OGH on asset sacrifice and usufructuary rights (ErbRÄG 2015)

Aug 18, 2021 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, OGH) dealt with the question whether a right of usufruct reserved in the course of a gift prevents the provision of a property sacrifice even under the new legal situation following the Inheritance Law Amendment Act 2015 (Erbrechtsänderungsgesetz 2015, ErbRÄG 2015).

In the original case, the plaintiff (daughter of the deceased) demanded payment of the compulsory portion from the heir (her brother). The proceedings centered on shares in real estate which had been gifted to the defendant by the deceased approximately 7 years before his death. In the deed of gift, a lifelong usufructuary right to the gifted property as well as a prohibition of encumbrance and sale in favor of the deceased and his widow were agreed upon.

Among other things, the OGH had to decide on the point in time at which this gift must be valued. Pursuant to Sec. 788 of the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB), gifts are to be valued at the time at which they were "actually made". However, there is no explicit regulation as to when a gift was "actually made", i.e. when the asset sacrifice was made. 

In this regard, the OGH now ruled that under the new legal situation, a right of usufruct reserved by the testator for himself does not (or no longer) prevent the asset sacrifice from being made:

According to the text of the ErbRÄG 2015, the sacrifice of assets is only excluded if the donor is in a position to repurchase the donated item (e.g. in the case of a reservation of revocation or an offer of return by the donee). If a "mere" right of use is reserved, this shall not prevent the sacrifice of assets.

While the case law in the previous legal situation was based (only) on the retention of a right of usufruct, which thus prevented the sacrifice of assets and the gift was valued at the time of death, this no longer applies in the new legal situation. Whereas in the ministerial draft of the ErbRÄG 2015, the retention of a (non-specified) right of use was supposed to prevent the sacrifice of assets, this restriction was dropped in the government bill.

It follows that the retention of a right of use (of whatever kind) is no longer considered decisive for the asset sacrifice. The donation of the property is therefore to be valued at the time of receipt of the land register application and not at the time of death.

OGH 2 Ob 119/20v (24.06.2021)