Inheritance and Change
What happens when a person dies?
When a person dies, a death estate occurs. It may consist of the deceased’s spouse, child, grandson and other relatives as well as heirs of wills. It is these individuals who must take care of the deceased’s belongings and provide an assessment of the assets, pay any debts of the deceased and create a proclamation, prepare the opening status and settlement, and ensure that the change is carried out. There’s a lot to think about.
Once in a while, none of the heirs has the opportunity, knowledge or energy to take care of all that is practical. In addition, one can be nervous about creating a big disagreement between the heirs when the inheritance is to be distributed and the estate is liquidated.
The following is a brief review of the most important laws and regulations in connection with changing a death estate.
The first time after the death
All deaths must be reported to the parish priest at the place of residence of the deceased, and no funeral can take place until notification has been made. Reporting deaths is the responsibility of the closest relatives. In practice, the notification is almost always carried out by the officer to whom the deceased’s relatives have approached.
Invitation to the
Probate Court The Probate Court invites the relatives as soon as possible to a meeting where the decision is made on how the estate is to be treated. Although the Probate Court guides the survivors, it is appropriate that the survivors have made clear beforehand what the possibilities are.
WHO’s in charge?
Until a decision is made on how the estate is to be treated, it is the district court that decides on the estate’s values. The heirs must therefore not dispose of the deceased’s contents or withdraw money from the deceased’s bank accounts. It is therefore important to clarify as quickly as possible the heirs between how the estate should be changed.
First meeting The
first meeting of the Probate Court (often by telephone) is usually convened only by the person (s) who are listed as the closest relative in the notification of the death. It is then up to the person concerned to summon other heirs. At the district court meeting, it must be clarified, among other things, who are the heirs and what the financial situation of the deceased looks like.
If, after the death, the heirs have contacted a lawyer, the meeting in the district court will lapse.
What about the debts of the deceased?
Except when the estate ends with living expenses (funeral expenses – leaves no expense) the heirs are always liable for the debts of the deceased. However, in all other forms of change, a proclamation must be inserted in the Official Journal. After the announcement in Statstidende, creditors have an 8-week deadline to report claims in the estate.
If it turns out that the debt exceeds the assets, the heirs can “back out”, after which the debt liability lapses.
The deceased’s spouse is an heir. The spouse inherits ½ of the deceased’s estate. If in a marriage there is a common property community, that is, not a separate property, the spouse receives a total of ¾ in inheritance and so-called residence (the spouse’s half of the joint estate).
The registered partners inherit the same rules that apply to spouses.
b. Children of the deceased:
These inherit equally, whether they are joint children or children from a previous relationship. If one of the children has passed away at death, then the child in question will replace the deceased.
c. Parents of the deceased:
The deceased’s parents only inherit if the deceased does not leave a spouse, children or grandchildren. If one of the parents has passed away at death before the deceased (heir), the child of that parent inherits, that is, typically the siblings of the deceased, respectively siblings (nephews and nieces).
d. Grandparents (Uncles and Aunts):
These will inherit only if the deceased does not leave either spouse, children, grandchildren, parents, siblings or siblings. Is one of the grandparents or possibly both passed away at death before the deceased, as heirs of the deceased are tenants, aunts, uncles and uncles. Cousins and cousins do not inherit .
e. Cohabiting partners:
These do not inherit, notwithstanding the duration of cohabitation, and whether cohabiting children are cohabiting or not, unless wills have been created.
Cohabitants shall be regarded under certain conditions as a beneficiary of the deceased’s insurance and retirement savings – see section 5.
f. Adopted children:
Adoptions before 1972:
Crucial for hereditary position is what it says in the decree on adoption, since before 1972 and regularly been change of rules. For pre-1972 adoptions, it is recommended to seek professional help from a lawyer.
Adoptions since 1972:
Adoptive children, adopted from October 1, 1972 onwards, are equated in every respect with their own children.
g. Children born out of wedlock:
These children inherit on par with children born in marriage, and thus inherit both parents.
However, for children born out of wedlock before January 1, 1938, the main rule is that the child does not inherit his father or his family, but the mother and the mother’s lineage.
Inheritance to inheritance : The deceased may have by means of a testament, for example, a cohabitant, or others, just as the deceased may have changed the inheritance fractions and also decided on the division of contents etc.
How is the estate treated?
The unchanged estates:
Not all estates must be changed. For approx. half of all estates are not changed, as these estates can either be terminated by a so-called settlement
(burial expenses), spouse expenses or unchanged estates .
a. The building allowance (Funeral expenses – “Leaving nothing” the expense):
If the estate has no net assets beyond DKK 45,000 (2019) DKK 46,000 in 2020 after the funeral, including grave site maintenance, the
estate’s treatment and debt secured by mortgage or similar, paid, a change should not be made.
Instead, the estate must end with the so-called settlement. This means that the person who covers the expenses of the funeral and clears
the home of the deceased gets all the assets of the deceased.
The settlement is for the typically deceased’s closest survivor.
This does not have to be the family, as the district court, in assessing who is entitled to the building allowance, emphasizes who
was closest to the deceased socially.
Settlements can also be made to the institution to which the deceased has been associated, or possibly. to the municipality, if the municipality is
to pay for the funeral.
The beneficiaries do not have to pay the estate tax (inheritance tax).
b. The spouse’s allowance: The
spouse’s allowance applies, as the name implies, to spouses, registered partners, and to cohabitants who have created the so-called
extended cohabiting wills.
Only the abovementioned circle of persons is entitled to the so-called spouse outlay.
If the value of the deceased’s net worth, combined with the spouse’s net worth does not exceed DKK 780,000 in 2019 and 790,000 in
2020, the spouse may be transferred to the estate without change. Any other heirs will receive nothing. The amount is adjusted according to the net price index.
The calculation of the spouse’s allowance includes the value of the insurance / pension schemes paid to the survivor on the occasion of the death of the first-born.
The spouse / registered partner is not required to pay any living expenses, nor any insurance and pension savings payable on the occasion of the death. Cohabitants who have created extended cohabitation will have to pay the living expenses of such insurance and pension savings.
c. Unchanged estate:
The surviving spouse can – if the estate is solvent – that is, the value of assets exceeds the value of liabilities – take over the joint estate for the purpose of unchanged housing with joint children. A change is then not necessary, and the spouse merely enters into the deceased’s assets and liabilities.
If the deceased leaves special children, they must give consent if the survivor wishes to leave in unchanged living.
With utterly peculiar ownership no provision can be made in unchanged living.
No estate tax (inheritance tax) is payable.
No provision should be made in the unaltered estate without having been examined whether the estate may have. can be interpreted in accordance with the rules on spousal expenses, as this is preferable, and should not be left in the unaltered estate, before it is calculated what a change will involve payment to the children.
In this connection, it is noted that there are a number of disadvantages of intentionally living in unmarried housing, including that the testamentary competence is reduced by half, that the survivor’s life is not completely free and further that, if the longest-living spouse wants to remarry , must be changed with the children.
In any case, it should be considered that you seek legal assistance from a lawyer for advice before making a decision to change your estate.
The switched estates:
There are 3 different ways to change, namely the so-called simplified private change, the actual private change and treatment by the trustee.
If the estate is solvent and is at least one of the heirs of the estate and solvent, the estate meets the conditions for private change.
d. Private Switch:
By private change, the heirs are in charge of the change. In other words, the heirs must prepare the relevant statements for the tax authorities and the law of change, including taking care of the assets to be disposed of / inherited, for example car and real estate.
The heirs can choose to do this themselves, and it will then be practical for the heirs to give a proxy to one of the heirs, who then has the responsibility and work to have the estate processed.
The heirs can also assume a lawyer, and the heirs must then issue a proxy to the lawyer. If necessary, the meeting in the district court lapses.
The heirs, regardless of whether they have assumed a lawyer to be responsible for the change, retain the right of determination under the change.
Within 6 months of the death, an opening status must be prepared for the district court.
Furthermore, – at least one year after the death – a living statement must be filed showing what the deceased left as of the date of death, what has been used by funds in the estate for, for example, grave site maintenance, selling costs, property, attorneys’ costs etc., and what is retained on the cutting day chosen in the estate statement.
Of the amount thus obtained, the estate tax must be calculated and the inheritance distributed.
It is recommended that before deciding that one of the heirs is to conduct the private transfer, that legal aid is sought to clarify whether a private transfer made by the heirs is advisable.
There may be serious tax problems and there may be a significant risk of overpaying the estate tax (inheritance tax) as well as any tax, including especially property tax.
e. Simplified private transfer:
The simplified private transfer is in fact identical to an actual private transfer, except that the heirs do not have to file a settlement with the transfer court.
The condition for simplified private change is that no estate tax is payable in the estate.
Also with the simplified private shifts, especially when there is a real estate in the estate, there is the possibility of making serious mistakes that can have a significant negative tax effect.
In these cases, too, it is recommended to seek legal advice.
f. Treatment by trustee:
If an estate is insolvent, ie liabilities exceed assets, the estate must be subject to treatment by the trustee.
If the heirs cannot agree on a private change, the estate must be subject to trustee treatment.
If none of the heirs is of legal age, the estate must be subjected to trustee treatment.
If the deceased has by appointment a trustee / executor, the estate must, as a rule, be treated by this deceased trustee / executor.
It is the trustee who treats the estate, ie prepares the relevant statements, etc. Typically, the trustee will summon the heirs to a residence meeting where the estate’s detailed treatment is discussed.
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