Inheritance when the deceased had debts: when it is advisable to accept under benefit of inventory

Accepting an inheritance under benefit of inventory allows the heir to be exempt from paying the deceased’s debts if these exceed the value to be received.

What is inheriting under benefit of inventory?

Acceptance of an inheritance under benefit of inventory is a right held by all those considered heirs. Specifically, it is regulated in Articles 1015–1024 of the Civil Code and is intended to protect personal assets.

To better understand what it means to accept an inheritance under benefit of inventory, we would like to remind you that, in Spain, heirs can make three decisions regarding it:

• Pure and simple acceptance of the inheritance: you take on the inheritance, which means you assume responsibility for both the assets and the obligations, that is, the debts.
• Rejection of the inheritance: unlike the previous case, you repudiate the inheritance in its entirety, so you receive neither the assets nor the obligations.
• Acceptance of the inheritance under benefit of inventory: the heir is liable for the deceased’s debts with the assets of the inheritance that correspond to them, but not with their own personal estate.

For example, if the liabilities of the inheritance exceed the value of its assets, the heir is exempt from covering that difference with their own assets. If the opposite occurs, the debts would be settled with the assets and only the remaining balance would be received.

Imagine you inherit a flat valued at €300,000, but you discover that the deceased had a loan worth €400,000. If you accept the inheritance purely and simply, you would have to pay the remaining €100,000 from your own money.

On the other hand, if that same flat were subject to a loan of €150,000, you would receive the remaining €150,000 after settling the debt through the benefit of inventory arrangement.

How do you apply for benefit of inventory?

The benefit of inventory can be requested by any person considered an heir, whether dealing with a testate or intestate estate. It does not matter whether the other co-heirs make the same decision or not.

If you are interested in doing so, you should know that there are two options available. The first is before a notary by means of a public deed. Without a doubt, this is the quickest and most convenient option, and is usually used when there are no disputes and all heirs agree. However, if such disputes exist or if the inheritance has been challenged, it is necessary to request the benefit of inventory before a judge.

It should be noted that acceptance under benefit of inventory can only be made if the inheritance has not previously been accepted purely and simply, whether expressly or tacitly. For example, if you have moved into or rented out a property that belonged to you, it is understood that you have chosen to accept it and you can no longer rely on this right.

What must the benefit of inventory include?

Each and every asset that makes up the inheritance. This refers to real estate, shares or other inheritable assets, current accounts, etc. In addition, the public deed must be drafted in accordance with both ethical standards and the law.

The reason is simple: if you do not do so, you will lose the benefit of inventory. The law provides for the loss of this right when heirs knowingly omit any asset from the inventory. It also applies when the inventory contains errors that prevent it from complying with legal requirements or is drawn up without having first paid the legatees.

Who can request the benefit of inventory?

Any heir, whether intestate (without a will) or testate (with a will), including legatees if so established in the inheritance. As mentioned above, this is an individual decision, so one heir may choose the benefit of inventory, while the remaining co-heirs accept the inheritance purely and simply or reject it outright.

Advantages and disadvantages of the benefit of inventory

The main advantage of inheriting under benefit of inventory is that you will not risk your own personal assets if the deceased’s debts exceed the value of the inheritance. In other words, you will only be liable for obligations up to the value of the assets you are entitled to.

In addition, this solution provides a high level of legal certainty in the face of future claims and reduces the risk of disputes with creditors or other heirs. While some inheritances are very simple, such as those consisting of a single property and a current account, others are extremely complex. In such cases, this procedure is essential.

However, there are also disadvantages to inheriting under benefit of inventory, as you might expect. These include:

• A longer and more complex process: as it requires listing all the deceased’s assets and debts, which ultimately prolongs the administration of the inheritance. This is especially the case if it is extensive or if the heirs live in different locations.
• Notarial and administrative costs: preparing the inventory and drafting the public deed will involve additional expenses that do not arise when the inheritance is accepted purely and simply. In any case, these costs are usually small if there is a risk of accepting more debts than assets.
• Delay in accessing the assets: when the inventory is requested, the assets cannot be used or sold, which can be a problem for those who need them immediately.

So, what should you do with an inheritance with debts?

In our view, when there are doubts about the scale of the debts in an inheritance, it is always advisable to request the benefit of inventory, as otherwise you may significantly compromise your personal assets. If you believe you are in this situation, contact our lawyers, a specialist inheritance lawyer will advise you on everything you need.