Inheritance, legacy or a gift after all?
Inheritance
By leaving an inheritance, a deceased person leaves a percentage share of the assets and debts of the community of heirs.
“… Hans receives 20% of the free quota”.
“I appoint Peter … as my sole heir”
Legacy
With a legacy, the beneficiary does not become a member of the community of heirs, but receives a fixed amount of money or certain material assets.
“… receives my watch” or
“… receives a legacy of
EUR 10,000″
Donation
In the case of a gift, the donor gives the recipient money or an object during his or her lifetime without receiving anything in return.
“… Max gives Kurt his stamp collection”
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Explained simply and clearly with examples
Inheritance
When a person dies, they leave behind assets (also referred to collectively as an “inheritance” or “estate”). Such an inheritance can be received as a legal heir or as an heir named in a will. Legal heirs are, for example, the children or spouse of the deceased. Designated heirs are determined by the testator in the will or in an inheritance contract. All heirs become members of the community of heirs and thereby acquire rights and obligations. As an heir, you are entitled to a certain share of the estate, depending on how many other heirs you have to share with. However, you also always assume the debts of the deceased.
Example 1:
Theodor is single and has no children.
He also has a niece, but has little contact with her.
Theodor has supported animal welfare all his life and feels a close bond with animals.
If Theodor did not make any arrangements, his niece would be the only remaining legal heir to his estate.
Theodor therefore decides to settle his estate and leave his assets, including an apartment building in Vienna, to the animal welfare organization of his choice in a will.
He also made the inheritance subject to the condition that the association should ensure that his cat was always well looked after until his death.
Legacy
In the case of a legacy, the legatee does not become part of the community of heirs. The legatee is entitled to a specific item (e.g. a painting) or a specific amount of the estate (e.g. EUR 10,000) from the estate or later from the community of heirs or individual heirs. A legatee is not subrogated to the debts of the testator.
Example 2:
Anton has a daughter and a wife.
As he has supported a children’s charity (non-profit organization) all his life and children are very close to his heart, he would like to take this into account.
He asks lawyer Mag. Müller for advice.
He suggested that he consider the charitable organization through a bequest.
In this way, he can give the charitable organization a certain amount (e.g. EUR 20,000) from his estate.
However, the charitable organization does not receive any inheritance rights, does not assume any of Anton’s debts and cannot become involved in the division of the estate between the daughter and wife. interfere.
The charitable organization is only entitled to receive the EUR 20,000.
This means that Anton can continue to support disadvantaged children after his own death.
Donation
In the case of a gift, the donor leaves an item (including real estate) or money to the donee during their lifetime. A gift agreement is usually concluded for this purpose, in which the parties are listed (depending on the object to be gifted in the form of a notarial deed). A gift also differs from an inheritance in that the recipient is not granted the status of heir. In principle, gifts inter vivos have nothing to do with inheritance. However, they may be taken into account at a later date when determining the compulsory portion and the offsetting.
Example 3:
Ida is widowed and has a wealthy sister.
However, she takes little care of her.
Ida, on the other hand, has been cared for by her neighbor, Charlotte, for many years.
Ida also has a strong connection with the countries of southern Africa: she often traveled to this part of the world with her late husband, a diplomat.
During her lifetime, Ida decided to donate a large part of her fortune to her neighbor Charlotte and to a charitable organization providing development aid for sub-Saharan Africa.
This is done by means of a written deed of gift during her lifetime.
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Frequently asked questions
What is the difference between a legacy and a bequest?
These are synonyms. Legacy and bequest are synonymous and are to be distinguished from the term “testamentary disposition” (will). In the past, the ABGB also used the term “codicil”, which stood for a unilateral testamentary disposition that could be revoked at any time and, unlike a will, did not include the appointment of an heir but merely other dispositions.
What is the difference between heirs and legatees (in the case of an inheritance or legacy)?
The heir becomes a member of the community of heirs. The legatee is not a member of the community of heirs, but merely has a claim for restitution against the community of heirs. The heirs, on the other hand, acquire a variety of rights and obligations. In particular, they also assume the debts of the testator.
What part of the inheritance can I freely dispose of?
The freely disposable portion is determined by deducting all compulsory portion claims from the estate. These vary depending on which heirs are present. If, for example, there is a spouse (statutory inheritance share 1/3, compulsory portion 1/6) and a child (statutory inheritance share 2/3, compulsory portion 1/3), the disposable share is (1 – 1/6 – 1/3 = 1/2). The testator can do what he or she wants with this half. They can, for example, donate it to a trustworthy charitable organization.
Which is more suitable for a donation to a charitable organization: bequest or legacy?
This depends on the individual situation. In principle, a legacy is less burdensome for the parties involved, as there is only a claim to the surrender of an object or a sum. The legatee cannot interfere in the community of heirs and cannot have a say in the probate proceedings. If, on the other hand, you would like to leave a large part of your assets to a charitable organization or even all of your assets to a sole heir, it is better to leave a legacy.
How can I appoint an heir or make a bequest?
This is done by means of a testamentary disposition or an inheritance contract. The respective validity requirements (in particular the form to be observed) must be strictly observed.
How can I prevent my father from giving away his entire estate during his lifetime?
Descendants, spouses and registered partners are entitled to a supplementary compulsory portion. Certain gifts are added and taken into account when determining the compulsory portion and must be repaid by the gift recipients to the reduced compulsory portion heirs in the event of a reduction. If there are several co-heirs, lifetime gifts may also be offset against the inheritance share.