OGH: Division In Kind prior to Inheritance Devolution

Jan 20, 2023 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof) recently dealt with the division of inheritance rights prior to devolution, taking into account previous gifts to heirs by the deceased. 

The plaintiff and the two defendants are the children and legal heirs of the deceased. Declarations of acceptance of inheritance had not yet been signed. The plaintiff requested dissolution of the community of heirs, each with one-third, taking into account previous gifts. The estate essentially consisted of a condominium. The plaintiff intended to prevent the condominium from being auctioned off.

According to the Austrian Supreme Court, this is legal.

Based on established case law, a simple community of heirs is established by law upon the death of the testator. While party status in probate proceedings requires a declaration of acceptance of inheritance, this does not change one's substantive legal position as heir.

The community of heirs can be annulled by an action for partition, but only becomes effective in rem following the devolution of the estate. In principle, one must distinguish between division in kind and division by sale. If the rights of inheritance are divided in kind, this means a division of the rights of inheritance per se in such a way that for each co-heir the rights pertain to certain objects of the estate which are exclusively assigned to each co-heir. The object of the partition is therefore the right pertaining to acquisition of the objects, not the objects themselves.

The division of the right of succession in kind requires, however, that there are sufficient similar and equivalent objects to the exclusive acquisition of which the divided right of succession can refer. Condominium ownership does not fundamentally prevent this.

A set-off of gifts under Section 755 of the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch) is admissible by way of an action for partition, because set-offs do not shift the inheritance quotas, but only the shares of the inheritance, i.e. the extent of the assets to whose exclusive acquisition the right of inheritance pertains.

Insofar as the set-off makes it evident that the defendants will not receive anything more from the estate because they have already been excessively provided for by previous gifts, the plaintiff is to be allocated the right to acquire the entire estate. In this case, it is no longer relevant whether similar property exists. Therefore, dividing the condominium up is no longer necessary.

OGH 2 Ob 113/22i (25.10.2022)