Proposal for a new bill of heritage
Attorney-at-law Axel M. Hansson
Attorney-at-law Ida C. Stavnes
Proposal for a new bill to the Heritage Act of 1972 was submitted on February 10 2014. The proposal contains partly major changes for spouses, unmarried partners and children (direct descendants). The most comprehensive changes include increased spousal portion of the estate, equality for spouses and unmarried partners and different calculation of the indefeasible share of the estate for the direct descendants.
The legislative objective is to provide temporal and balanced solutions and to provide legal rules that create predictability and that reduce conflicts. The intent to ensure equality between spouses and unmarried partners is especially prominent.
Unmarried partner’s right of inheritance
Under the current law, only unmarried partners who have, has had or who expects children together is given a limited legal right of inheritance. Unmarried partners are in these cases entitled to a portion of the estate equivalent of 4 times the base rate at the time of the death, regardless of the other heirs to the estate. (The base rate per 01.05.2014 is NOK 88,370.)
Under some conditions unmarried partners also enjoy the right to take over an undivided estate.
The proposal entails that today’s definition of those unmarried partners entitled to succeed the deceaced is expanded in a way that also includes those who have been unmarried partners for more than 5 consecutive years, but without joint children. The proposal further involves that all unmarried partners who are entitled to succeed are given equal rights of heritage as spouses.
Increased spousal portion of the estate
Under the current law spouses are entitled to 1/4 of the estate, but at least 4 times the base rate if the deceaced survived children and 6 times the base rate if there are no children. The law commitee propose that the spousal/unmarried partner’s portion is increased from 1/4 to 1/2 of the estate. In the event that the deceaced didn’t have children, the spouse/ unmarried partner inherits the entire estate. The minimum portion is proposed increased to 6 times the base rate, and that this is accrued the spouse/ unmarried partner regardless of the other heirs.
Unmarried partner’s right to take over an undivided estate
The right to take over an undivided estate has traditionally been reserved for those situations where the surviving party and the deceaced have children together. Under the current law unmarried partners have a limited right to take over an undivided estate.
Undivided estate means that the surviving spouse can take over the marital property undivided and has right of disposition with certain restricions. The surviving spouse or unmarried partner is for instance prohibited by law from disposing over the separate property of the deceaced and there are certain limitations in terms of giving gifts and advance on future inheritage. In some cases, special consent from the direct descendants are also required to excercise the right to take over an undivided estate. This applies especially to the separate property belonging to the deceaced and when the right to take over the estate isn’t regulated in a marital agreement. Forthermore, in the case that the deceaced has children from a previous marrige or partnership, those children have to give special consent to the takeover of the undivided estate that by law befalls them.
Unmarried partner’s who have, has had or are expecting children together have by today’s legislation a certain right to take over an undivided estate. Unlike spouses the extent of the right to takeover is not linked to the regime of property – either common property or separate property. The extent of the undivided estate for unmarried partners are linked to certain assets; in the case where there are only joint children the surviving unmarried partner has the right to take over the family home, car and vacation home if it has been of joint use to the partners. If there are children from a previous relationship, they have to give the same special consent as applicable to spouses. Assets that the surviving unmarried partner becomes the owner of while maintaining the takeover of the estate after the deceaced, are automatically included in the estate.
The law commitee proposes that unmarried partner’s are given equal rights as spouses in regards of the right to take over an undivided estate. In addition to unmarried partner’s who has, has had or are expecting joint children with the deceaced, unmarried partners who have been partners for more than five consecutive years will enjoy the same right. The rules for special consent are unanmended.
The undivided estate contains both the deceaced’s and the survivor’s combined assets. This may be limited by the surviving spouse’s or partner’s right to take over an undivided estate. If the surviving spouse or partner by will, special provisions by the deceaced or by special consent from the heirs excercises his or her right to take over an undivided estate, including the separate property of the deceaced, his’ or her’s separate property is also transferrred into the estate (unless otherwise is regulated by marital agreement, will, agreement with the other heirs or separate property is determined by the giver/ testamentee).
Changes to the indefeasible share of the estate accrued to the direct descendants
In the law of heritage it’s common to separate the terms distribution of the estate under the rule of law (in the absence of a will), and the indefeasible share, which is the part of the estate that is reserved for the deceaced’s children and that the deceaced may not distribute in a will. The rule of law applies both in the lack of a will or if there exists an invalid will.
Under the current rule of law the children inherit the entire estate, except the minimum heritage portion reserved for the surviving spouse or married partner.
It is however quite common to write a will, in which case the rules of the indefeasible share applies. Under the existing law each child of the deceaced is entitled to 2/3 of the estate, however limited to NOK 1 000 000 per child. The law committee proposes the indefeasible share decreased to 1/2 of the estate, simultaneously as the amount limitation is incresed from NOK 1 000 000 to 40 times the base rate. The reduction of the indefeasible share from 2/3 to 1/2 of the estate means that in the case the deceaced survives a spouse or unmarried partner (who is entitled to succeed) the indefeasible share will constitute 1/4 of the estate. This reduction provides the deceaced leeway and freedom to bequeath over a larger amount in the small and medium sized estates.
Under the existing law the indefeasible portion is calculated from the total estate. The proposal from the law committee will introduce a different calculation method; the share will be calculated from each child’s portion of the share allotted to them. If there are only direct descendants in the estate, the calculation method has no impact given that they will share the entire estate’s worth, but the calculation method is of importance if the deceaced survives a spouse or unmarried partner who is entitled to a portion of the estate. In which case the spouse or partner is entitled to 1/2 of the estate and the direct descendants are entitled to the other 1/2. The total indefeasible share will in that case only constitute 1/4 of the estate, and the deceaced can freely bequeath over the remainding 1/4.
To illustrate how some of the proposed changes will work, we can use the following example:
A has two children from a previous relationship; A1 and A2.
A has an unmarried partner; B of 6 years.
A dies and leaves an estate worth NOK 2,000,000.
Under the current law the estate would be distributed like this:
A1 receives NOK 1,000,000
A2 receives NOK 1,000,000
If the proposal is adopted, the estate will be distributed in the following way:
Firstly, B can take over the estate undivided with A1’s and A2’s consent.
If B does not take over the estate undivided, the distribution will be as follows:
B receives NOK 1,000,000 (1/2 of the estate)
A1 receives NOK 500,000 (1/4 of the estate)
A2 receives kr 500,000 (1/4 of the estate)
If the unmarried spouses A and B does not proactively ensure a different distribution through a waiver of inheritance and/ or a will, the estate will be distributed in the aforementioned way.