Questions concerning how an estate is to be distributed, which arise as a consequence of a person’s death or when planning a succession, prompt the need for legal assistance.
Dalan is one of the few major teams of legal specialists working within the law of succession. The support we provide is marked by its effectiveness and the fact we put the interests of the client centre stage. We achieve this by virtue of our specialist expertise and by employing digital solutions such as web template systems and optimised experiential databases.
Our clients include high-wealth individuals and other private persons whose financial status is more average. We also advise beneficiaries such as charitable organisations, and have been appointed trustee by Oslo City Registrar.
When a person dies, the future of his assets and liabilities has to be decided. This basically implies distribution of the estate, and somebody or some persons must be designated recipients. In inheritance law a recipient is termed an heir, while the person leaving an estate is called the intestate or, if he has left a will, the testator.
A person may be an heir on two grounds:
- Heir pursuant to the Inheritance Act – a legal heir
- Heir named in a will – a testamentary heir.
A person leaving an estate can to a certain extent determine its distribution by writing a will. If two persons acting together establish a will, the term joint will is used. If the will makes both of them beneficiaries it is termed a mutual will. If the will is binding, it becomes what is called a testamentary contract.
The law of succession places certain requirements on a person wishing to establish a will:
- One must satisfy certain formal requirements when formulating the document in order for it to be considered a valid will.
- There are requirements to the condition of the testator; he or she must have testamentary capacity.
- There are also requirements as to the circumstances under which a will is drawn up: for example, the testator must not be exposed to any undue influence.
- Furthermore, testation itself must also satisfy certain requirements: it must not contravene the absolute rules governing distribution of the estate, whether these are laid down in the Inheritance Act or are set out in a previous will that has been made binding by means of a testamentary contract.
For legal heirs, the Inheritance Act establishes different categories of beneficiaries:
- The first category of beneficiary consists of the legal heirs: children, grandchildren etc. If the intestate does not have any heirs in the first category, the estate is distributed among the heirs in the second category.
- The second category of heirs consists of the parents and their descendants, including siblings, nephews and nieces, etc.
- If there are no legal heirs in the second category either, the estate is distributed among legal heirs in the third category. These will be the descendants of the grandparents of the intestate, restricted downwards to cousins.
Certain heirs are entitled to an inheritance, regardless of what is declared in the will. These are heirs in the first category (children, grandchildren etc.) who are considered heirs who can claim a so-called statutory portion of the estate. Moreover, the spouse of the deceased, or common-law partner, as well as their joint children, are able to claim a statutory minimum portion of the inheritance sum.
The combination of statutory portion entitlement, and a spouse’s or partner’s right to claim an inheritance, places considerable restrictions on a testator’s testamentary freedom, if that person has a normal, average-size estate. The consequence, if a will encroaches upon these rights, is that the section of the will relating to the statutory or minimum portion of the inheritance sum will be deemed to be invalid and ineffective. An extreme consequence might be that the entire will is considered to be invalid.
While the law of succession governs distribution of the estate after the death of the legator, the distribution of assets prior to the devolution of property on death is not governed by the law of succession. The legator is therefore basically free to donate gifts, insofar as the disposition is considered to be a disposition inter vivos and not a disposition mortis causa, i.e., a disposition made when the donor is alive rather than a disposition made in anticipation of death.
The consequence of the boundary line between the above dispositions is that certain transfers are viable as dispositions inter vivos, but not as dispositions mortis causa. As a result of this, a substantial part of inheritance planning – especially where high wealth and more complex structures are involved – will concentrate on what should be implemented while the donor is alive, in the form of dispositions inter vivos, and on what can wait until after the devolution of property on death. Other factors, such as the transfer of a business enterprise in a controlled manner to secure continued operation, as well as tax planning, should also be carefully studied.
A death actuates the need to decide how an inheritance shall be managed, as the estate shall be administered and distributed.
While the administration and distribution of an estate has to be undertaken in the case of many heirs, spouses and common-law partners with joint children are entitled to retain undivided possession of the estate. This means that the surviving spouse or partner, within the categories defined by the Inheritance Act, is granted the right to retain the assets of the deceased spouse or partner, so that final distribution of the estate will not take place until the period of undivided possession comes to an end.
When the time comes for the estate to be administered and distributed, the heirs must decide whether this shall be conducted privately or whether they should seek public administration. In the case of private administration, the heirs themselves take care of the distribution of the inheritance. Whoever applies for private administration also declares himself/herself willing to assume liability for the deceased’s obligations. The consequence of this will be a personal liability for the debts of the deceased, should the assets bequeathed not be sufficient to pay off the debt. In the case of public administration of the estate, probate matters are dealt with by a district court whereby an executor, usually a lawyer, is appointed.
The law of succession is becoming increasingly trans-national. Nowadays, the assets of a deceased person are frequently likely to be located in different countries and the persons who are involved in the inheritance process may have links to different countries. This development gives rise, much more often than before, to the question of which country shall administer the estate’s distribution, and to other issues arising in consequence. Furthermore, there is also the question of which jurisdiction is empowered to adjudicate the probate matters. Given the above, it is evident that international private law and Norway’s law of succession now intersect.
More about generational succession here