It is becoming more usual for people to reject inheritance when it contains debts that outweigh the benefits.

The Consejo General del Notariado considers that there are two fundamental causes for an increase in the number of people rejecting an inheritance left to them during 2021:

A) There has been an increase in the death rate across the country owing to the pandemic.

B) The long reach of the 2008 economic crisis which blended in with the economic blow caused by the health crisis.

Furthermore, not even the change to tax inheritance laws brought in by the Junta de Andalucía seems to have changed this tendency.

According to official statistics for the first nine months of last year (the last quarter is still being compiled) some 7,302 people within Andalucía have rejected an inheritance. As there are no separate figures for each province, basing calculations purely on the population, they indicate just under 800 correspond to Granada, or put another way over two per day.

Before this double, economic blow (2008 & 2020) it was rare that an elderly person would die leaving debts; now it is much more common. It was, after all, this generation of the grandparents that came to the rescue of their children and grandchildren during the economic crisis, with many taking out loans on their properties to help out.

In other words, the 2008 economic crisis swept many elderly couples into debt to save their kids only for health crisis, a mere twelve years later, to take their lives before they could recover from this financial exertion.

So the elevated number of deaths amongst the ranks of the elderly caused by the pandemic, just as a purely mathematical consideration, is going to push up the ‘poisoned chalices’ of inherited debt.

However, there is another path for an heir to take and that is Benefit of Inventory. This is “the privilege which the heir obtains of being liable for the charges and debts of the succession, only to the value of the effects of the succession, in causing an inventory of these effects within the time and manner proscribed by law.”· Or put more simply, the debts within the inheritance can only be charged against the value of the inheritance, leaving the inheritors’ personal estate intact. However, there is a time limit involved within which you must choose this option.

It sounds a bit like personal responsibility behind having a limited company.

Editorial comment: there are at least two readers who are experts in this field; perhaps they would like to comment and correct us where necessary? 

(News: Andalucia)