Anticipated inheritance is a benefit given to the heir during the lifetime of the testator. It can be given totally for free or only for little compensation and it will be taken into account after the death of the testator when calculating the inheritance shares of the heirs.
Anticipated inheritance is thus a gift or gift-like sale to the heir from the testator during his lifetime and its value will be added to the total of the estate.
It is not a matter of actual returning of the assets to the estate, but only a computational increase of its value. The advance inheritance can be taken into account only on demand of the heirs.
I do not think I have had an advance – what do I do?
If someone makes a claim, the burden of proof that the gift shall not be considered as anticipated inheritance is on the receiver of the gift.
In other words, the recipient of the gift has to show that it was not advance payment of an inheritance, but a mere gift. Otherwise in the distribution of inheritance the distributor counts the amount of the gift to his share.
For example, if a donor has explicitly stated in a deed of gift that it is not anticipated inheritance, it is strong evidence. In that case, the gift will not be taken into account when the inheritance is distributed. Usual and ordinary gifts will not be regarded as anticipated inheritance.
Activity is important in taking advance inheritances into account
The anticipated inheritance will be taken into account only in favor of that heir who is claiming for it.
In the case-law, it was not possible to contest the inheritance decision because the claim about anticipated inheritance was made only after concluding the distribution (when none of the parties was under guardianship) (Vaasan HO 1995:12).
Thus, if the heir does not make his claim in time, he may lose his right to invoke the anticipated inheritance to be taken into account. This claim must be made at the latest in the distribution of inheritance.
Advance Heritage Presumption
What a deceased has given to the heir during lifetime, will be deducted from the share of that particular heir, if not otherwise prescribed or presumed from the circumstances.
What comes to inheritance taxation, however, a gift that has been given to the only heir has not been regarded as an anticipated inheritance.
Likewise, a gift which has been given to all heirs will not be considered advance inheritance. This is because such a gift does not affect the outcome of the distribution of inheritance.
The Impact of anticipated inheritance
The gift should be valuated to the value of the time of donation, if not otherwise stated. The valuation date may be another one only if the valuation to the date of donating would result in an unreasonable outcome.
If the inheritance share will fall short in spite of the anticipated inheritance, that heir gets supplement in the distribution of the heritage.
Article is written by lawyer Daniéla Jarva.