At the very moment an heir accepts an inheritance, he will be not only inheriting the deceased’s assets but also his liabilities.
Under Maltese law of succession an heir’s right to invoke the Benefit of Inventory when assuming their role as an heir is regarded as inviolable and any testamentary provision that seeks to restrict or deny this right is deemed to be null, void and without effect. Article 877 of Chapter 16 of the Laws of Malta provides for a concept known as the Benefit of Inventory or ‘Il-Benefiċċju tal-Inventarju’.
The concept of Benefit of Inventory involves creating a detailed list of all the assets that the heirs are entitled to receive. When inheriting under this rule, the heirs are only obligated to settle the debts of the estate up to the value of the assets they inherit. Another benefit of Benefit of Inventory is that the heir’s personal assets remain separate from the inherited property. The heir also retains the right to pursue any personal claims they may have against the estate of the deceased.
To accept an inheritance with Benefit of Inventory, an heir must file a note in the registry of the Civil Court (Voluntary Jurisdiction) Upon submitting the said note indicating their intent to accept the inheritance with Benefit of Inventory, the heir must then swear under oath and provide an accurate and honest description of the deceased’s estate.
The inventory must include a comprehensive list of all the estate’s debts and liabilities, as well as detailed descriptions of personal belongings such as clothing, household items, silver and gold objects, jewellery, cash and other moveable assets. The inventory must also reflect the value of such items, any outstanding debts owed to the deceased, any legal claims, and all immoveable property. Collectively, these elements form the complete contents of the said inventory.
This exact point was highlighted in a judgement pronounced by Judge Żammit McKeon who presided over the First Hall Civil Court in the case ‘Cosaitis vs Loporto et’[1] where the court addressed issues surrounding a delayed final deed of sale.
In the aforementioned case, the court upheld that accepting an inheritance with Benefit of Inventory ensures the heir’s personal assets remain separate from the inherited estate.
In the event that multiple heirs are set to inherit, any one of them can request Benefit of Inventory, even if the other co-heirs do not wish for an inventory to be prepared. It is sufficient for just one heir to make the declaration. However, only those who submit the declaration are entitled to benefit from the inventory process.
An heir who is in possession of an estate is required to create an inventory within 3 months from the date of death of the deceased or from when they became aware of the inheritance. If the heir fails to start or complete the inventory within this period, or within any extensions duly granted by the court, they will be considered to have accepted the inheritance without the Benefit of Inventory.
Once the inventory is completed, if the heir has not yet decided whether to accept or reject the inheritance, they are given 40 days from the inventory’s completion to make that decision. If no declaration is made within that period, the heir is presumed to have accepted the inheritance with the Benefit of Inventory.
Minors will not lose the Benefit of Inventory for up to 1 year after they reach the age of majority (18 years). Similarly, individuals who are interdicted will retain the Benefit of Inventory until their interdiction is lifted. During the preparation of the inventory and while considering the decision, the potential heir is not obligated to assume the role of an heir. Instead, they will act as the curator of the estate. Property that cannot be preserved may be sold after authorisation from the court is obtained. The heir shall not by reason of any such procedure be deemed to have accepted the inheritance.
If an heir deliberately excludes property that belongs to the estate when preparing the inventory, they will forfeit the Benefit of Inventory.
You may wish to read: MALTA Succession Law: The Reserved Portion – Is-Sehem Riżervat
For more information or assistance related to Succession law in Malta please contact Dr Robert Tufigno and Dr Delilah Vella.
[1] Case No. 122/2018 JZM, October 29th, 2018.