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Complexities of Inheritance and Probate Estate Administration in Israel

Inheritance and Probate Estate Administration in Israel is highly complex. The property of a deceased individual is called their Estate. The Succession Law governs a person’s estate in Israel after their passing. A person’s estate includes their property at the time of death and any rights, actions, and obligations. The estate and the heirs to the estate may not absolve themselves of any actions the deceased performs before their death. For instance, if a woman sold her car to another person before her death, the estate is entitled to the agreed-upon compensation but may not withdraw from the sale.

Will Execution and Estate Distribution under Israeli Law

The estate of a deceased individual in Israel is meted out according to a person’s will (if an Israeli will exist), after a probate order has been issued, or according to the specific stipulations of Israeli Succession Law if there is no will or if the will is being disputed. In Israel’s Inheritance and Probate Estate Administration cases, the estate is distributed to the heirs. In Israel, an estate manager is required in some Inheritance and Probate Estate Administration cases. This procedure is standard where debts are attached to the estate or objections to the probate or inheritance order have been submitted.

The Importance of Legal Assistance in Estate Administration

Issues regarding inheritance and estate distribution are complex, critical, and delicate. Distribution of an estate in Israel after a probate order, especially when it is substantial or disputed or accompanied by debts, will profoundly impact heirs financially and emotionally. That is why contacting an Israeli law firm specializing in Inheritance and Probate Estate Administration in Israel matters and estate management is recommended. A skilled lawyer will help minimize the complex processes related to the management and distribution of the estate in a fair, neutral, and responsible way. I want to point out that seeking professional legal advice is essential when an estate manager is required.

Role and Responsibilities of an Estate Manager

The estate manager will assemble all of the deceased’s assets (the estate), pay off any outstanding debts attached to the estate, and dispense the remainder of the estate among the heirs. According to section 97 of Israeli Succession Law, the estate manager is entitled to do “all that is needed to fulfill his duty” [all translations in this article are unofficial], apart from specific actions requiring special court permission. The expenses incurred during this process are placed on the estate, including the manager’s salary.
It is important to note that these debts and expenses precede the heirs’ right to the estate in Israel. Thus, if the estate has been distributed before all known debts have been paid, all heirs will be responsible for those debts. Before the probate order and distribution of the estate in Israel, heirs are not responsible for debts beyond the estate’s property according to the Israeli inheritance law.

How Will an Estate Manager Help With a Probate Estate Administration?

An estate manager will take the following actions, among others, upon assuming their role:

  • Open a separate bank account for managing the estate.
  • Chronicle and track all income and expenses of the estate.
  • Pay all outstanding debts and expenses of the estate.
  • Distribute the remainder of the estate among the heirs after debts and expenses have been paid
  • Take legal action against an heir or any person who has caused harm to the estate.
  • File a deposition to a court detailing the distribution of the estate (including the value of the property given to each heir at the time of distribution) within thirty days after the distribution of the estate.

Tax Implications of Israeli Estate Distribution

Another essential aspect to be considered is the tax implications of estate distribution in Israel. Most Western countries impose some inheritance tax. These countries also usually impose some form of tax on gifts to prevent the possibility of tax evasion by gifting property. In Israel, an inheritance tax was imposed in 1949, one of the first laws passed, signifying its perceived importance. However, the law was annulled in 1981 and has yet to be renewed. There have been attempts to reinstate some inheritance tax in recent years, but they have yet to pass.
As stated, there is no inheritance tax or estate tax in Israel at the current time. However, many Israeli citizens hold dual citizenship, which exposes them to other countries’ tax laws. For instance, there are over 300,000 Israeli citizens residing in the US who may also be American citizens and are, therefore, subject to US tax laws.

Furthermore, the estate tax in the United States may be applied even to Israelis who aren’t citizens or residents of the

United States if they own property in the United States that exceeds the value of 60,000 U.S. dollars (this amount may change with time). Such property may include real estate in the United States, trust funds, and even shares of American companies. These regulations change frequently; thus, it is paramount to consult an experienced Israeli probate attorney to guide you through the process before determining the best strategy of which steps to choose to safeguard one’s property.

Contact and Consultation for Inheritance and Probate Matters

We are in Tel Aviv, with offices in New York and Los Angeles, California. We invite you to schedule a complimentary consultation with our firm to learn how we can solve your inheritance and probate estate administration matters in Israel.

We represent international clients from the United States, Canada, the UK, Europe, and Israel. Please get in touch with us from the US or Canada at 1.888.923.0022 or in Israel at (972) 3.9055478 or (972) 50.7322688 to schedule a discussion regarding your Inheritance and Probate Estate Administration in Israel case.

Rahav D. Aharoni, Adv

My expertise lies in assisting heirs and clients in the identification and acquisition of inherited assets in Israel, resolving estate and real estate conflicts, and facilitating transactions involving Israeli real estate, investments, and businesses. I am dedicated to helping my clients build equity and achieve their goals.