How to inherit Israeli estate in a smart way?
Most people prefer not to dwell on this subject, but the fact is that life is transient. Upon the death of an individual, the fate of their property must be decided. Inheritance is the universal practice of passing on property, as well as rights, obligations, debts and even titles. But succession law in Israel is highly complex and requires the guidance of an expert in inheritance tax law in Israel. Although the practice itself appears in some form in all cultures, the rules of inheritance are subject to the jurisdiction where the decedent (deceased) died or owned property at the time of his or her death. Inheritance in Israel is governed by the Succession Law of 1965 (‘Succession Law’).
The Israeli probate courts, aka registrar and family court, have jurisdiction over the estate of any person who at the time of his or her death was a resident of Israel, or who left property, assets, chattels, real estate in Israel. The default presumption of the law is stated in section number 1 of the Succession Law, which is that a man’s estate passes on to his heirs upon his death. This includes his fiscal assets, property, real estate, copy rights etc.
The Israeli Succession law stipulates two ways to bequeath assets: by will or by law. If the deceased has left a will, the Israeli inheritance will be meted out accordingly to the heir/s stipulated in the will.
If the deceased hasn’t left a will means intestate, the law becomes a little bit hard to understand and it requires a detailed explanation by an attorney, in order to fully understand and distinguish the difference in the percentage %! There is few scenarios that each of them by law gives different % to the heirs according to their relationship with the deceased as stipulated according to the order of inheritance. These are:
- The deceased’s spouse at the time of death will get 50% of any real estate in the Israeli Estate and 100% of non real estate (the only relation mentioned here who isn’t related to the deceased by blood; this may include a common law spouse),
- The deceased’s offspring, including illegitimate and adopted children and their offspring will get 50% of any real estate of the Israeli Estate and 0% of non real estate like bank account, chattels, car and etc .
- The deceased’s parents, grandparents, and their offspring.
- In the absence of the aforementioned heirs, the State of Israel inherits the estate and has an obligation by law to keep the funds for certain years.
The inheritance will be divided 1/2 to the deceased’s spouse (one part) and 1/2 to the deceased’s children in case of real estate (the other part, to be divided equally among them). These heirs take precedence over the parents of the deceased and their offspring, which in turn take precedence over the grandparents of the deceased.
The spouse will inherit the entire estate only if the deceased has no children, siblings or parents. Otherwise, the spouse is entitled to half the estate if the deceased is survived by children or parents, and to two thirds of the estate if the deceased is survived by grandparents, siblings or other relatives.
As mentioned the spouse is also entitled to inherit 100% of the deceased’s movable property, including motor vehicles, which were part of the shared household. According to the Israeli Succession Law the assets belonging to the surviving spouse are not part of the estate which is to be inherited. These may include up to half of the value of the couple’s assets, due to the operation of the Spouses (Property Relations) Law 5733 – 1973, the principles of joint ownership of property, or a property relations agreement (for example, a prenuptial agreement or ‘prenup’).
The right to maintenance out of an estate is also accorded to the deceased’s children until the age of 18 (the court may grant maintenance until a later age in some circumstances), or parents who are in need of financial support and were dependent on the deceased prior to his or her death. According to section 6 of the Israeli Succession Law, an heir may refuse to inherit his or her part of the estate, provided the estate has yet to be distributed.
In the case of inheritance in the absence of a will, the distribution of the Israeli estate to the heirs according to the law will begin with a request for a succession order. This request may be handed to either a branch of the Succession Registrar’s Bureau or one of the rabbinical courts in Israel. The succession court order is a valid judicial order. It does not suffer obsolescence and can be enforced years following its issuance.
The probate court order does not specify the details of the distribution of assets among the heirs, but only decides upon the identity of the heirs and their respective % inheritance rights.
The petition must be accompanied by many documents including foreign law opinion regrading the Domicile of the deceased.
- Drafting a probate petition from A to Z including translation.
- A Succession Order petition alongside an affidavit signed by the submitter, who must be an heir, the estate manager or a creditor of an heir. The submitter’s declaration must be verified by an attorney, notary, judge or head of the local council or the Israeli consulate.
- An original death certificate or if the deceased passed away outside of Israeli an Apostille is required.
- Notices to all remaining heirs notifying them of the Succession Order Petition, including the aforementioned heirs’ signatures or confirmation of delivery of the notices by registered mail.
It is advised to contact our firm regarding the exact procedural requirements of the process of requesting an Israeli Succession Order and other subjects including any inheritance tax that may be applied. Where the petition for the order is made by an attorney on behalf of an interested party, it must be accompanied by an original General Power of Attorney or a copy faithful to the original.
The Israeli Succession Registrar or a courthouse may nullify or amend a Succession Order (or a Probate Order, which is discussed in a separate article). If the order was granted by a court of law only a court of law may annul or amend it. Any interested party may request to annul a Succession Order; this right is not limited to the heirs of the estate.
One of the most common examples of annulment of a Succession Order is when after the order is given it is found that the deceased had in fact left a will in Israel. In such a case the Succession Order may be annulled and a probate order must be requested in respect of the will.
It is important to note that there is no Estate Tax in Israel, however, speaking to an Israeli inheritance tax lawyer will benefit you in the long run. We are located in Tel Aviv with offices in New York, Los Angeles, California and Florida. We invite you to schedule a complimentary consultation with our firm to learn how we can solve your Israeli legal and business matters.
We submit and manage probate petitions on a weekly basis and we represent international clients from the United States, Canada, the UK, Europe and Israel. Please contact 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 case.