Thanks to the keywords used by internet search engines, I have noticed a notable interest in the subject of renunciations of legitimate inheritance and more specifically renunciation during life. The reasons may be very varied, and in the cases we have found, even legitimate, but the truth is that the law does not solve, unfortunately, the problems of all families, as a consequence of certain limitations on renunciation agreements.
I am going to address this issue, focusing, as is usual in the field of Catalan law, and making a brief fiscal note, which I believe may be highly recommended.
In this entrance From my website, the second most visited on the blog, which at the time of writing these lines is around 70,000 visits, I developed the general outline of the legitimate ones in Catalonia.
The waiver of the legitimate share must be considered from two temporal points of view, before or after the death of the person who generates the right to collect it.
to.- RESIGNATION AFTER THE DEATH .
Once a person has died, those who have the right to a legitimate inheritance (remember that these are exclusively the children, in their absence the other descendants, and in the absence of the two previous ones the parents) can renounce it, without any type of limitation and without incurring, in principle, any fiscal cost.
This type of renunciation is relatively frequent in the case of marriages, in which the spouses name each other as heirs, and in the absence of both, the children are named as heirs in equal parts.
It is the typical Catalan testament of “a little bit more”, which is specified in a clause of the following type
“She appoints her husband as heir, commonly replaced by her children, and they by their respective descendants by lineage.”
Well, since the children are supposed to end up receiving the entire estate of both parents, upon the death of the first, they usually let the widow or widower be awarded the entire inheritance, expressly or tacitly renouncing (by way of non-claim9) the legitimate inheritance of the father or mother who died first.
b.- RESIGNATION DURING LIFE (BEFORE DEATH).
The general rule in this matter is that early renunciation of the legitimate inheritance is not possible.
According to article 451-26 CCCat: “1. Unilateral acts, stipulations in a succession agreement and transaction contracts or any other type of contracts granted before the death of the deceased that imply a waiver of the right of inheritance or that prejudice its content are void.”
However, this rule has three exceptions:
a.- The mutual waiver agreement between spouses, as stated in article 451-26 a) CCCat, is valid:
1.- The agreement between spouses or cohabitants in a stable relationship by virtue of which they renounce the legitimate share that could correspond to them in the succession of their common children (…)
That is to say, first of all, an unconditional waiver is allowed between spouses or members of stable couples, whereby they renounce the legitimate share that might correspond to them in common children, all in line with the limitation of the legitimate share of the parents existing in Catalan law.
A mere pact that said more or less the following would suffice:
” ** and ** agree in accordance with the provisions of article 451-26.2 a) CCCat who renounce the legitimate rights that could correspond to them in the succession of their common children.”
In reality, parents do not usually leave inheritances to their children, or at least statistically, this is an unusual situation, which is why it is an agreement that is often used in practice, but which may have a certain sense, for example, and without being exhaustive, in the case of a marital crisis of the parents.
2.- (…) and, especially, the survival pact in which the survivor renounces what could correspond to him in the intestate succession of the deceased immature child.
And secondly, it is also accepted that within a survival agreement (that is, one by virtue of which it is agreed that in the case of property acquired jointly and in equal parts, by spouses subject to the regime of separation of property, or stable couples) the spouses may renounce the intestate succession of the child who died before reaching the age of 14.
A mere pact that said more or less the following would suffice:
"** and ** agree in accordance with the provisions of article 451-26.2 a) CCCat that they renounce any rights that may correspond to them in the intestate inheritance of their common children under the age of 18."
The scope of this waiver is much broader than the previous one, as it covers the right to intestate succession. That is, the parents agree that if a child dies before reaching the age of 14 (and therefore without being able to make a will due to lack of capacity) the assets of this child will not go to any renouncing spouse.
This is altering the regime of intestate succession, since a minor under 14 years of age, presumably not having descendants or a spouse, his or her assets would go to his or her parents in equal parts, but with this agreement the call to the parents would be skipped, and the assets would go to the closest relatives by way of intestate succession.
b- The agreement of the parents' renunciation to the legitimate inheritance of the children, since according to the article 451-26 b) CCCat is valid:
The agreement between children and parents by which the latter renounce the legitimate share that could correspond to them in the inheritance of the predeceased child.
This agreement has a different scope from the previous ones, with the purpose of excluding the legitimate rights of the parents.
A mere agreement that said more or less the following would suffice, with the intervention of the son:
” ** and ** agree in accordance with the provisions of article 451-26.2 b) CCCat that they renounce the legitimate share that may correspond to them as a consequence of the premature death of their son * “
c- The agreement of renunciation of the descendants to the receipt of property from their ancestors, since according to the Article 451-26.c) CCCat is also valid :
The agreement between ascendants and descendants stipulated in a succession agreement or donation by which the descendant who receives property or money from his ancestor in payment of future legitimate inheritance waives the possible supplement.
This third form of renunciation is, in my opinion, the most interesting, and it is rarely used in practice, even though it is a very effective way of planning succession. Let us take the example of a father with two sons, who has a business, which he intends to keep for only one of them, since he is the one who is linked to the business, while the other brother develops a professional career in another field. If this agreement is not made, the legitimate shares would be calculated on the value of the father's assets at the time of death, and very probably the son who has worked with him has had a decisive influence on this increase. With this agreement, the son who has not worked is prevented from profiting from the brother's work.
The requirements of this pact are:
a.- There must be a donation from the father to a son or descendant.
b.- The donation must be made in goods or money.
c.- The donation must be made as a legitimate inheritance and with the son or descendant waiving any possible supplement.
That is, through this agreement it is agreed that the legitimate shares will be calculated at the time of the donation and not at the time of the father's death.
Therefore, section 3 of this article 451-26. CCCat tells us that this waiver only may be rescinded due to injury to more than half of the fair value of the legitimate share, Considering the amount that the legitimate share of the renouncer would have on the date on which it was made.
The action may be exercised within a period of four years from the granting of the agreement.
d) The agreement of the descendants' renunciation to the receipt of property from their ancestors, and the Supreme Court ruling of February 9, 2016.
The Supreme Court ruling of February 9, 2016, about which you can find more information in this entrance from the blog www.notariabierta, I think it can be a way to relaunch these waiver agreements. The sentence is pronounced on the separation agreement in the law of Galicia, which is the one by which Whoever has the status of legitimate heir if the succession were opened at the time the agreement is formalized is irrevocably excluded, for himself and his lineage, from the status of forced heir in the inheritance of the separator, in exchange for the specific assets that are awarded to him.
We see that the nature of this covenant is very similar to the agreement of renunciation by descendants to the receipt of property from their ancestors, as referred to in article 451-26.c) CCCat.
According to the cited ruling, it could be argued that the donor, by making a donation to a descendant with waiver of the supplement, does not have a capital gain, so that the donation would be exempt from paying capital gains tax in personal income tax, as is the general rule, as you can see in this entrance of the blog, by the way the one that receives the most visits, which at the time of writing these lines is around 130,000.
In Lleida on September 28, 2016.
