What is a reserved share and to whom is it due?
The concept of a reserved share is quite well-known in Polish society. Many people associate it with the obligation to pay a specific amount of money in case of an inheritance case. However, a reserved portion is a slightly more complicated institution, which is worth getting to know a bit better.
What is a reserved portion?
A reserved portion may be compared to a form of financial compensation paid to members of the deceased’s closest family who did not come into the inheritance. This is most often the case when the testator decides to appoint to the inheritance a person from the extended family or one that does not belong to it at all (e.g. a neighbour or a close friend).
The right to a reserved portion depends mainly on the criterion of family closeness to the testator. According to the provisions of Article 991 of the Civil Code, descendants, spouse and parents of the bequeather who would be called to the inheritance under the act, if the entitled person is permanently incapacitated for work or if the entitled descendants are minors – two thirds of the value of the inheritance share that would fall to them under the statutory inheritance, and in other cases – half of the value of that share (the reserved portion). If a beneficiary has not received the due restitution either in the form of a gift made by the testator, or in the form of an appointment to the inheritance, or in the form of a legacy, he is entitled to claim against the heir for payment of the amount of money needed to cover the restitution or to supplement it.
As the Supreme Court noted in the ruling of 25 June 2020. (file I NSNc 21/20), the institution of a reserved portion of an estate is justified and necessary in order to realise fundamental constitutional values, such as dignity, protection of family and right to inheritance. The principle of a democratic state of law implementing the principles of social justice excludes such shaping of the inheritance order that would deprive members of the testator’s closest family, in particular minor descendants, spouse or parents permanently incapacitated for work of their means of subsistence. From a social and legal point of view, a reserved portion fulfils a key function: the maintenance function, creating an economic basis for the closest members of the family, the related security function, the protective function for the family conceived as a community, the distributive function and the solidarity function. The institution of restitution is rooted both in the constitutional law in question and in the constitutional right to inheritance guaranteed by Articles 21 and 64 of the Constitution. The fundamental constitutional basis for a reserved portion is the norm guaranteeing human dignity (Article 30 of the Constitution of the Republic of Poland). From the guarantee of human dignity stems an absolute prohibition on depriving an individual of a certain minimum sphere of autonomy, including freedom of property coupled with protection of his very existence. This prohibition is always violated in a situation in which a person entitled to a reserved portion of an estate would be deprived of his minimum existence. Obligation resulting from article 30 of the Constitution of the Republic of Poland does not, obviously, go so far as to guarantee the right to acquire certain assets from other persons, but only to ensure that the closest members of the family, especially those to whom the testator owed alimony, were still legally and factually guaranteed a minimum existence.
Who is not entitled to a reserved share?
We already know who exactly is entitled to a reserved portion of the estate – the descendants, spouse and parents of the testator who would be called to the succession by law. This means that the parents’ siblings (uncles and aunts) and their children (cousins) are not entitled to a reserved share. A father-in-law, mother-in-law, son-in-law and daughter-in-law are also not entitled to a reserved share.
How to calculate the reserved amount?
The correct calculation of the amount of the reserved portion of the estate is a very important issue, as it determines exactly how much money the beneficiary may claim. First it is necessary to determine the whole value of the property intended for inheritance. Remember to take into account all the donations made by the testator during his life – this will be explained in more detail later on. Next, we determine the share of the beneficiary as if he had inherited on the basis of the provisions of the law (we assume, for instance, that the deceased has left no will and that only the provisions of the Civil Code come into play). After determining the appropriate share of the inheritance of a person entitled to a reserved share we have to multiply it by 1/2 or by 2/3 (when the entitled person is permanently incapacitated or is a minor descendant of the deceased). The last step is to multiply the obtained share by the value of the estate.
To better illustrate how to correctly calculate the amount of the reserved portion let us use examples:
Jan left an inheritance worth a total of PLN 450,000, which included real estate, a car, jewellery and money in a bank account. The testator was married and had no children, and by a will he appointed his friend Paul to the whole inheritance. In this case John’s wife is entitled to a reserved portion of the estate as, had her husband not left a will, she would have inherited the entire estate. In her case, the reserved portion will be 1/2 of what she would have inherited under normal circumstances, i.e. if she had become an heir. The woman may claim the sum of 225,000 PLN (1/2 x 450,000 PLN = 225,000 PLN).
Jan left behind an inheritance worth a total of 36,500 PLN. He named his son Michał as the sole heir. Jan also had a wife Laura and two daughters – Karolina and Magdalena, but they were not appointed to the inheritance. The women are entitled to a reserved share of Jan’s estate. In the event of a statutory succession, their shares would be 1/4 for each person (1/4 for Laura, 1/4 for Karolina, 1/4 for Magdalena and 1/4 for Michal). Laura is entitled to 1/2 of the reserved portion, whereas Karolina to 2/3, as she was a minor when the inheritance was opened (she is 14 years old). After proper multiplication of shares Laura is entitled to 1/8 of the inheritance value (1/4 x 1/2), Magdalena is entitled to 1/8 of the inheritance value (1/4 x 1/2), Karolina is entitled to 1/6 of the inheritance value (1/4 x 2/3 = 2/12, i.e. 1/6). Laura may demand payment of PLN 4,562.50, Magdalena PLN 4,562.50, and Karolina about PLN 6,083.
What is the substratum of the reserved share?
A substratum is a value of an inherited property, which is important from the point of view of calculating the exact value of a retainer for an entitled person. In fact, it is quite rarely identified with the value of the property left by the deceased. It takes into account the gifts made by the deceased during his or her lifetime, which actually reduce the value of the estate and therefore the value of the reserved portion of the estate.
How to determine the reserved portion of the estate?
The correct determination of the reserved part, i.e. the amount from which the value of the reserved part for a given person is calculated, requires two actions:
- determining the pure value of the inheritance – we count all the property and rights that went into the estate,
- when calculating the reserved portion of an estate, ordinary legacies and instructions are not taken into account; however, donations and legacies made by the testator are added to the estate. When calculating the reserved share, neither minor donations customarily accepted in given relations nor donations made more than ten years prior to the opening of the succession to persons who are not heirs or entitled to the reserved share shall be added to the succession. When calculating the reserved share due to an ascendant, gifts made by the testator at a time when he had no descendants shall not be added to the estate. This shall not, however, apply if the gift was made less than three hundred days before the descendant was born. When calculating the reserved share due to the spouse, gifts made by the testator prior to his marriage shall not be added to the estate.
To better illustrate how to determine the reserved portion of the estate, let us use another example:
Jan intends to claim a reserved portion of the estate of his father Marcin, who appointed his other son Krzysztof to the entire estate. Marcin left behind an estate worth 245 000 PLN and 15 years ago he made a donation to Jan in the amount of 15 000 PLN. The substratum of the retainer will therefore amount to 230,000 PLN (245,000 PLN – 15,000 PLN = 230,000 PLN). The amount of Jan’s retainer will be calculated not on the basis of the amount of PLN 245,000, but on the basis of PLN 230,000.
How to claim the reserved amount?
The right to a reserved portion of money does not automatically pay out the appropriate amount. The beneficiary must apply for it directly to the obligor, who is the heir (both testamentary and statutory). It is up to the beneficiary to decide from which of several heirs he will demand payment of the reserved amount; he may do so from all of them jointly or from persons chosen by him.
The demand for payment of the reserved portion of the estate should start with a discussion with the person obliged to pay – in this respect a written demand for payment may be used. You may write the demand yourself or ask a solicitor or barrister to help you. The summons should specify the amount of any retainer, the date and form in which it is to be paid and a note that failure to comply with the summons may result in the case being taken to court. Naturally, it is also necessary to indicate the sender and the addressee of the summons. The letter should be sent by registered mail or delivered personally against a receipt.
If a request for payment of the reserved amount turns out to be ineffective, i.e. if the obliged person does not want to pay, the only way to obtain the payment is to go to court. To this end a suit for payment of the reserved amount should be filed – the competent court will be the court located according to the testator’s last place of residence, and if his place of residence in Poland cannot be established, before the court of the place where the inherited property or a part thereof is located. If the amount of the reserved part of the estate does not exceed PLN 75,000, the proper court is the district court, and if this amount is higher – the district court.
Statute of limitations on a reserved amount
A reserved portion of an estate is a property claim, which means that after a certain period of time it is subject to a statute of limitations. Pursuant to article 1007 of the Civil Code, claims of a beneficiary for a reserved portion of an estate and claims of heirs for reduction of legacies and instructions become time-barred five years after the will is announced. A claim against a person obliged to supplement the retainer on account of a legacy or a donation received from the testator is time-barred after 5 years from the opening of the inheritance.
A time-barred claim for a reserved share means that the obliged person will not be able to be compelled in any legal way to pay this benefit to the entitled person. The establishment of a court case in the case of a time-barred right to a reserved share will not be of any help at all. In such a situation, payment depends only on the goodwill of the obligee.
Is it possible not to pay the reserved amount?
It is possible to avoid paying the reserved share – this will most often occur when the claim for payment is already time-barred. The obligor may free himself from such an obligation in yet another way – by proving that the person entitled to the reserved portion of the estate should not receive it due to principles of social intercourse. In this respect, the so-called unworthiness of the inheritance may also be invoked – the obligee must prove that the beneficiary should not receive any restitution because it would be against ethical principles or if he has committed a crime or gross negligence towards the testator. In practice, the possibility to free oneself from the obligation to pay an unpreserved reserved portion of the estate is connected with the necessity to prove one’s reasons within the framework of pending court proceedings.
It is also worth noting here that persons disinherited by a testator cannot claim payment of any reserved amount.
- Is a will exempt from a reserved portion of the estate?
A will does not exonerate you from the obligation to pay a reserved portion of your estate. In fact, very often leaving a will means that there is a high probability that you will be obliged to pay a reserved portion of the estate to the deceased’s immediate family members.
- Is it possible to claim a reserved share from a gift?
A reserved share is a form of monetary compensation given to members of the deceased’s immediate family who have not been called to inherit – this means that there is no such thing as a reserved share based on a donation. However, donations made by the testator while he was still alive are important for the correct determination of the amount of the reserved portion.
- Is a reserved share due after disinheritance?
A person who has been disinherited loses the right to a reserved portion of the estate.
- How does a retention claim proceed?
A claim for a reserved share must be initiated by filing a claim for payment of the reserved share with the competent court – the claimant is the person who is entitled to the reserved share. The court after hearing and examining the merits of the claim decides whether it will accept the claimant’s demands.
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