Law of inheritance

Our lawyers are specialised in the law of inheritance, and fulfil expert roles in all matters relating to law of inheritance. We produce deeds of estate inventory, last wills and testaments, and deeds of estate distribution. We also provide assistance in situations involving undistributed estates and individual parties with interests in various law of inheritance contexts, e.g. by acting as assistants / representatives in the distribution of estates of the deceased.

Our lawyers also act as court-assigned administrators and distributors of estates. Each party to an estate has the right to request a court of law to appoint an executor and/or administrator in situations involving disputes, or in otherwise difficult matters involving distribution of estates.

 

General information on the law of inheritance

The law that determines how and to whom the property of the deceased is transferred is called the Inheritance Code.
According to the principal of the Inheritance Code, the property of the deceased is inherited such that if there is no previous group of heirs, then the person or persons in the next-in-line group of heirs stand to inherit the estate. Heirs / inheritors are divided into three classes:

The primary heirs are Direct Heirs, or heirs of the body: the deceased’s children, stepchildren, adopted children, and their offspring;

The secondary heirs are the parents of the deceased, and, if the parents have died before the deceased, their offspring – that is, the secondary heirs are the deceased’s siblings and their offspring;

The last-placed group in the Inheritance Code are the grandparents of the deceased, and, if the grandparents are already dead, their children, i.e. the uncles and aunts of the deceased.

The children of the uncles and aunts of the deceased – i.e. the deceased’s cousins – are not legal heirs of the deceased.

The so-called statutory order of inheritance is overridden if the deceased had left a last will and testament. If the deceased has no surviving direct heirs, he or she may have bequeathed his or her entire estate effectively and in full to the person or persons of his or her own choosing.

Direct heirs are protected by their legal entitlement to a statutory portion of the deceased’s estate. By law, the statutory portion is half of the share of estate. The share of estate is, according to the principal rule, the share of the deceased’s estate per capita. For example, if the deceased was survived by 3 direct heirs, the share of the estate to which each of them is entitled is 1/3, and the statutory portion is therefore 1/6 of the estate. In other words, a last will and testament cannot infringe upon the right of a direct heir to his or her statutory portion. The use of the protection provided by the statutory portion requires, however, that a notification of statutory portion be made. This notification must by law be made within six months of the heir having being informed of the deceased’s passing and of the infringement of the heir’s statutory portion due to the deceased having left a last will and testament.

 

Estate inventories

An estate inventory is an event in which a list is compiled of the deceased’s beneficiaries (heirs) and of the assets and liabilities he or she has left behind. This document is called a deed of estate inventory. By law, the deed of estate inventory must be made within three months of the death. In exceptional cases, it is possible for the Finnish Tax Administration to grant an extension to this period. The extension must be applied for in writing from the tax office of the deceased’s last place of domicile.

It is possible to make a deed of estate inventory also through procedures undertaken between the parties to the estate, and this may not necessarily require external legal assistance. In most situations, however, it is preferable in the legal interests of all concerned for the deed of estate inventory to be drawn up by an external person, someone with specialist legal training. In every situation in which a deed of estate inventory is being made, there must be present, in addition to the parties to the estate, two external persons, called trustees, whose responsibility it is to impartially list and assess the stated items of the property of the deceased for the purposes of creating the deed of estate inventory. In addition to listing the property and the heirs, the deed of estate inventory must also include a statement of the burial and other expenses incurred by and related to the death of the deceased.

A deed of estate inventory does not as such have any actual legal effects, and does not e.g. make it unnecessary to also have a deed of estate distribution; this latter document must be drawn up in the legally required form when an estate of the deceased is being distributed. The primary purpose of a deed of estate inventory is to provide the tax authorities with the necessary information on estate tax-payers and on the taxable amount of an estate  , and to act as the primary inventory of the shares and property for the purposes of distributing the estate.

The deed of estate inventory must be sent to the tax office of the last place of domicile of the deceased, within one month of the deed of estate inventory having been prepared.

 

Administration of estates

After the deed of estate inventory has been prepared, the estate must be administered, i.e. clarified, before it can be distributed. Administration of an estate is the general term referring to the clarification of the assets and debts; before this is done, the estate cannot be distributed. The debts of an estate must always be paid before the estate can be distributed. If the  debts of the deceased are left unpaid, the parties to the estate may become liable for paying the debts of the deceased.

The fundamental rule is that debts are not inherited. If the total amount of debts of the deceased exceeds the assets of the deceased/estate, i.e. if the estate is excessively indebted, then in order to avoid personal liability for debts of the party to an estate from arising, it is always necessary to appoint an administrator of the estate. An administrator is appointed to an estate of the deceased, on the strength of even a single application to this effect from a party to the estate, by the court of the last place of domicile of the deceased. Our lawyers will help you in making an application for the appointment of an administrator to the estate.

In most cases, the administrator is a lawyer. The administrator appointed to an estate must be impartial with respect to that estate – that is, he or she must be an outsider, and cannot have been involved in assisting any party to the estate in any matter related to distribution of the estate. If the estate in question is excessively indebted, then the task of the administrator is to try to persuade all the creditors in question to agree to write off part of the debt; or, failing this, to drive the estate to bankruptcy. The administrator is also liable and responsible on behalf of the estate for matters in which the estate is an interested party. Our lawyers are experienced estate administrators and distributors.

An administrator’s management of the estate displaces the so-called joint administration of the estate by the parties to the estate, and the administrator has the exclusive right to administer the assets of the estate to the parties to the estate. Finding an estate administrator may also be advisable if there is distrust between the parties to the estate, and if they are unable to reach agreement on handling the practical matters relating to the estate. The administrator, in the name of the estate, manages the day-to-day business concerning the estate, such as paying out of the estate the invoices and debts, ensuring that property that is part of the estate is properly stored, and so on.

The estate administrator has the right to be paid for this task, and this compensation must be taken from the estate before it is distributed. A sample application for seeking an administrator and/or executor of an estate can be found e.g. here or here.

 

Distribution of estates

If all the parties to the estate are in unanimous agreement and they are all of full age, then the estate can be distributed by mutual agreement or compromise. In other cases, estate distribution requires the appointment of an executor. The executor is often the same person as the aforementioned estate administrator, but if the estate has already been administered, and if there is no uncertainty in the management of the estate, then it is possible to apply only for an executor. If this option is chosen, then this is a question of distribution of an estate by an executor. As with the administrator, the executor of an estate is also appointed by the court of the last place of domicile of the deceased. The executor who is appointed to an estate must always, first and foremost, aim to create mutual agreement between the parties to the estate, i.e. reconciliation, on the content of the distribution of the estate. If one or more of the parties to an estate are opposed to the proposed solution for distributing the estate, and no mutual agreement is reached, then the executor must divide the estate in accordance with the Inheritance Code as the executor sees fit.
In any such decision on distribution of an estate by an executor, the executor thereby takes a position on e.g. any inheritance advance demands that were made by the parties to the estate. The executor is also responsible, in situations of uncertainty, for interpreting the last will and testament made by the deceased. The executor is paid for his or her work out of the assets of the estate.

In the distribution of an estate, the first task is to specify the relative share of estate of each of the heirs, i.e. to specify what portion of the estate each party to the estate will receive from the besparing (balance) of the estate capital. After this, the denomination in value of the share of estate is determined, i.e. the proportional share of the balance of the estate capital in euros. The task of the executor in this stage is also to carry out the necessary valuation of the property as part of distributing the estate. The final phase is the real-value distribution of the estate; that is, the task of deciding what property of the estate each party to the estate receives. In accordance with the principal rule, each of the parties to the estate has the right to receive a certain proportion of each of the items that are being distributed as part of the estate. In the case of items that cannot be divided, they must be allotted to the share of estate of one of the parties.

Each individual party to an estate always has the right to demand distribution of the estate, and to seek an executor to distribute the estate. Applying for an executor does not rule out the possibility that the parties to the estate can come to mutual agreement on the distribution of the estate in the manner they find suitable, because the executor appointed by a court is always bound by the unanimous agreement of the parties to the estate. By law, the executor must also urge the parties to the estate to reach agreement on how the estate is to be distributed among them. The content of this legal provision just mentioned has been interpreted to mean that the executor’s primary goal must always be to get the parties to the estate to reach agreement on the division of the estate. Often, appointment of an executor is the driving force in getting even strongly disputed parties to an estate, with outside help and in spite of all their grievances against each other, to reach agreement on distribution of the estate.

 

Last will and testament

Our lawyers who specialise in the law of inheritance will help you in all matters related to last wills and testaments.

Some good reasons for making a last will and testament:

• You want to guarantee the financial stability of your spouse or common-law spouse after your death.
• Your family is a so-called patchwork or blended family, possibly with one or both of the spouses or common-law spouses having children from an earlier relationship, and possibly also having had children together.
• You have, together with your spouse or common-law spouse, created a marriage settlement agreement but want to ensure that, if you die before him or her, he or she gets a sufficient share of your estate.
• You want to make sure that, in the event of one of your children (including stepchildren and adopted children) getting divorced, his or her spouse or common-law spouse has no marriage right to inherit any part of your estate.
• Your are childless and/or unmarried, and you do not want your estate to go to distant relatives.
• You want to include persons of your own choice, e.g. godchildren, longtime carers, etc. in the beneficiaries of your estate.
• You want to support one or more charitable causes, etc.

 

By law, the primary heirs are Direct Heirs, or heirs of the body: the deceased’s children, stepchildren, adopted children, and their offspring. If the deceased is not survived by any direct heirs, the inheritors of the estate will be the parents and their surrogate siblings, or their direct heirs. If the deceased is not survived by parents or their surrogate siblings or their direct heirs, the inheritors of the estate will be their children, i.e. the aunts or uncles of the deceased.
If the deceased was married at the time of death and has left no direct heirs, the estate is inherited by the surviving spouse or common-law spouse.
If none of the aforementioned legal heirs exist, or if the deceased has not left a last will and testament, then the estate goes to the State of Finland.

Most of us accept the right of inheritance of children or of a spouse or common-law spouse, but there are wide differences of opinion when it comes to the rights of inheritance of more distant relatives. A last will and testament is the only way of influencing how your property will be divided after your death, particularly if you have no direct heirs. A last will and testament is also a way of providing instructions for the distribution of your estate when, as is usually the case, there is more than one heir. To the extent that a last will and testament does not infringe upon the legal rights of heirs, then the instructions for the distribution of an estate must be followed in the distribution of an estate.

It’s essential to keep in mind that no other types of position on the distribution of an estate – such as oral agreements, statements, or opinions, or hearsay – have any legal standing in relation to the estate, and as such cannot be taken into consideration in dividing and distributing the estate. By law, any agreement on the distribution of the estate of a living person is null and void.

In the distribution of an estate, a testamentary provision has the legal power to displace all legal beneficiaries of an estate except the direct heirs to that estate. A last will and testament can be used to ensure, for instance, that the property of the deceased goes in full to a sister of the deceased, rather than to the deceased’s surviving common-law spouse or to the latter’s children; in this example, if no last will and testament had been left then the sister would have inherited no part of the estate.
A last will and testament can also be used to partly “displace” the children of the deceased from inheritance of the estate, to the extent that they are not protected by the legal right to a statutory portion of the estate. A statutory portion is in principle half of the estate, i.e. the deceased can, irrespective of any legal protection of a statutory portion, decree that the other half of his or her estate goes to any beneficiary whomsoever or whatsoever that the deceased named in the last will and testament. Within the legal bounds of the legal protection of the statutory portion it is also legally possible for the deceased to have specified in his or her last will and testament the proportions in which his or her children will stand to benefit from the estate. One important element that the deceased can have either confirmed or reversed in his or her last will and testament is the nature of any inheritance advance accorded to his or her children in gifts. Gifts to one’s children are in principle treated as advance inheritance, unless in giving the gift the to-be-deceased had determined otherwise, or if due to circumstances it can be decided otherwise.

 

Safeguarding a widower’s position with a last will and testament

The commonest reasons for making a last will and testament is to safeguard the position of one’s spouse or common-law spouse in the event that he or she becomes widowed. Very often, a person making a last will and testament wants his or her spouse or common-law spouse to get full ownership or at least possession of their “shared” property for the length of the widower-to-be’s life. Without a usufruct legacy, the widower has an absolute right, regardless of any distribution claims made by any other party, to maintain ownership or possession only of the couple’s shared home.

 

The form of a last will and testament

The formal requirements of a last will and testament are precisely determined by law. If the last will and testament has not been made in a legally specified form, then any party who has a claim on any part of the estate of the deceased has the right to have the last will and testament declared null and void. The formal requirements of a last will and testament are the assurance provided by the lawmakers that it will at any later stage be possible to ensure, to the fullest extent possible, that the last will that the person expressed before his or her death is honoured.
Except in the case of a so-called holograph or nuncupative will, a last will and testament must be made in writing. The last will and testament must contain the explicit statement that the document is the last will and testament of the person who made it. The last will and testament must be signed by the person making it, in his or her own hand, and two people must be simultaneously present as witnesses to the signing.
To ensure correct form, it is recommended that the services of a lawyer be used in making a last will and testament, especially if the estate is of any significant financial value.

 

The executor of a last will and testament

The person making the last will and testament has the right to appoint an executor. Usually, the lawyer who drew up the last will and testament is appointed as the executor, or some other person who has detailed knowledge of how the person making the will had wanted his or her testamentary provision to be carried out in practice.

In other words, it is the executor who puts the last will and testament into effect, i.e. who takes the practical measures to ensure that the last will of the person who is now deceased is upheld. In conjunction with preparing a last will and testament, our lawyers will also prepare a memorandum that will be used as an aid for recording the wishes of the person making the will as to how his or her estate is to be distributed after death.
The executor provides copies of the last will and testament to the legal heirs for reference. Because the legal mandate of an executor is by law in practice the same as that of an administrator, both (unless they are the same person) have the right, if asked to do so by the parties to the estate, to divide and distribute the executor in line with the last will and testament. The responsibility of the executor of the estate is also, if necessary, to make arrangements to have a deed of estate inventory made.

The appointment of an executor of the estate is a means of ensuring that the last will of the person making the will is honoured in precisely the way he or she had intended. As part of preparing a last will and testament, our lawyers also ensure that the original document that constitutes the last will and testament is kept in a safe deposit box on our premises. Because only the original document that constitutes the last will and testament is considered a legally valid document, it is safer if the person making the last will and testament only has a copy of it, and not the original. Authorised copies of the last will and testament contain the contact details of our office, and also contain the statement that the original document is stored on our premises for safe keeping. There is no additional charge for keeping the original document on our premises.
A last will and testament can be amended or cancelled at any time while the person who made it is still alive.

Disclaimer: These pages are intended for the purposes of notification only. The information provided in them does not constitute advice of a legal or any other kind, and is not to be construed as such. We take no responsibility for any measures or decisions that are or might be taken or made based on the information provided in these pages. We point out also that lawyers are under no responsibility in the absence of a commission agreement.