed in submitting the application but submitted it on time, they do not lose the benefit, but may be liable according to Article 1907 of the Civil Code. [...]". Similar decisions include decision no. 44/2017 of the Magistrate's Court of Lamia and decision no. 117/2017 of the Magistrate's Court of Rhodes. Finally, it should be noted that in the case of an untimely inventory by the heir, the latter will not only lose the benefit and will be retrospectively considered a simple heir but will also be liable for compensating the damage suffered by the inheritance creditors (Article 1907 of the Civil Code).

5. In Conclusion

In conclusion, the institution of accepting inheritance with the benefit of inventory provides a significant tool for the heir, as the latter, provided they comply with the legal requirements, has the ability to prevent the confusion of personal and inheritance property and limit their liability to the assets of the inheritance. Consequently, this legislative choice achieves, on the one hand, the encouragement of heirs to accept inheritances rather than renounce them and, on the other hand, the protection of the interests of both personal and inheritance creditors.