The new Belgian inheritance law: discover the changes

In September 2018 the Belgian inheritance law changed. The new succession law allows more freedom to distribute your inheritance, the rules on gifts have changed, and you can now draw up an inheritance pact.

1. More freedom to distribute your estate under the new Belgian inheritance law

Thanks to the new inheritance law, you can leave a larger part of your inheritance to your de facto partner, a godchild, stepchildren, a charity, etc. Nevertheless, your children will still be entitled to a minimum portion of your estate. This is called the reserve. This reserve is mandatory and unavoidable, unless your children or your longst living partner voluntarily waive their part of the inheritance.

Under the old inheritance law, the reserve depended on the number of children. The more children, the smaller their share of your inheritance - with a minimum of 1/4 remaining for your own disposal. With one child, that child was entitled to half of your estate. Two children each received 1/3. The combined reserve for three children (or more) was ¾ of your estate.

Since September 2018, the reserve is limited to half of the estate, regardless of the number of children. Each child is entitled to an equal share of the reserve. One child is still entitled to half of your estate. For two or more children, each child's share is now smaller than under the old Belgian inheritance law. Two children will now each receive a quarter of your inheritance, three children will each receive a sixth, four children each an eighth, and so on. So if you have two children or more, this new inheritance definition lets you freely dispose of a larger part of your inheritance.

In any event, now is a good time to review your existing marriage contract or will (also known as your testament). You may have decided, for example, that your assets - minus the legal reserve - should go to a charity. If so, you should be aware that your reserve heirs will now receive less under the new law of succession, in certain circumstances, and the charity will get more. However, it might not have been your intention to leave half of your assets to charity. In some cases it will therefore be necessary to draw up a new will.

2. Gifts

The rules dealing with gifts have also changed. These are gifts which are given ‘inter vivos’, i.e. while you are alive. From now on these will be valued at their value on the day of giving, indexed until the date of death.

If you gave all your children the same amount at the same time, nothing changes. The new rules mostly have to do with gifts made at different times and/or for different gifts than money. This rule not only relates to gifts of money, but also to gifts of real estate, for example.

In practice, any gift must therefore be included in the estate as an advance of the inheritance. These gifts must then be taken into account in order to equalise the inheritances of the legal heirs (i.e. so they get equal shares in the so called fictive mass).

As an example: 20 years ago you gave a house to your son, valued at 100,000 euros. Last year you gave a house worth 100,000 euros to your daughter. Although the value at the time of the donation was higher for your daughter (100,000 euros) than for your son (100,000 euros), your son's house will probably be worth much more today. This could result in inequality in the old system.

In order to avoid such situations, the new inheritance law now always takes into account the value of the assets on the day of the gift, indexed until the date of death. However, this new rule does not apply to gifts subject to usufruct. This type of gift is always taken into account at its value on the date of death. 

3. Inheritance pact avoids family disputes

The new inheritance law makes it possible to conclude inheritance pacts. This allows families to agree on how assets will be distributed, before the date of death. The inheritance pact, which defines who is entitled to what, is therefore a useful instrument to avoid family disputes before the death of the testator. It is, of course, still subject to restrictions: your children will continue to be entitled to half of your inheritance, each in an equal part. In order to avoid 'frivolous' decisions and 'pressure from interested parties', you are obliged to draw up an inheritance pact with a notary and a reflection period of at least one month applies.

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